10 ms·

The Notar does much more than just read the contract; he is liable for the correct administration of the transfer of ownership (done by a three phase process wh

The Notar does much more than just read the contract; he is liable for the correct administration of the transfer of ownership (done by a three phase process which guarantees that the seller cannot get the money without transferring the property and the buyer cannot get the property without selling the money). The concept of title insurance doesn't exist in Germany as the Notar eliminates the risk.

nickff 2y ago
From a brief search, title insurance often costs around 0.1% of the purchase price of a property; it seems the Notars are collecting a monopoly rent in Germany.
- StefanWestfal 2y ago
  Common in practice is 0.5%
- rad_gruchalski 2y ago
  They still have to read the deed!
twixfel 2y ago
OK but how is it that other countries get by without them for founding LLCs? Are there countless scams going on in the UK surrounding limited company for example since you don't need a notary there? There's often lots of post hoc justifications in Germany for "why it is that way" (and has to be that way). But nobody ever seems to stop and think: ok but the rest of the world seems to get by OK without these reams and reams of bullshit? The problem with Germany is not that it is stuck in the 20th century and completely backwards, but that nobody seems to care that it is. Worse, if anything there seems to be a degree of pride among Germans of the "process". As soon as you criticise some piece of particular bullshit German bureaucracy (as opposed to bureaucracy in general, which generally you're permitted to criticise) then they start circling the wagons (often pointing to other countries where the situation is supposedly the same or worse). So it is never going to change.
- calvinmorrison 2y ago
  My assumption of the bureaucracy is that it stems out of the German empires professional service
- freyfogle 2y ago
  I now have a German GmbH and had a UK Ltd in the past for 10 years. Definitely there is more seriousness/trustworthiness to a GmbH. I am not sure there are "countless" scams in the UK, but yes, in 10 years of commercial operation did come across a few oddities. Example - a customer (UK Ltd) who declared bankruptcy owing us a money and then then next day founded a new Ltd company and tried to act like he didn't owe us the money because it was a new entity. See https://en.wikipedia.org/wiki/Pre-packaged_insolvency https://en.wikipedia.org/wiki/Pre-packaged_insolvency I have not come across this kind of thing in Germany.
  - rrr_oh_man 2y ago
    > I have not come across this kind of thing in Germany. Oh, it does exist :)
    - freyfogle 2y ago
      Obviously there is fraud everywhere. Still, I have a higher level of basic trust when dealing with a GmbH than someone who created their Ltd Co 3 hours ago. It's just a sign they are a more serious/stable business counter party to deal with.
    - RamblingCTO 2y ago
      Yeah! Especially rampant is reusing names of closed GmbHs, reopening them, sending out invoices and stuff like that. Or spamming newly created GmbHs with phantasy invoices. Or the scam that's called Abmahnung by lawyers. There's plenty in Germany, so don't be fooled.
  - ProjectArcturis 2y ago
    > a customer (UK Ltd) who declared bankruptcy owing us a money and then then next day founded a new Ltd company and tried to act like he didn't owe us the money because it was a new entity. That is... how bankruptcy works? He literally didn't owe you money anymore. Obviously you shouldn't extend his new company credit, but extinguishing old debts is the exact purpose of bankruptcy.
StefanWestfal 2y ago
There are ways to ensure the correct transfer of ownership without involving a third party. You can see these principles at work on some trading platforms already, be it for Magic cards or something else where parties cannot trust each other because they do not know each other. Next, you would expect that the notary would educate participants and act as a source of trust, an actor in your best interest, but that is not the case. Notaries can change contracts until the last minute, and unless agreed upon, the common 14-day withdrawal period for contracts does not apply to things like buying property. Furthermore, if you are inexperienced, you can easily fall into traps. As a concrete example, when buying a part of a shared property, it is commonly believed that the "Hausordnung" (house rules) is the owners' agreement for house rules. However, that is not the case, as there can be more, and in our case, it forbade us to keep dogs. Now, you could argue that we should have made ourselves more familiar with the law, and I would agree that is true. However, it begs the question, why do we need a notary?
- Slartie 2y ago
  > There are ways to ensure the correct transfer of ownership without involving a third party. You can see these principles at work on some trading platforms already, be it for Magic cards or something else where parties cannot trust each other because they do not know each other. So what else is that "trading platform" then, if not a "third party"? The way in which this problem is solved is by introducing a third party that is trusted by both, seller and buyer. There's nothing wrong with this principle. What's wrong specifically with regard to notarys as a third party in property sales in Germany is that the amount of work involved in being this third party does not really scale linearly with the value of the thing to be transferred, but the system by which the price of the notaries' work is determined assumes that a property transfer is twice as laborious (and thus must be twice as expensive) if the property is twice as expensive as some other property. Which is BS.
  - StefanWestfal 2y ago
    Indeed, my mistake and agree. Here, I wanted to refer to the fact that the transfer of ownership could likely be done even without involving a notary or a human in a properly digitalized system.
fl7305 2y ago
> The concept of title insurance doesn't exist in Germany (Title insurance is where you must buy insurance when buying a house to guard against the risk that the house may have unknown liabilities or owners) It doesn't exist in Sweden either, because the ownership of houses is in a central register. You can't make a claim against a house if it is not registered. Funnily enough, there's no such register for condos in Sweden. So you can end up with a nasty surprise if it turns out you bought a condo that there were unknown bank loans against. But it doesn't happen often enough that there is title insurance against it.
- 2rsf 2y ago
  When I asked a real estate agent about buying a condo already owned by another they replied surprisingly "how can it happen? that would be illegal"
  - fl7305 2y ago
    :) Yeah, nothing illegal ever happens. Was this in Sweden? In that case, I have heard of cases where a condo that someone bought had an unknown bank loan taken out against it. The bank loan is still attached to the condo even if it changes owners. The bank can force you to sell the condo to pay the loan back to the bank. You can then turn around and sue the previous owner who took out the loan. Good luck with that. I don't think this happens very often and usually the condo association knows which loans are taken out against which condos.
- cess11 2y ago
  Insurance companies have a similar product though, 'dolda-fel-försäkring'. I'm not sure what a condo is, but if it's a 'bostadsrätt' then you check with the 'bostadsrättsförening', they're responsible for keeping a register of 'pantsättningar'.

nickff 2y ago

From a brief search, title insurance often costs around 0.1% of the purchase price of a property; it seems the Notars are collecting a monopoly rent in Germany.

StefanWestfal 2y ago
Common in practice is 0.5%
rad_gruchalski 2y ago
They still have to read the deed!

twixfel 2y ago

OK but how is it that other countries get by without them for founding LLCs? Are there countless scams going on in the UK surrounding limited company for example since you don't need a notary there? There's often lots of post hoc justifications in Germany for "why it is that way" (and has to be that way). But nobody ever seems to stop and think: ok but the rest of the world seems to get by OK without these reams and reams of bullshit? The problem with Germany is not that it is stuck in the 20th century and completely backwards, but that nobody seems to care that it is. Worse, if anything there seems to be a degree of pride among Germans of the "process". As soon as you criticise some piece of particular bullshit German bureaucracy (as opposed to bureaucracy in general, which generally you're permitted to criticise) then they start circling the wagons (often pointing to other countries where the situation is supposedly the same or worse). So it is never going to change.

calvinmorrison 2y ago
My assumption of the bureaucracy is that it stems out of the German empires professional service
freyfogle 2y ago
I now have a German GmbH and had a UK Ltd in the past for 10 years. Definitely there is more seriousness/trustworthiness to a GmbH. I am not sure there are "countless" scams in the UK, but yes, in 10 years of commercial operation did come across a few oddities. Example - a customer (UK Ltd) who declared bankruptcy owing us a money and then then next day founded a new Ltd company and tried to act like he didn't owe us the money because it was a new entity. See https://en.wikipedia.org/wiki/Pre-packaged_insolvency https://en.wikipedia.org/wiki/Pre-packaged_insolvency I have not come across this kind of thing in Germany.
- rrr_oh_man 2y ago
  > I have not come across this kind of thing in Germany. Oh, it does exist :)
  - freyfogle 2y ago
    Obviously there is fraud everywhere. Still, I have a higher level of basic trust when dealing with a GmbH than someone who created their Ltd Co 3 hours ago. It's just a sign they are a more serious/stable business counter party to deal with.
  - RamblingCTO 2y ago
    Yeah! Especially rampant is reusing names of closed GmbHs, reopening them, sending out invoices and stuff like that. Or spamming newly created GmbHs with phantasy invoices. Or the scam that's called Abmahnung by lawyers. There's plenty in Germany, so don't be fooled.
- ProjectArcturis 2y ago
  > a customer (UK Ltd) who declared bankruptcy owing us a money and then then next day founded a new Ltd company and tried to act like he didn't owe us the money because it was a new entity. That is... how bankruptcy works? He literally didn't owe you money anymore. Obviously you shouldn't extend his new company credit, but extinguishing old debts is the exact purpose of bankruptcy.

StefanWestfal 2y ago

There are ways to ensure the correct transfer of ownership without involving a third party. You can see these principles at work on some trading platforms already, be it for Magic cards or something else where parties cannot trust each other because they do not know each other. Next, you would expect that the notary would educate participants and act as a source of trust, an actor in your best interest, but that is not the case. Notaries can change contracts until the last minute, and unless agreed upon, the common 14-day withdrawal period for contracts does not apply to things like buying property. Furthermore, if you are inexperienced, you can easily fall into traps. As a concrete example, when buying a part of a shared property, it is commonly believed that the "Hausordnung" (house rules) is the owners' agreement for house rules. However, that is not the case, as there can be more, and in our case, it forbade us to keep dogs. Now, you could argue that we should have made ourselves more familiar with the law, and I would agree that is true. However, it begs the question, why do we need a notary?

Slartie 2y ago
> There are ways to ensure the correct transfer of ownership without involving a third party. You can see these principles at work on some trading platforms already, be it for Magic cards or something else where parties cannot trust each other because they do not know each other. So what else is that "trading platform" then, if not a "third party"? The way in which this problem is solved is by introducing a third party that is trusted by both, seller and buyer. There's nothing wrong with this principle. What's wrong specifically with regard to notarys as a third party in property sales in Germany is that the amount of work involved in being this third party does not really scale linearly with the value of the thing to be transferred, but the system by which the price of the notaries' work is determined assumes that a property transfer is twice as laborious (and thus must be twice as expensive) if the property is twice as expensive as some other property. Which is BS.
- StefanWestfal 2y ago
  Indeed, my mistake and agree. Here, I wanted to refer to the fact that the transfer of ownership could likely be done even without involving a notary or a human in a properly digitalized system.

fl7305 2y ago

> The concept of title insurance doesn't exist in Germany (Title insurance is where you must buy insurance when buying a house to guard against the risk that the house may have unknown liabilities or owners) It doesn't exist in Sweden either, because the ownership of houses is in a central register. You can't make a claim against a house if it is not registered. Funnily enough, there's no such register for condos in Sweden. So you can end up with a nasty surprise if it turns out you bought a condo that there were unknown bank loans against. But it doesn't happen often enough that there is title insurance against it.

2rsf 2y ago
When I asked a real estate agent about buying a condo already owned by another they replied surprisingly "how can it happen? that would be illegal"
- fl7305 2y ago
  :) Yeah, nothing illegal ever happens. Was this in Sweden? In that case, I have heard of cases where a condo that someone bought had an unknown bank loan taken out against it. The bank loan is still attached to the condo even if it changes owners. The bank can force you to sell the condo to pay the loan back to the bank. You can then turn around and sue the previous owner who took out the loan. Good luck with that. I don't think this happens very often and usually the condo association knows which loans are taken out against which condos.
cess11 2y ago
Insurance companies have a similar product though, 'dolda-fel-försäkring'. I'm not sure what a condo is, but if it's a 'bostadsrätt' then you check with the 'bostadsrättsförening', they're responsible for keeping a register of 'pantsättningar'.