Real Estate Reservation Agreement for Germany

Real Estate Reservation Agreement Template for Germany

A Real Estate Reservation Agreement under German law is a preliminary contract document that establishes the terms under which a property is temporarily reserved for a potential buyer. This document, while not equivalent to a final purchase agreement, creates a framework for the future transaction and typically includes provisions for a reservation fee, exclusivity period, and basic terms of the intended purchase. Subject to German civil law (Bürgerliches Gesetzbuch), it provides important preliminary protections for both parties while allowing time for due diligence, financing arrangements, and preparation of the final notarized purchase agreement.

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What is a Real Estate Reservation Agreement?

The Real Estate Reservation Agreement is commonly used in German property transactions as a preliminary step before entering into a binding purchase agreement (Kaufvertrag). It serves to formalize the serious interest of a potential buyer while providing the seller with a commitment through a reservation fee. This document is particularly valuable in situations where parties need time to arrange financing, conduct due diligence, or fulfill other conditions before proceeding to the final purchase. While not requiring notarization like the final purchase agreement, it must still comply with German civil law requirements and typically includes details about the property, reservation period, fee arrangements, and conditions for proceeding to or withdrawing from the final transaction. The agreement is especially relevant in competitive property markets where buyers need to secure their interest in a property during the preparation phase of the transaction.

What sections should be included in a Real Estate Reservation Agreement?

1. Parties: Identification of all parties including full legal names, addresses, and registration details for legal entities

2. Background: Context of the reservation agreement, including brief description of the property and parties' intentions

3. Definitions: Definition of key terms used throughout the agreement

4. Property Details: Detailed description of the property including address, land registry details, and current ownership status

5. Reservation Period: Duration of the reservation period and specific dates of validity

6. Reservation Fee: Amount of reservation fee, payment terms, and conditions for refund or forfeiture

7. Exclusivity: Seller's commitment not to sell or offer the property to other parties during the reservation period

8. Intended Purchase Price: Agreed preliminary purchase price for the property

9. Conditions: Conditions that must be met before proceeding to the main purchase agreement

10. Termination: Circumstances under which either party may terminate the reservation agreement

11. Legal Effect: Clarification that this is not a binding purchase agreement and requirements for the final sale

12. Governing Law: Specification of German law as the governing law and jurisdiction

What sections are optional to include in a Real Estate Reservation Agreement?

1. Due Diligence: Terms regarding the buyer's right to conduct property investigations, used when the buyer requires specific due diligence rights during the reservation period

2. Financing Contingency: Conditions related to the buyer's ability to secure financing, included when the buyer's ability to proceed depends on obtaining a mortgage

3. Property Condition: Specific provisions about the current state of the property, included when there are notable property conditions or ongoing works

4. Broker Provisions: Terms relating to real estate agents' involvement, included when brokers are part of the transaction

5. Assignment Rights: Terms governing whether the reservation can be assigned to another party, included when transfer rights are relevant

6. Confidentiality: Provisions regarding confidentiality of the transaction, included for sensitive or high-value transactions

7. Language Provisions: Specification of prevailing language version, included when agreement is bilingual

What schedules should be included in a Real Estate Reservation Agreement?

1. Property Description Schedule: Detailed technical description of the property including boundaries, features, and included fixtures

2. Property Plans: Floor plans, site plans, or other relevant property drawings

3. Payment Schedule: Detailed breakdown of reservation fee payment terms and timing

4. Due Diligence Documents: List of documents to be provided for buyer's review during reservation period

5. Proof of Identity: Copies of identification documents as required by German anti-money laundering regulations

6. Power of Attorney: If applicable, documentation authorizing representatives to act on behalf of either party

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Germany

Publisher

Genie AI

Cost

Free to use
Relevant Industries

Real Estate

Property Development

Construction

Investment Management

Banking and Finance

Legal Services

Property Management

Hospitality

Retail

Commercial Property

Residential Property

Relevant Teams

Legal

Real Estate

Acquisitions

Development

Investment

Asset Management

Property Management

Risk & Compliance

Operations

Finance

Relevant Roles

Real Estate Manager

Property Developer

Investment Manager

Legal Counsel

Real Estate Agent

Property Manager

Acquisition Manager

Development Director

Real Estate Partner

Transaction Manager

Asset Manager

Portfolio Manager

Compliance Officer

Risk Manager

Real Estate Analyst

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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