Legal Guide to an Apartment Purchase Agreement for the Buyer

If the seller says that the notarial transaction is just a formality, it is worth pausing. The legal guide to a flat purchase agreement starts from one simple principle: the notary confirms the form of the transaction and explains its consequences, but the buyer must know, before signing, what they are actually buying and what risks they are taking on. Purchasing a flat is often one of the largest financial decisions a person will make. For that reason, a good location, an appealing renovation and a bank's loan approval are not enough on their own.

What does a flat purchase agreement actually determine?

A purchase agreement is not merely a document by which money moves to the seller and the flat to the buyer. It sets out what apartment ownership is being transferred, what the price is, how and when payment is made, when possession is handed over, and what liability remains with the seller after the transaction.

Purchasing a flat involves, in addition to the flat itself, an ideal share of the building and the plot of land, as well as rights and obligations within the apartment association. The buyer does not acquire only the living space behind the walls. They also step into the relationships that have developed in the building: into the midst of shared costs, renovation plans, rules of use, parking spaces and sometimes unresolved disputes.

A good agreement makes the important terms visible. A poor or overly general agreement leaves room for later disputes about what each party actually promised. Problems arise particularly often when something promised verbally — such as a specific parking space, furnishings remaining with the flat, or the absence of moisture damage — is not reflected in the agreement or its annexes.

Matters to verify before entering into the agreement

A legally safe purchase begins before the notary appointment. The first step is to check the land register. This reveals whether the seller is the owner of the flat and whether the property is encumbered by mortgages, personal rights of use, prohibition entries, attachments or other encumbrances. A mortgage does not always mean the purchase must be abandoned, but the agreement must clearly state how and by what point it will be discharged.

If the flat forms part of the spouses' joint marital property, the consent of both spouses may be required for the transaction. Questions of inheritance, co-ownership or authority to act must also be verified before the transaction. In the case of a seller acting under a power of attorney, for example, it must be clear that the power of attorney is valid and confers the right to enter into that specific transaction.

In relation to a flat, it is also important to request documents and information from the apartment association. It is prudent to review the minutes of recent general meetings, the management plan and any resolutions concerning major renovation works. Work relating to the roof, façade, heating system or lift may represent a significant additional cost for the buyer in the coming years, even if the condition of the flat itself is good.

The debts and loan obligations of the apartment association require attention. The effect of debts and prior obligations on the new owner depends on the circumstances and the legal basis. For this reason, it is not sufficient to rely on the seller's assurance that "all bills have been paid." Ask the apartment association for written confirmation of any arrears, payment schedules and loans taken out in respect of the building.

Also verify the actual situation on the ground. Does the use of the storage unit in the basement, the parking space or the balcony correspond to the documents? Has the layout of the flat been altered, and are the necessary approvals in place? Unauthorised alterations may subsequently give rise to costs, claims or difficulties with bank financing and resale.

These are the points in the purchase agreement that require clarity

The description of the flat must be precise. The agreement must state the register part number of the apartment ownership, the address, the floor area and, where applicable, the arrangement regarding a storage unit, parking space or other ancillary use. If the parking space is not a separate apartment ownership but an area designated by the rules of use, this distinction must be understood. In everyday speech it may be referred to as "my space," but its legal substance may be different.

The price and payment schedule require equal attention. If the purchase is financed by a bank loan, consideration must be given to what happens if the bank does not advance the loan in the expected amount or requires additional security. In some cases it is justified to include a contractual condition making the purchase contingent on obtaining financing. Such a condition must be worded specifically, not as a vague hope.

The security of the money transfer is also important. A notary's escrow account or a bank payment scheme helps to link the payment to the transfer of ownership and to the completion of agreed steps. If the property is encumbered by a mortgage securing the seller's loan, it must be agreed what portion of the purchase price is to be paid to the bank and when the consent required for discharge of the mortgage will be provided.

The date of handover of possession should not be left as a purely formal statement. The agreement should specify when the keys, remote controls, post box and basement keys, meter readings and documents relating to the flat are to be handed over. If the seller remains in the flat for a period after ownership has passed, there must be a clear agreement on the use fee, payment of utility costs and the consequences of any delay.

It should also be recorded in writing what is to remain in the flat. Kitchen furniture and integrated appliances frequently stay, but with regard to freestanding furniture, light fittings, curtains or an air-source heat pump, the parties' understanding may not coincide. Photographs in a listing advertisement are not a substitute for a contractual agreement.

Defects and the seller's liability

An inspection of the flat is not a courtesy call but the buyer's opportunity to assess the condition of the property. Damp stains, cracked flooring, problems with the electrical system or poor ventilation may be visible. Some defects, however, only become apparent after moving in — for example, during the heating season or in heavy rain.

The seller's liability depends on what they knew, what they disclosed to the buyer and what the buyer could have observed during a normal inspection. The seller cannot always exempt themselves from liability by means of a broadly worded clause stating that "the buyer has familiarised themselves with the condition of the flat," particularly where the defect was knowingly concealed or the seller provided incorrect information.

On the other hand, every sign of age or wear in an older building does not automatically constitute a defect for which compensation may be claimed. Assessment takes into account the age of the flat, the price, the agreements reached and the buyer's reasonable expectations. If a problem arises after the purchase, it is worth documenting the defect, notifying the seller in writing without delay and seeking advice before undertaking any major repair work. Repairs carried out hastily may make it more difficult to establish the facts at a later stage.

The notary is not solely the buyer's lawyer

The notary is an impartial official. They explain the rights and obligations of the parties to the transaction and verify the form of the transaction, but they do not act solely in the interests of either the buyer or the seller. If there is a particular risk for the buyer in the agreement — such as a deferred handover of possession, an ongoing renovation, a complex mortgage discharge or an arrangement relating to a defect — it is prudent to have the terms reviewed by the buyer's own adviser before attending the notary.

Legal assistance is particularly valuable when a transaction is not straightforward. For example, where a flat is being purchased from an estate, the seller is abroad, the purchase is made through a company, the flat is occupied by a tenant, or the parties are in dispute over the return of a prepayment. In such situations, a single ambiguous sentence can turn a later dispute into a lengthy and costly matter.

A reservation agreement and a prepayment are not a minor side arrangement

Before the notarial purchase agreement, a reservation agreement is often concluded or a prepayment made. The purpose may be reasonable: the seller takes the flat off the market, while the buyer arranges the bank loan and reviews the documents. Problems arise when the agreement does not specify what happens to the money if the bank refuses the loan, an encumbrance is discovered in the register or the seller withdraws from the sale.

A reservation fee, earnest money and a prepayment are not automatically the same thing in substance. The conditions for their return or retention depend on the specific agreement. Before transferring any money, the document must be read in full and the following question must be answered: in what circumstances and how quickly will the money be returned?

Legal review helps you make a confident decision

Purchasing a flat need not be approached as an exercise in distrust. Clear questions and written agreements actually protect both parties. The seller knows what they are transferring, and the buyer knows what they are paying for and what obligations await them.

If any provision of the agreement, any entry in the land register or any document of the apartment association raises a doubt, it is worth resolving that doubt before signing. Eurocity Law Office will listen to the situation, explain the options in plain terms and, where necessary, assist in reviewing or drafting the contractual terms. A transaction reviewed with care provides a far better starting point than a later dispute over what should have been noticed beforehand.