Which clauses should be included by the buyer in the purchase contract for land?

  • Erstellt am 2023-10-09 21:49:47

Schnubbihh

2023-10-09 21:49:47
  • #1
Hello dear community,

we are about to purchase a plot of land from a private seller and are wondering which clauses we should include in the purchase contract as buyers to best protect ourselves.

Background:
- Hinterland development in Hamburg
- We are buying plot 2, the seller is holding back on plot 1 (front)
- Plots are legally divided
- Investigation by the ordnance clearance service has already been commissioned and the result will be available BEFORE purchase
- Soil survey will be conducted BEFORE purchase
- Seller intends to register a building encumbrance and easement on the front plot (1) (right of way and utility rights)

Accordingly, the contract will include:
- Necessity of the building encumbrance / easement
- Demolition of the garage on the front plot. Or is this already covered by the building encumbrance/easement? Does a date need to be set for this?

Possibly for discussion:
- Quality/selection of the access road and entrance gate (street) + who bears which parts of the costs and expenses for the access road on plot 1? Recommendations?
- Positive decision on a preliminary building request (to secure general buildability in accordance with the development plan)?
- Right of first refusal for the front plot (in case it is ever sold)
- Is it possible to make deals where we bear the costs for demolishing the garage (and possibly the house) on plot 1 and in return the purchase price is reduced accordingly (saves real estate transfer tax)? Or would something like this already constitute tax fraud?

Are such clauses at all possible and sensible? Do you have any other recommendations for the purchase contract?

Best regards!
 

KarstenausNRW

2023-10-09 22:35:37
  • #2
All regulations that you agree on together with the seller are possible. The notary should advise you accordingly for his statutory fee – which he probably hasn’t done so far, judging by your post. Depending on the demand and quality of the property, it may well be that you can only agree on a "bought as seen" condition. At least that would have been the case 1.5 years ago.

1. Cost bearing: It is customary that the person who holds the right of way also takes care of the maintenance of the path (see Building Code)
2. Positive preliminary building permit: Used in the commercial sector. As a seller, I would only participate if a betterment certificate is agreed upon in the purchase contract. So, if you actually want to build 120 sqm but then get approval for 160 sqm. As a seller, I would like to participate in the better utilization of the property and want an additional payment on the purchase price. Furthermore, the condition may delay the payment of the purchase price quite a bit and create uncertainty for the seller.
3. Right of first refusal: I would not do this as a seller because it reduces the value of my remaining property from a bank’s perspective. If the property is already financed by the seller, the bank’s approval is required or it is recorded in subordination = possibly worthless for you, as it would be canceled in case of a foreclosure.
4. A deal can be made. Lower purchase price = lower real estate transfer tax. But there is a catch, as the property then also has a lower value for the bank. I have already seen entire financings/purchases fail because of such constructions (house price was reduced by kitchen, built-in wardrobes, accessories, etc. to such an extent that the bank simply no longer participated in the financing).

As I said, talk to the notary. And if he advises you on this for hours, the purchase contract won’t cost any more. But at least you will have good regulations that are also legally sound.
 

K a t j a

2023-10-10 07:03:40
  • #3
Everything that could cause you not to be able to build as planned must be included in the contract. A more detailed preliminary building inquiry would definitely be included with me. The remaining points can be attempted, but I would not make them a condition.
 

Grundaus

2023-10-10 15:12:54
  • #4
From experience, I would arrange the access as precisely as possible, width, flooring, maintenance, gate, lighting, doorbell, mailbox, etc. Demolition also with a date. I see no disadvantages with the pre-emption right, neither for you (except costs) nor for the seller. It has no influence on the seller's mortgage, and if there should still be a forced auction, you can also step in at the final price.
 

KarstenausNRW

2023-10-10 15:35:54
  • #5
Only if it is subordinate. But then it is almost worthless for the entitled party.
 

Proeter

2023-10-10 17:08:25
  • #6
Your previous thread about hinterland development has unfortunately dried up, although many questions remain unanswered. How did you solve them? A particular problem is and remains (even after your slightly optimistic information from the office) that the front property will only be very limited in terms of building potential after the division.
Also: I looked at it in aerial images and the cadastre: there is no precedent for your project in the settlement. That is initially a big risk per se. In fact, there are some very wild examples of development in the settlement, which I have never seen elsewhere either (e.g., significant boundary development with residential buildings toward the back, several lots with two houses, etc.), but that does not mean you can do whatever you want.
By the way, you have also let some earlier threads dry up. What, for example, happened to the properties you wanted to buy from your family?
I always find it fair and in the interest of the forum to also share how the respective "projects" turned out and why.
 

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