Several months often pass between signing the notarized purchase agreement and the day on which you are officially registered as the owner in the land register. During this interim period, the seller legally remains the owner of the property—and this is exactly where the priority notice of conveyance comes in. It secures your claim to the property and is therefore one of the most important components of every real estate purchase. We explain how it works, what it costs, and how it differs from the conveyance.
What Is a Priority Notice of Conveyance?
The priority notice of conveyance is an entry in Section II of the land register that secures your claim as the buyer to the transfer of ownership. Legally, it is a priority notice under Section 883 of the German Civil Code (BGB). It does not yet make you the owner, but it effectively reserves your place in the land register: From the time of registration, all dispositions by the seller concerning the property that would defeat or impair your claim are ineffective against you.
The reason for this protection lies in German real estate law. Ownership of a property does not pass upon conclusion of the purchase agreement, but only upon agreement on the transfer of ownership and registration of the new owner in the land register (Section 873 of the German Civil Code (BGB)). Time passes until then—and during this phase, you as the buyer need protection.
Conveyance, Priority Notice and Priority Notice of Conveyance: The Differences
The three terms sound similar, but mean different things:
- Conveyance: The conveyance is the agreement under property law between the seller and buyer on the transfer of ownership (Section 925 of the German Civil Code (BGB)). It must be declared before a notary with both parties present simultaneously and may not be subject to any condition. Only the conveyance together with registration in the land register makes the buyer the owner.
- Priority notice: The priority notice is the general security instrument under Section 883 of the German Civil Code (BGB). It can be used to secure various claims to a change in rights to a plot of land—not only the claim to the transfer of ownership, but also, for example, a later claim for retransfer.
- Priority notice of conveyance: It is the most common special case of the priority notice and specifically secures Your claim to the subsequent conveyance, i.e. to the transfer of ownership. Important: The priority notice is only the protection of the claim—not ownership itself and not the conveyance.
In short: The conveyance transfers ownership; the priority notice merely secures your claim to it until the time comes.
Why the priority notice is so important
Without a priority notice, a dangerous gap would arise. As long as the seller is registered as the owner in the land register, they could theoretically sell the property a second time, encumber it with a land charge, or the seller’s creditors could initiate foreclosure proceedings in the meantime. The seller’s insolvency would also pose a risk to you.
The priority notice closes this gap. Pursuant to § 883 subsection 2 BGB, any disposition that impairs your secured claim is relatively ineffective vis-à-vis you—and this also applies to foreclosure measures or measures taken by an insolvency administrator. If the owner sells the property a second time, your claim protected by the priority notice takes precedence. Even against an objecting third party, you can demand consent to the necessary registration (§ 888 BGB). In addition, the priority notice secures priority of rank: What matters is the date of its registration, not the later date of the transfer of ownership.
For you as the buyer, this means quite specifically: You are adequately protected to pay the purchase price only once the priority notice has been registered.
Process: Where the priority notice fits into the sale
The priority notice is firmly integrated into the real estate purchase process:
- Notarization: The buyer and seller sign the purchase agreement before the notary. It stipulates that a priority notice is to be registered in favor of the buyer.
- Application to the land registry: The notary applies for registration of the priority notice with the competent land registry.
- Registration in Section II: The land registry registers the priority notice. Your claim is thereby secured.
- Purchase price due: Only then does the notary request payment from you—usually also subject to any deletions of old encumbrances and official approvals having been obtained.
- Conveyance and registration of transfer: After full payment, the conveyance is completed and the change of ownership is registered in the land register. As soon as you are registered as the owner, the priority notice has fulfilled its purpose and will be deleted.
The conveyance is often already declared in the same agreement, or the notary is instructed to submit it to the land registry only after the purchase price has been paid in full. This means that ownership remains with the seller until payment, while your claim is protected by the priority notice.
How much does a priority notice of conveyance cost?
The costs are governed by the Court and Notary Costs Act (GNotKG) and depend on the purchase price. As a rule, a half fee is charged for the priority notice, corresponding to approximately 0.5 percent of the purchase price. It therefore forms part of the total notary and land registry costs, which together usually amount to around 1.5 to 2 percent of the purchase price.
In practice, the buyer bears the costs as part of the ancillary purchase costs. The subsequent deletion of the priority notice after the transfer of ownership is generally free of charge, as it is completed with the registration of the new owner.
Advantages and disadvantages for buyers and sellers
- Advantage for the buyer – security: Your claim to the property is protected before you pay the purchase price. A double sale, subsequent encumbrances or the seller’s insolvency can no longer harm you.
- Advantage for the buyer – preservation of priority: The date of the priority notice secures your priority over rights registered later.
- Advantage for the seller – orderly process: Because the priority notice is a prerequisite for payment of the purchase price, it ensures a clear, reliable process. Ownership remains with the seller until payment.
- Disadvantage – costs: The buyer incurs additional notary and land registry fees.
- Disadvantage – time: Registration takes some time and therefore delays payment of the purchase price—but this protection is worthwhile in almost all cases.
FAQ about the priority notice of conveyance
Does the priority notice of conveyance make me the owner?
No. The priority notice only secures your claim to the transfer of ownership. You become the owner only upon the conveyance and registration as the new owner in Section I of the land register.
How long does registration take?
This depends on the workload of the competent land registry office. It often takes anywhere from a few days to several weeks. The notary will only notify you that the purchase price is due after registrationwith.
When may I pay the purchase price?
As the buyer, you should only pay the purchase price once the priority notice of conveyance has been entered and the notary requests payment. Before then, you lack the crucial protection.
Who bears the costs of the priority notice of conveyance?
In practice, the buyer pays the costs as part of the ancillary purchase costs. They amount to approximately half a fee under the Court and Notarial Costs Act (GNotKG), i.e. around 0.5 percent of the purchase price.
Will the priority notice be deleted again?
Yes. As soon as you have been entered in the land register as the new owner, the priority notice has fulfilled its purpose and is deleted. Your secured claim has then become definitive ownership.
What is the difference between conveyance and a priority notice of conveyance?
The conveyance is the binding agreement before the notary on the transfer of ownership. The priority notice of conveyance merely provides provisional security for your claim to precisely this conveyance until the transfer of ownership has been registered.
Conclusion
The priority notice of conveyance is a small entry with a major effect. It bridges the risky phase between the purchase agreement and registration of the transfer of ownership and ensures that your claim to the property can no longer be jeopardized by a second sale, new encumbrances or the seller’s insolvency. It is therefore the central prerequisite for buyers to pay the purchase price safely—and for sellers it ensures an orderly, reliable process. Anyone buying or selling a property should know this protection mechanism and take it into account in the purchase agreement.