The GbR in Real Estate Transactions

What should be considered when selling through a GbR?

Until December 31, 2023, real estate held by a GbR could generally still be sold under the old law. Registration in the partnership register could be avoided if the purchase contract was notarized in 2023 and the application for registration of the priority notice of conveyance was also submitted to the land registry within that year. If the purchase was to be financed, the financing land charge also had to be ordered before the turn of the year. However, sellers and buyers should in any case have the details of each sale examined by a notary and seek advice on this.

For sales notarized from January 1, 2024, a so-called land registry block applies. The execution of these sales can only begin once the GbR has become an eGbR through registration in the partnership register and the land register has been corrected accordingly. This applies even if the GbR is to be deleted from the register again immediately after the sale is completed. The application for registration in the register can be handled without complication when the purchase contract is notarized. However, a strong rush to the partnership register is expected, especially in the first few months, so the parties should be prepared for delays in contract processing. Unfortunately, registration cannot be applied for already in 2023. Individual advice from the notary is particularly advisable if payment and handover of the property cannot wait.

What should be considered when buying with a GbR?

It is expected that the GbR as a legal form for real estate acquisition will continue to lose attractiveness. For acquisition with a GbR since January 1, 2024, registration in the new partnership register is unavoidable. Forward-thinking buyers who want to acquire property as an eGbR in any case can save time by initiating the registration through the notary early on, even if there is no specific acquisition object in mind yet or the purchase contract is not yet ready for notarization. Similarly, the formation of the GbR can be handled without problems when the purchase contract is notarized. However, the delays in contract processing described above are then also to be expected. In addition, the pre-registration requirement prevents the buyers from being secured by registering a priority notice of conveyance.

Buyers who are considering acquiring property with an eGbR should definitely be aware of the publicity associated with the register entry and the obligation to register the eGbR in the transparency register. It is also still unclear at present how the entry into force of the MoPeG will affect taxation, in particular whether the tax privileges of the GbR under §§ 5, 6 GrEStG (Real Estate Transfer Tax Act) will be maintained. Against this background, the advice of a tax consultant should also be sought.

Nevertheless, choosing the GbR still offers certain advantages over acquiring property as co-owners of fractional shares. These include, in particular, the possibility of making more detailed provisions in the partnership agreement for the relationship between the partners, which, however, must also be coordinated with the inheritance law design wishes of the parties involved. Furthermore, the GbR can achieve better control with regard to the sale and inheritability of the shares (so-called vinkulierung). Finally, the GbR still allows for flexible shifting of participation quotas between partners outside the land register, which can be particularly interesting for non-marital partnerships. The notary's office is happy to help in finding a "tailor-made" solution.

What should be considered for existing GbRs?

Owners who have acquired property as a GbR in the past and are not currently planning to sell should use the upcoming changes as an opportunity to review and, if necessary, organize their participation relationships. A conversion from GbR to co-ownership must be notarized and could be carried out without pre-registration of the GbR in the partnership register until December 31, 2023. If the eGbR is still to be the legal form of choice, it would often be advisable to have a partnership agreement drafted, if this has not already been done. The new GbR law applies automatically from January 1, 2024, even if the GbR was founded under the old law. Even with existing partnership agreements, it is therefore worth taking an expert look to see if action is needed due to the changes. For example, the new law provides that heirs to a GbR share can demand that the co-partners grant them the position of a limited partner. However, the conversion into a limited partnership will often not be desired, so a corresponding provision in the partnership agreement is recommended, which our notary's office is happy to support in drafting.