How to acquire Real Estate in Austria
In this artcile we explain the aspects of the purchase of property from a practical point of view in Austria.
A. Form of purchase contracts
Basically, purchase contracts – also concerning real estate – need not be stipulated in a specific form; in theory, an oral agreement about the object of the purchase and its price would be sufficient to stipulate the contract. However, in order to actually acquire property, the purchaser’s property right must be registered in the land register. This registration requires a written document signed by the parties. The parties’ signatures must be certified by a notary public.
B. Notary Public
If an attorney draws up the purchase contract and carries out the registration in the land register, the notary’s function is limited to the certification of the parties’ signatures. The notary only checks the identity of the parties to the contract, if necessary also the question of who may represent an undersigning company.
The attorney drawing the contract is responsible to verify whether the seller is actually the owner of the real estate. The same applies to the observance of laws in order to avoid personal liabilities.
C. Types of property
Basically, Austrian law permits two types of property: normal (complete) property and co-property (joint property). The co-property is defined as property of a virtual share of a real estate. Basically, the owner of a real estate is also the owner of buildings rising on it. Special forms of property are the “right to erect buildings” (Baurecht) and property of apartments (condominium, Wohnungseigentum). The owner of the “right to erect buildings” does not acquire property of the real estate, but only of the buildings that he constructs. Condominium is defined as co-property of real estate plus the exclusive right to use a certain apartment/office. Other rights of use, for example subservience, etc do not rank among the types of property.
D. Transfer of property
As mentioned above, the contract is concluded by offer and acceptance; the mere agreement about the object of the purchase and its price being basically sufficient. However, the purchase contract only the effects an obligatory claim to transfer property. The actual right of property – as right in rem effective against any third party – can only be acquired by means of registration in the land register.
Land registers are set up at every local court ( called Bezirksgericht) in Austria. The courts administrate the land register (called Grundbuch), an electronic register allowing for read data on property and mortgage of every real estate in Austria. Normally, Austrian lawyers are equipped with an electronic connection providing constant access to the land register. The prerequisites for registration in the land register (registration of property, mortgage, subservience, division of real estate, etc) are quite complex and formalistic. More detailed explanation would go beyond the scope of this hand- out. The strictness of the land register is due to the high value of real estates.
Servitude and other burdens must also be registered in the land register in order to be effective against third parties.
G. Cost of purchase contracts
The costs of the contract may be agreed upon freely and are normally paid by the purchaser. As a rule, the costs of a purchase contract range from 1% to 3% of the purchase price.
Tags: Real Estate Austria