Purchasing commercial property in Germany involves market research, careful site selection, and a structured transaction process from offer to closing. Our team provides guidance at each stage, helping you identify suitable locations and ensuring that the purchase is carried out smoothly. Our lawyers remain in your corner, representing your interests throughout the transaction.

Commercial leasing is a different proposition from regular residential tenancy in Germany. Whereas residential tenancy has greater protections under the German Civil Code (Bürgerliches Gesetzbuch, BGB), commercial tenancy law allows greater flexibility through freedom of contract. Both parties in a commercial leasing transaction are treated as equals under German law, which means the content of the lease agreement itself carries significant weight – protections that a residential tenant receives by statute must, in a commercial context, be negotiated and written into the contract.

Leasing agreements need to state the rental property’s identity, the lease’s purpose, the rental period, and the agreed fee. Such contracts can also address the extent of land usage (whether parking and cellar space is included), extended notice periods, deposit arrangements, and clauses concerning protection against competitors. Notice periods are generally around six months but can be extended by agreement. Extraordinary termination is available to either party where the other fails to fulfill contractual obligations. The rent itself can be a fixed rate, a graduated amount increasing at agreed intervals, or tied to the commercial tenant’s turnover.

Germany is one of the most attractive markets in Europe for businesses looking to establish or expand. Its strategic location at the heart of Europe, economic and political stability, and strong investment environment make it a natural choice for international companies entering the continent. The German market is particularly open to small and medium-sized enterprises.

Finding the right location is essential to a commercial property decision. The optimal choice typically depends on:

• the nature of the commercial enterprise and its customer base
• the local market and competitive landscape
• whether the property is intended as a flagship location or a branch operation
• transport links, infrastructure, and proximity to suppliers or clients
• the financial situation of the company and available budget for premises

Under Section 433(1) BGB, a seller of real property is obliged to deliver the property to the buyer, to procure ownership, and to ensure the property is free from material defects and defects of title. A commercial property purchase agreement must be drafted with precision – gaps, ambiguous clauses, or poorly negotiated liability provisions can create significant exposure for the buyer long after the transaction has closed. Our contract lawyers draft and review commercial property purchase agreements from the buyer’s or seller’s perspective, ensuring that the agreed terms are legally sound and aligned with each client’s commercial priorities.

A well-structured commercial property purchase agreement should address the following:

• the precise scope of what is being transferred, including fixtures, fittings, technical installations, and any ancillary rights such as easements or rights of way
• the purchase price, payment conditions, and any agreed adjustments, including apportionment of rent and service charges where the property is tenanted
• representations and warranties by the seller regarding the property’s condition, planning status, existing encumbrances, and any outstanding disputes or environmental liabilities
• the allocation of liability for material defects and defects of title, including any agreed limitations on that liability
• conditions to completion, such as regulatory approvals or required consents
• arrangements for the period between signing and land registry registration, including the priority notice (Auflassungsvormerkung) and any restrictions on the seller’s ability to encumber the property in the interim

We review existing draft agreements before signature to identify unfavorable clauses, gaps in protection, and provisions that may be unenforceable under German law.

Section 434 BGB defines a material defect by reference to both subjective and objective requirements. The property must conform to the nature agreed by the parties, be suitable for the use on which the contract is premised, and meet what a buyer may reasonably expect given the type of property. Section 435 BGB defines a defect of title as any right that a third party can assert against the buyer in relation to the property. Importantly, a right entered in the land registry (Grundbuch) that does not in fact exist is treated as a defect of title under Section 435 BGB – a risk that makes thorough land registry due diligence essential before contracts are signed.

In practice, commercial property purchase agreements in Germany frequently include extensive exclusions or limitations of the seller’s liability for material defects. The enforceability of such clauses depends on the specific drafting and the circumstances of the transaction, and they can significantly restrict a buyer’s remedies if defects emerge after completion. Our lawyers negotiate carve-outs for fraudulently concealed defects and for defects identified during the due diligence process, and flag provisions that may prove unenforceable under German law.

Where a property proves to be defective after the transfer of ownership, Section 437 BGB sets out the buyer’s principal remedies: the right to demand cure (Nacherfüllung), the right to rescind the contract or abate the purchase price, and the right to claim damages. The availability and scope of these remedies depend on the nature of the defect, any contractual limitations agreed between the parties, and the applicable limitation periods under Section 438 BGB.

Section 438 BGB establishes the following default limitation periods for defect claims, which may be modified by agreement between the parties:

• 30 years for defects consisting of a right in rem on the basis of which surrender of the property may be demanded, or a right entered in the land registry
• 5 years for defects in relation to a building, and for defects in materials used in a building in accordance with normal use, running from delivery of possession
• 2 years in all other cases, running from delivery

Where the seller has fraudulently concealed a defect, the standard three-year limitation period may apply in place of the shorter periods. The applicable period depends on the nature of the defect and the specific circumstances of the transaction, and legal advice should be sought promptly on discovering any potential defect. Our lawyers advise buyers on identifying and documenting defects promptly and on the steps required to preserve claims within the applicable period. For matters involving construction defects in newly built or recently renovated commercial property, our construction law team provides dedicated advice.

Ensuring that the purchase or sale of commercial property is carried out correctly can be a lengthy process. Our real estate lawyers are fully aware of the questions that need to be asked and analyze each situation methodically, including:

• the property’s legal title and any registered encumbrances
• existing leases and tenant obligations affecting the property
• zoning and permitted use restrictions
• structural condition and any environmental liabilities

A methodical approach ensures that we can examine the property from all relevant angles and that the transaction is carried out accurately. Skipping due diligence or carrying it out incorrectly can result in major costs and disputes further down the road.

The major advantage of working with our German real estate lawyers is that they know the German market. They can provide clear guidance on what to expect, from advice on solid and profitable investments to counsel on where to establish your company and which laws apply in those locations.

Our lawyers provide our global clients with the support needed for their business to thrive in the German market.

Purchasing commercial property gives the buyer full ownership and control, including the ability to modify, develop, or sell the asset, but requires significant upfront capital and involves greater transaction costs including notarization fees and property transfer tax. Leasing provides access to commercial premises without the capital outlay of ownership, with greater flexibility to relocate or downsize, but offers no equity stake in the property and is subject to the terms negotiated in the lease agreement. Commercial leases in Germany are governed primarily by the general provisions of the German Civil Code, with contractual freedom playing a central role since commercial tenants do not benefit from the statutory protections available to residential tenants. Our lawyers advise on both acquisition and leasing structures, helping clients identify the approach that best fits their operational and financial position.

The table below highlights the principal differences between purchasing and leasing commercial property in Germany.

Buying commercial property in Germany follows a structured legal sequence. Ownership passes only when the transfer is registered in the land registry (Grundbuch) – not when contracts are signed, or the purchase price is paid.

1. Agree on the heads of terms. The buyer and seller set out the principal commercial terms in a non-binding letter of intent. This is the right moment to appoint legal advisors, before any binding commitments are made.
2. Conduct due diligence. Your lawyers conduct a thorough review of the property’s legal status — examining the land registry, checking existing leases, verifying zoning and permitted uses, and identifying any environmental or legal risks.
3. Negotiate and draft the purchase agreement. The purchase agreement covers the price, scope of transfer, defects liability, warranties, and conditions to completion. The final draft is prepared in close coordination with the notary.
4. Notarize the agreement and declare the Auflassung. The purchase agreement is certified before a notary under Section 311b (1) BGB, and the formal conveyance declaration (Auflassung) is made by both parties under Section 925 BGB. Both steps typically take place at the same appointment.
5. Register a priority notice. The notary registers an Auflassungsvormerkung (priority notice) in the land registry, protecting the buyer’s position while the transfer is processed.
6. Pay the purchase price. Payment is made once the priority notice is in place and any agreed preconditions have been met.
7. Settle property transfer tax. Property transfer tax (Grunderwerbsteuer) is assessed following notarization. The tax authority issues a clearance certificate (Unbedenklichkeitsbescheinigung) once the liability is settled – without it, the notary cannot proceed with the registration of the transfer.
8. Register ownership. The notary registers the buyer as the owner in the land registry. Under Section 873(1) BGB, this is the moment legal ownership passes – not before.