A joint property purchase often begins with a simple idea: both pay and both own the flat. However, the legal structure and the financing require more precise information. What should the ownership shares be? Which personal funds come from which person? Who will be the borrower and how should future changes be regulated? If these questions are answered separately, incorrect expectations can be identified early.
Describe the intended acquisition of ownership concretely
§ 1008 BGB deals with ownership by several persons in fractions. [1008] For the planned purchase the appropriate structure must be clarified in the concrete contract and land register handling. Living together alone does not determine a particular quota. This article deals with the preparation of a direct joint acquisition and does not replace advice on alternative structures.
Our editorial recommendation: First write down the desired situation in simple words. Which property is to be acquired jointly and which shares are intended? What reasons speak in favour of this allocation? This is a basis for discussion with the notary, not a self-drafted legal agreement. Changes to the structure should not only emerge incidentally on the day of notarisation.
Document personal funds as a flow of money
Prepare an overview with amount, origin and the time when the funds will be available. Distinguish personal assets from gifts, private loans or a sale proceed that is still outstanding. A later obligation to repay does not disappear simply because the money is initially in the joint account. Keep suitable receipts and provide all information required for the financing in full.
Record payments for acquisition costs, planning or initial works as well. A contribution to the purchase price does not automatically equate to a contribution to later ongoing maintenance. Which claims or tax questions arise from this should be examined appropriately. Do not use your own spreadsheet as an allegedly conclusive proof of all legal consequences.
Understand the bank obligation separately
If several borrowers are jointly and severally liable, § 421 BGB describes an obligation under which the entire performance can in principle be demanded from any of those persons, but only once in total. [421] Whether this is agreed in the present loan contract must be apparent from the actual documents. A half ownership share does not by itself prove an obligation to the bank limited to one half.
Therefore have it explained who is debtor, which securities are provided and which internal agreements are taken into account at all vis-à-vis the bank. A privately agreed split of instalments and a contractual status effective against the bank are different levels. If you mix these levels, a seemingly fair table can conceal a significantly more extensive obligation.
An example with unequal payments
Purely fictitious: One person pays more personal funds, both wish later to pay roughly equal ongoing contributions. They therefore consider which ownership quotas to agree and whether an additional internal equalisation is sensible. None of these questions is answered by the transfer of the first instalment alone. Before signing they discuss the desired relationship with the responsible professionals.
For their own preparation they keep two series of figures separately: ownership shares and actual monetary contributions. If later one person finances a major renovation, this is documented as a new issue. The previous allocation does not simply change quietly in a private spreadsheet. Which arrangement is suitable for this depends on the specific case.
Anticipate changes in good time
Discuss sale, one person moving out, reduced income and the organisation of ongoing decisions. A rule for a conflict is easier to design while both parties see the same documents and no deadline is pressing. This article does not provide a blanket solution and does not assert any automatic claim to takeover or payout.
Editorial practical tip: For each change noted three questions: Who must decide, which financing remains to be serviced and which valuation or accounting would be necessary? These questions help the professional advice, instead of already formulating an uncertain contractual clause yourself.
In the end ownership, financing and the internal agreement should fit together without being equated with one another. Keep the agreed versions and their receipts in order. Individual review is required for contractual, tax and inheritance matters. Clear preparation does not replace that, but it does ensure that the actually desired joint solution can at least be described understandably.