Purchase of municipal land yet to be merged (4 questions)

We have the opportunity to purchase a plot of land from the municipality in a planned new development area. A draft purchase agreement has already been sent to us (only 5 pages!).

The problem is that the parcels of the planned new development area have not yet been merged and therefore the plots have not yet been parceled. A subdivision proposal (approved by the council) was published and interested parties could apply for the individual plots. The final surveying of the plots is also still pending (statement from the building authority). However, foundation stones have already been laid (?!), and the development plan is available.

Question1:

Now, the draft agreement only refers to the plot in the subdivision proposal. All land register information does not exist. Since there presumably is no new parcel number or land register for the new plots yet... or am I mistaken?

Question2:

Furthermore, the warranty for defects is completely excluded. Do all municipalities do this?

Question3:

And there is a mutual waiver of an “acquisition priority notice” with regard to the public-law corporation of the seller (municipality). Possibly because the new plot (parcel) does not yet have a land register where it could be registered?

Question4:

Is the sentence excluding contamination sufficient?

“The seller owes transfer of ownership free of any encumbrances in the land register of the purchase plot still to be surveyed”

Everything is somehow different from what I once learned... :confused:

Hello Heidegeist,

A draft purchase agreement has already been sent to us (only 5 pages!).

Do you want 10? Three are enough.

The problem is that the parcels of the planned new development area have not yet been merged and the plots have therefore not yet been subdivided.

That is not your problem. The municipality has (presumably) acquired all the plots at this stage, i.e., the boundaries are no longer ownership boundaries but only parcel boundaries – the merger is then a formality and will probably be carried out before the final subdivision. In this case, however, it is nothing the buyer needs to worry about.

A subdivision proposal (approved by the council) has been published and interested parties could apply for the individual plots. The final survey of the plots is also still outstanding (statement from the building authority). Cornerstones have already been set, though (?!), and the development plan is available.

I am a surveyor, but I have no idea what one or more cornerstones are supposed to be!? It could be that the outline of the building area has already been newly surveyed and marked by new boundary markers (stones, pipes, etc.). That would be okay, as this still allows adjustments to the parcels.

Question 1:

Land register information does not exist. Since there is presumably no new parcel number and/or land register for the new plots yet… or am I mistaken?

Correct. Nevertheless, it is clearly defined by the subdivision plan and a description of the object of purchase by size, location, and numbering what you are bidding on.

Furthermore, defect liability is completely excluded. Do all municipalities do that?

Not my business. Ask ;)

Question 3:

And a mutual waiver of a "preliminary acquisition notice" is made with regard to the public-law corporation of the seller (municipality). Possibly because the new plot (parcel) does not yet have a land register where it could be registered?

Yes and no. One could also register the preliminary acquisition notice on the existing parcels affected from your point of view or, after merger, on the entire property – but the reason for doing so is different. If you buy from a private person and have no pre-notation of conveyance, the seller could theoretically still make a better deal with another interested party before the transfer date or before you pay the purchase price. Then you might pay the notary without actually acquiring the property.

If a municipality allowed that, the heads of the building authority and the mayor should already get themselves a warm jacket. ;)

Question 4:

Is the sentence excluding contamination sufficient?

“The seller owes a burden-free transfer of ownership in the land register of the plot to be surveyed”

In my opinion (from memory): no.

"Burden-free" refers to cable and right-of-way easements, building encumbrances, mortgages/land charges, etc.

Contamination, i.e., substances that may be lying dormant in the soil and may have to be disposed of, is not covered by this clause as far as I know.

However, it can be well assessed if you know what kind of use the area has had so far. If it has been farmland until now, it is relatively unlikely that significant contamination lies there, if at all. If it was an old industrial site, however, you have to take a closer look, although such areas should also be defined and registered by the municipality.

Best regards,
Dirk Grafe

Question2:

Furthermore, the liability for material defects is completely excluded. Do all municipalities do it this way?

(...)

Question4:

Is the sentence excluding contaminated sites sufficient?

“The seller owes the conveyance of ownership free of encumbrances in the land register of the still-to-be-surveyed plot of land”

Everything somehow different from how I once learned it...:confused:

Regarding 2:
Basically, yes.
So only defects in title remain.

Regarding 4:
Free of encumbrances does not include contaminated sites.
These fall under the exclusion mentioned in question 2.

Thank you for the answers. You have already helped me with that:)


I have looked at some purchase agreements on the internet and from acquaintances. I have not found the sentence, for example, "Free of legal defects..." or similar there.


Definition of legal defect
Among the typical seller obligations under the contract is also to transfer ownership of the purchased item to the buyer (§ 433 para. 1 sentence 1 of the Civil Code). The item must therefore be free of legal defects (§ 433 para. 1 sentence 2 of the Civil Code).

A legal defect exists whenever a third party, based on a private or public right, can impair the ownership, possession, or use of the purchased item[5], and the buyer can therefore not "use the item at will and exclude others from any interference" (§ 903 of the Civil Code).

A legal defect is equivalent when a right is registered in the land register that does not actually exist (§ 435 sentence 2 of the Civil Code). Because in favor of the registered third party it is presumed that the right actually belongs to them (§ 891 para. 1 of the Civil Code), which, for example, affects the saleability and the mortgagability of an apparently already encumbered property.

How could such a clause or sentence in the contract read?

You will not find the sentence either. There are material defects and legal defects.

When excluding liability for material defects, the seller therefore still liable for legal defects. Even without mention. They just hardly occur.