Real Estate and Construction Industry

We advise on real estate transactions, project developments, and construction projects — in the acquisition and sale of properties as well as in the design and enforcement of construction and rental contracts.

The Acquisition

Every purchase agreement for real estate in Germany requires notarization, and it must be complete: Side agreements that are not notarized can render the entire contract invalid. Those who rely on an additional verbal promise may find themselves without a contract in the worst case.

Before the acquisition, there is an examination. This includes more than just the land register: Building obligations are listed in a separate register, contaminated sites in the authority's cadastre, and heritage protection obligations in their own lists. Additionally, there are development issues, existing rental and lease agreements, and the question of whether a municipality can exercise a right of first refusal — which can delay the execution by weeks.

The Construction Project

Construction contracts are either concluded according to the statutory rules of contract law or by incorporating the VOB/B (General Terms and Conditions for the Construction Industry). The differences are significant: regarding termination rights, the handling of additional claims, and the deadlines for defect claims. If the VOB/B is included against a consumer or unilaterally modified, its protection is often lost — then the law applies.

For builders, the right of instruction is central: The client can demand changes but must compensate for the additional costs according to specified standards. We set up additional claim procedures so that the instruction, additional offer, and commissioning are documented in a traceable manner — this will later determine enforceability.

Acceptance and Defects

Acceptance is the turning point of every construction project. With it, the payment becomes due, the risk transfers, the limitation period for defect claims begins, and the burden of proof shifts: Before acceptance, the contractor must prove the absence of defects; after acceptance, the client must prove the defect.

Due to these effects, diligence is worthwhile: formal acceptance with a protocol, reservation for recognized defects, reservation for a forfeited contractual penalty. Those who use the service without making any declarations risk a tacit acceptance — with all consequences, without reservations.

Commercial Rent

Unlike residential leases, commercial rent is largely flexible. This is where the risk lies: Operating cost allocations, cosmetic repairs, maintenance obligations, and competition protection can be extensively transferred — up to the limit of clause control, beyond which the regulation becomes void and the law applies.

Two points are often underestimated. First, the written form: A lease agreement for more than one year that does not comply with the form is considered to be concluded for an indefinite period and can be terminated regularly — even amendments must comply with the form. Second, the index clause: It must be defined in such a way that the adjustment can be recalculated.

Typical Scenarios

The Investor from Turkey. When acquiring German commercial real estate, questions arise regarding the acquisition structure, property transfer tax, and financing through a foreign company. The structure determines the tax burden and is difficult to change afterwards.

The Project Development. Securing land, building rights, general contractor agreements, and leasing overlap in time. A right of purchase that expires before the building rights are established jeopardizes the entire project.

The Construction Process. Disputes over defects or additional claims are resolved through expert opinions. Those who secure the condition in a timely manner are in a significantly better position than those who only start with a lawsuit.

Securities in Construction

Contractors have instruments to secure their remuneration. They can demand security for the unpaid work remuneration and suspend work if it is not provided. Additionally, there is the construction craftsman's lien, which is registered on the property — however, it only helps if the client is also the owner, which is often not the case in project developments.

On the other side, builders secure themselves through performance and warranty bonds. Their amount and duration are subject to clause control: An excessive security is invalid, leaving the builder completely unprotected. We assess it in such a way that it holds.

Related Consulting Areas

Real estate issues touch on the tax structuring of the acquisition, public procurement law for public clients, and process representation in disputes. For projects with public involvement, we collaborate with infrastructure consulting.