Attorney at law specialised in real estate law in Vienna and the surrounding area

When purchasing a property, the trustee ensures that the purchase price for the apartment or property is not paid out to the seller until certain conditions are met. For these purposes, the purchase price is paid by the buyer into a separate escrow account after signing the purchase agreement. The purchase price is paid out by the trustee (in accordance with the provisions of the trustee agreement) when either all documents for registering the ownership have been received or the buyer’s ownership has been registered in the land register. This ensures, on the one hand, that the seller receives the purchase price and, on the other hand, that the purchase price is not paid out until it has been ensured that the buyer’s ownership can also be registered in the land register.

Since the sale of apartments and real estate regularly involves large sums of money and complicated legal issues may arise, legal advice should be sought as early as possible. A lawyer may examine the object of purchase from a legal point of view, assist with the preparation and negotiation of the purchase offer and, subsequently, the purchase contract.

Practical experience shows that from the buyer’s point of view, it is advisable to hire “one’s own” lawyer to draft the purchase contract. Often, the purchase agreement is drafted by the lawyer of the professional seller, such as a property developer. The lawyer mandated by the buyer ensures that the interests of the buyer are adequately protected, and that the buyer is sufficiently informed about each clause and the risks of the contract.

In case of any questions of interpretation, such as whether certain conditions for paying out the purchase price are met, it might be helpful if the purchase agreement is drafted by the buyer’s lawyer (which might also assume the role of the trustee).

The services of an attorney at law in connection with the purchase of an apartment, a house or a property include, for example, checking the status of the land register, drawing up the purchase agreement, negotiating it with the parties or the lawyer appointed by them, organizing the signing, performing the calculation and transfer of taxes, repaying any loans of the seller with the purchase price, performing the registration of the deletion of any existing mortgages and registering the ownership of the buyers and any new mortgages.

If the seller accepts the buyer’s purchase offer by countersigning it, the offer is usually already a legally valid contract for the purchase of the property. For this reason, the apartment, the house or the property as well as the purchase offer should be checked from a legal perspective before it is signed. A subsequent withdrawal from the purchase offer is only possible under very limited conditions.

For more details on the legal aspects of the purchase offer when buying real estate, see the following article in my blog.

Buyers of an apartment, a house or a property often ask themselves after signing the purchase offer or the purchase contract whether they can still withdraw from the respective contract. Subject to a few exceptions, it is generally not possible to withdraw from a real estate transaction unless a right of withdrawal or a condition has been expressly agreed. Often, interested parties are even not aware that the purchase offer is a legally binding contract and that the purchase agreement merely governs further details and is only signed in a notarized form for the purpose of registration in the land register.

Under certain conditions, consumers may withdraw from the purchase offer within one week if they have signed it on the day of the first inspection of the object of purchase. In addition, a consumer may have the right to withdraw from a transaction if a certain material condition promised by the seller does not materialize. Moreover, not only in consumer business there is a right of withdrawal if the seller does not provide his services on time and is thus in delay. The Real Estate Development Contract Act (BTVG) provides for a right of rescission if the selling developer fails to provide certain information to the buyer at the right time.

However, all of these rights of withdrawal can only be exercised under very specific conditions, which is why a comprehensive examination of the facts is required in any case for a more detailed statement on this.

As a lawyer who is drafting the purchase agreement, I take care of the calculation of the real estate transfer tax, the court registration fees and the real estate income tax. This service is usually included when I am mandated to draft the purchase agreement. The buyer deposits the taxes and fees with my law firm as trustee and I then pay them to the tax office on his behalf.

When selling an apartment or other real estate, the seller must generally pay tax on the capital gains and pay the so-called real estate income tax. In addition to other exemptions from real estate income tax, the sale of the property is tax-exempt if the object of purchase is the main residence of the seller. There are two cases to be distinguished. On the one hand, no real estate income tax is to be paid (in simplified terms) if the seller has lived in the purchased property continuously for at least two years from the time of purchase until the time of sale. The main residence exemption also applies if the seller has lived in the purchase object for at least five years within the last ten years.

It should be noted that these regulations are complicated in detail and that a legal assessment on whether such exemption applies or not requires an examination of the underlying facts.

In simple terms, the construction contract usually governs the provision of construction services of all kinds against payment. It is advisable to determine the subject matter of the contract in the construction contract in detail to mitigate future disputes about the scope of services. Other points that should not be missing in any construction contract are a precise schedule of completion and ideally also the individual partial services, as well as, if you have enough bargaining power, contractual penalties for the delay of performance of services. To avoid unpleasant surprises later, it is advisable to agree on a lump sum price. If the parties should agree to such a lump sum, it should be explicitly stated in the contract.

The general rule is that the seller of an apartment, a house or a plot of land is responsible and liable under the statutory warranty provisions for defects of the object of purchase existing at the time of handover. If a defect existed at the time of handover of the object or if the defect was already present at that time, the buyer primarily has the right to demand correction of the defect. If the seller does not fulfill his obligation to correct the defect, the buyer can demand in court either the correction, a price reduction or the withdrawal from the purchase contract for the property.

It should be noted that the warranty can generally be excluded between private individuals, which largely reduces the seller’s liability. It is therefore even more advisable from the buyer’s point of view to ensure, ideally already in the purchase offer, but at least in the purchase contract, that the warranty is not limited. Verbal representations by the seller should also be documented in the purchase agreement. Conversely, the seller is advised to exclude the warranty as far as possible, waive the right to contest errors and exclude claims for damages.

If it is certain that the purchased property (be it an apartment, a house or a plot of land) had a defect when it was handed over, the first step is to check whether the seller is liable for this defect. In order to assess this, the contractual agreement between the parties provides an initial indication, for example, whether a warranty waiver was agreed, or certain representations were made.

If this assessment is positive, the seller is usually first notified of the defects and requested to correct (improve) the existing defects. If the seller does not comply with this request, or does so only inadequately, then the buyer has the option of (judicially) asserting a correction, a price reduction or a withdrawal from the purchase contract.

When buying or selling an apartment, a house or a plot of land, the purchase agreement is usually drafted by a lawyer or a notary. In any case, the notary must certify the signatures of the parties in order for the ownership to be registered in the land register. If the parties decide to have the contract drawn up by a lawyer, then the signing can take place in the lawyer’s office, which the notary also attends to perform the certification of the signatures.

Real estate law is a cross-sectional subject which, besides the acquisition of real estate, includes land transfer law, land register law, tenancy law, condominium law, developer contract law, taxes and duties, regional planning and building law as well as brokerage law.