Real Estate Purchase Agreement in Austria

You've finally found the perfect property or the ideal buyer for your property and reached an agreement on the purchase price. Now, you're surely wondering what to consider in a real estate purchase agreement in Austria from a legal standpoint. A well-crafted purchase agreement can protect against various issues, such as the buyer blocking the entire transaction process due to payment delays or the seller getting away with significant defects due to a warranty exclusion.

Key elements in a Real Estate Purchase Agreement in Austria

Key elements that should be included in a residential or commercial property purchase agreement:

Essential details of the contracting parties (names, addresses, company registration numbers, etc.).
Description of the subject matter of the agreement (detailed description of the property, including areas, building permits, construction year, and any existing defects).
Reference to the current status in the land register and any external rights/encumbrances (e.g., mortgages, easements, access rights, servitudes, usufruct rights, etc.), specifying which will be assumed and which will not.
Specification of the purchase price (gross or net purchase price, any variable components) and a due date.
Payment, signing, and handover modalities (e.g., deposit payment, depositing the purchase price in escrow, handover protocol, etc.).
Provisions regarding the right of withdrawal (e.g., in case of delay in handover or payment of the purchase price).
Warranty provisions (defining which defects entitle to warranty within a specified period).
Applicable law and choice of jurisdiction agreement.
Notarized signature by both contracting parties.

Tips on what buyers should consider in a Real Estate Purchase Agreement in Austria

Before signing the purchase agreement, pay attention to the following points as a buyer:

Thoroughly inspect the property from a technical perspective. This applies not only for old buildings but also for newer apartments, as defects often emerge after a few years.
Consider having an economic and tax review (e.g., positive cash flow, choosing between asset and share deals for investment properties, considering personal living expenses with high mortgage rates).
Seek legal advice on the purchase (offer formulation, land register status, zoning and development plan, legal advice on tenancy issues, especially for investment properties, if applicable, real estate traffic law).

At the conclusion of the purchase agreement, buyers should consider the following points:

When concluding the purchase agreement, be aware that in Austria, accepting the buyer's purchase offer by the seller creates a legally binding contract, unless explicitly stated otherwise. Offers, such as those provided by a real estate agent, are generally legally binding. Be cautious when making an offer without reservations (e.g., financing reservation, reservation of approval from land authorities). Such offers are generally legally enforceable.
As a buyer, you can generally choose the legal professional, that is in charge of the contract (usually a lawyer or notary). The buyer bears the contract drafting costs. Therefore, choose someone you trust who takes the time to address your questions and concerns.
We highly recommend that parties who speak English choose a lawyer (or notary) fluent in English. Furthermore, it is strongly advised to select a legal professional willing to draft a bilingual purchase agreement, ensuring a clear understanding of all contract clauses.
Especially for developer-owned properties, the purchase agreements are usually prepared by the seller's law firm (or notary). These agreements are often seller-friendly. It's worthwhile to have a lawyer review and potentially renegotiate the purchase agreement.
Pay close attention to the wording of the warranty clause, and ask the contract drafter about its content and consequences, as nuances can make a significant difference.
Consider additional costs, especially fees for land register entry (property rights and, if applicable, mortgages), real estate transfer tax, contract drafting costs, notarial certification, etc.

Tips on what Sellers should consider in a Real Estate Purchase Agreement in Austria

Before concluding the purchase agreement, sellers should consider the following:

Evaluate the property from a technical and economic perspective in advance. Legal advice may be beneficial. For example, the value of the property could increase if land registry entries are cleared, contracts are terminated, or new contracts are concluded, etc.
Consider the tax implications, such as real estate capital gains tax for private sellers, corporate income tax for legal entities, and the choice between share deal and asset deal. Different options can be calculated in advance.

At the conclusion of the purchase agreement, sellers should consider the following points:

When concluding the purchase agreement, pay attention to the buyer's creditworthiness, as far as you can ascertain it. If in doubt, secure yourself legally in the purchase agreement (e.g., through withdrawal rights, deposits, etc.).
Be aware that the entire process may be delayed in case of a required approval from land authorities (foreigner land transactions, agricultural land transactions, etc.) or if the buyer relies on external financing. Factor this into the buyer selection process.
Transparently and verifiably communicate any defects to avoid warranty and damages processes.
When selling, it is mandatory to present an energy certificate (not older than 10 years). It's advisable to obtain this in advance.

There are a lot of things to consider when you are buying as a foreigner in Austria. We have summarized a few key points in this article.

Do you have more questions about Austrian real estate law?

Explore our real estate law services for any additional questions about property purchases or sales. We specialize in managing real estate contracts. We can also draft a bilingual agreement, ensuring you understand all clauses. Giving you peace of mind against unforeseen surprises in the future.

Please reach out to our law firm under office@geuer.at or by phone at +43-1-4380072. We look forward to your inquiry.