The purchase of a rented property

When buying a rented property, the following must also be taken into account:

1. "Buying does not mean renting"

If a rented property is sold, the buyer enters into all tenancy agreements. It must be stipulated from when the rents and deposits are to be paid to the buyer and the seller is obliged to inform the buyer whether there are any rental disputes of an extrajudicial or judicial nature (rent reductions, rent arrears, rights of retention, terminations). By law, the buyer only enters into the tenancy from the time of acquisition of ownership. However, it can be sensibly agreed that the claims in relation to the benefits and encumbrances in the internal relationship are brought forward to the time of full payment of the purchase price. If this date falls in the middle of the month, the rents and ancillary costs are to be calculated pro rata temporis.

In addition, it can be agreed that the buyer is authorized to make declarations to the tenants (e.g. notices of termination, rent increases) in place of the seller from payment of the purchase price until the transfer of ownership. However, if the buyer wishes to give notice of termination due to personal use, he can only do so after the transfer of ownership.

2. obligations of the seller towards the buyer

The seller does not have a basic obligation to disclose the tenancy agreements to the buyer, but certain information should be included in the notarized contract. The buyer should inspect all tenancy agreements before notarization of the notarial purchase agreement. As part of the purchase agreement, the seller may be obliged to hand over the originals of the tenancy agreements to the buyer. The seller is obliged to inform the buyer if the rent cannot be achieved in the long term.

3. deposits

In accordance with the statutory provisions, the buyer is obliged to repay the tenant the rental deposit including interest when the claim falls due. He is also obliged to do so, even if he has not received the rental deposit from the seller. The seller should therefore be obliged in the purchase agreement to transfer the deposit to the buyer. If the tenant does not receive the deposit back from the buyer, he can turn to the seller, who is therefore liable for it. This can only be avoided if the seller obtains an indemnity from the tenants in respect of the deposits.

4. statutory right of first refusal for a rented apartment and restriction on termination for personal use

a) Right of first refusal

When purchasing a rented apartment (or a terraced house or a semi-detached house after the property has been divided) that is subject to the Condominium Act, the tenant may have a right of first refusal. Whether a statutory pre-emptive right exists is not usually clear from the land register. The tenant has a pre-emptive right if the division into condominiums took place after the tenant moved in. However, this does not apply if the landlord sells the residential premises to family members or a member of his household. If the tenant moves into an existing divided condominium, on the other hand, he has no right of first refusal. The notary is obliged to inform the parties of the existence of the statutory tenant's right of first refusal.

b) Restriction on termination for personal use

If the object of purchase is a rented apartment for which condominium ownership was only established after it was transferred to the tenant, the buyer must note that he can only terminate the contract for personal use after three years have elapsed since the sale.

5. sales tax option

As a rule, no VAT is payable on the sale of real estate. However, it is possible to opt for VAT. The purpose of this is that the seller receives the input tax deduction for the costs claimed by him (building materials, construction services). In order for the VAT option to be agreed, both the seller and the buyer must be entrepreneurs in terms of VAT law. This is the case for the seller, for example, if he uses the property for his company and for the buyer, for example, if he acquires the property for his company or rents it out to an entrepreneur. With regard to the VAT option, the advice of the parties' respective tax advisors should be sought in advance in order to clarify whether and which conditions for the VAT option apply.