The following framework can protect buyers and owners

It is advisable to have the purchase contract reviewed by an independent legal advisor. A notarized purchase contract should contain clauses that exclude foreclosures on the property and ensure that the buyer is protected by a preliminary entry in the land register. This secures the claim to ownership.

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insurance against insolvency

Insolvency insurance protects against foreclosures and ensures that the property is completed. In the event of insolvency, the insurer will cover the costs of completing the construction project, which provides additional security for buyers and owners.

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First signs of impending insolvency of the property developer

• The developer demands advances and installments that exceed the agreed payment plan.
• Construction stops or delays occur.
• Subcontractors are not paid and stop work.
• Material that has already been delivered will be picked up.
• Check online at www.insolvenzbekanntmachungen.de whether there is an insolvency entry.

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Consequences for buyers and owners

Buyers can hope that construction will continue under a new developer. However, the new developer is unlikely to be liable for the construction work of the insolvent predecessor. This often leads to higher costs and delays . In addition, the property loans remain in place even if construction is stopped.

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Buyer in an uncertain position

The insolvency of a developer can lead to long delays and additional costs. Buyers are often forced to call in a construction expert to assess the progress of construction. Legal steps, such as hiring a lawyer, are also necessary.

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Is compensation against banks possible?

Buyers should check whether the bank that financed the property developer is liable for damages . The bank could be liable if it was aware of the property developer's financial situation and continued working anyway.

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How can buyers and owners further protect themselves?

Buyers should have the developer's contract , the declaration of division and the construction and service description checked before signing the contract. It is particularly important to pay attention to legal pitfalls and disadvantageous regulations. Insurance such as insolvency insurance and construction warranties should also be checked.

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opening of insolvency proceedings

After the insolvency court has opened insolvency proceedings, the property developer loses control of his assets (Section 80 InsO). The insolvency administrator takes over the administration of the insolvency estate and ensures that the creditors are satisfied.

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Termination after insolvency of the property developer: A special case

A premature termination of the property development contract during insolvency can have serious consequences. The reservation of transfer in the land register becomes ineffective and the insolvency administrator can authorize the deletion of the reservation without having to refund the purchase price. It is therefore advisable to seek legal advice before terminating the contract.