The Declaration of Division

Understanding the Declaration of Division

In real estate law, the declaration of division (“Teilungserklärung”) is an essential document that plays a key role when a property complex is divided into individual condominium units.
It regulates ownership rights and defines the permitted uses within a residential complex. This article provides a detailed look at the concept of the declaration of division, with a focus on the key questions relevant to property owners and prospective buyers.

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Definition & Contents
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What Is the Declaration of Division?

As a legal instrument, the declaration of division is directly linked to the German Condominium Act (Wohnungseigentumsgesetz). It defines how a plot of land or building is divided into separate, independent units that can be treated as individually owned property (Sondereigentum).
Beyond defining the individual units, it also regulates how shares of the common property are allocated — such as stairwells, exterior façades, or garden areas — and sets out the rights and obligations of the owners.

Why Is a Declaration of Division Needed?

A declaration of division is required whenever a building is to be divided into multiple condominium units. This is particularly necessary when individual apartments in an existing multi-unit building are to be sold as separate ownership.
In this case, drafting such a declaration is an essential step to legally establish the individual ownership and to have it recorded in the land register.

Contents of the Declaration of Division

The declaration of division includes a wide range of information and details, such as:

A description of the plot of land and the building on it
The division of the building into private property (Sondereigentum) and common property
The allocation of shares in the common property
Rules for the use of private and common property
Guidelines for administration, including the holding of owners’ meetings
Possible special usage rights, for example for gardens or parking spaces

The Declaration of Division: What's In It

A description of the plot of land and the building located on it
The division of the building into private property (Sondereigentum) and common property
The allocation of shares in the common property
Regulations concerning the use of private property and common property
Guidelines for administration, including the holding of owners’ meetings
Possible special usage rights, such as for gardens or parking spaces

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In our community, you can easily ask questions via WhatsApp, benefit from knowledge and network.

How to Apply for a Declaration of Division

A declaration of division is usually prepared by a notary’s office. A notary drafts the document based on legal requirements and the individual agreements between the parties involved. Once completed, the declaration must be notarized and entered into the land register.

Costs of Preparing a Declaration of Division

The cost of a declaration of division varies and depends on factors such as the value of the property, the scope of the document, and the notary’s fees. In addition to notary costs, there are also fees for the land register entry. Providing an exact cost estimate is difficult, but you should expect expenses in the range of several thousand euros.

Missing Declaration of Division When Selling: What You Can Do

If the seller does not have a copy of the declaration of division, it can be requested from the relevant land registry office. Since the declaration is stored there when the individual ownership (Sondereigentum) is registered, it is kept on file and is publicly accessible. An informal request to the land registry office is sufficient, although fees may apply for issuing the document.

What Buyers Should Check in the Declaration of Division

For buyers of a condominium, it is essential to examine the declaration of division carefully. You should pay particular attention to the following points:

The exact definition of the private property (Sondereigentum) and the common property
The allocation and size of the co-ownership shares
Rules regarding special usage rights and whether they can be transferred
The administrative regulations and the associated rights and obligations
Any restrictions on the use of the private property

A thorough review of the declaration of division helps prevent future conflicts and gives you a clear understanding of your rights and obligations as an owner.

Urbyo Talks: Is investing in real estate in the current market still worth it?

What is the current interest rate market status? Is it still worth investing in real estate, and if so, what should you look out for when financing? Vivien asked our Head of Mortgage, Janina, these questions today. You can read her answers here.

Effects of the Declaration of Division on Lease Agreements

A key aspect when considering declarations of division is their impact on existing rental agreements. The main focus here is the tenant protection rules that apply when a declaration of division is created after a rental contract has been signed. These protections are intended to prevent tenants from losing their homes due to the subsequent conversion of rental units into condominiums, particularly through termination on the grounds of owner-occupation.

You should familiarize yourself with these regulations early on to avoid unexpected surprises and to ensure transparency and security for everyone involved in the tenancy.

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FAQ

How long is the declaration of division valid for?

Can a declaration of division be changed retroactively?

Is a negative cash flow an issue for a real estate investment

Not necessarily. Cash flow can be developed over time. A negative cash flow is not automatically a dealbreaker — it’s simply a snapshot of your current situation. However, you need to understand why the cash flow is negative and have a strategy for improving it over time.This can be achieved before the purchase by negotiating the purchase price, and after the purchase through property or rent improvements.You should be aware, though, that a temporarily negative cash flow does cost you money. Can you afford the additional monthly expense? If so, it’s not a problem at all. Think of it like making a monthly contribution to an ETF or a similar investment.

What makes Urbyo the better marketplace for real estate sales?

When selling properties through Urbyo, three unbeatable advantages come together.

With Urbyo, we make selling real estate as easy as possible for you. We take care of everything: from the listing to the notary appointment. You only have to give us the information about the object and the starting signal. Sounds good? It is!

You save hours of time
No viewings, no unnecessary phone calls with prospective buyers, no annoying cancellations shortly before closing.
You get 100% reliable buyers.
If a user wants to reserve an object, we check in advance that the creditworthiness is guaranteed,
that the creditworthiness is guaranteed. This increases the closing rate for you.
Individual services tailored to you
With Urbyo X, we give you various options to design your listing and property marketing the way you want it.

So just sit back, relax and let us do the work.

How does Urbyo help me as a seller?

Urbyo takes care of many tasks for you. Depending on how much you want us to support you, you can choose one of our Urbyo X packages.

Advertisement creation

We will gladly create your ad for you — but of course you can also do it yourself. With the Xplore package you can enter everything yourself. For more support and extras, check out our Xtra and Xpert packages.

Object verification

We offer Urbyo buyers only solid objects at fair prices. Your objects will be checked fast and free of charge by our experts.

Creation of audio and video guides

For Xtra and Xpert listings, we create, among other things, audio exposés and produce virtual tours of the district for potential buyers, so that everyone can get a comprehensive picture of the area.

Marketing

You decide when your advertisement is online. If you opt for the Xtra or Xpert package, we will also start actively marketing your property.

Closing the sale

No uncertainties: We accompany our buyers from A to Z in the purchase process and also take care of the financing, for example. You can be sure that we only match buyers to your property who have a corresponding financing commitment.

What do Urbyo listings look like?

Quality and transparency — Urbyo listings show buyers what to expect when buying an investment property. All at one glance.

Every buyer at Urbyo should get all the information they need for a
well-thought-out purchase decision. Our property listings all adhere to
the following structure:

Location, number of square meters, and ad ID
Video & images
Basic data:

We list all the important figures that are relevant to the buyer. In addition to the purchase price, this includes the ancillary costs and the initial yield and calculations
based on the level of financing.
Photos & videos:

Viewings are unnecessarily stressful for everyone involved — especially if it's "just" to look at an investment property. To spare tenants the hassle of multiple viewings and buyers the need to travel, we've created the Urbyo image service. We take photos from inside and outside and create virtual 3D tours upon request. Free of charge. If you're interested, don't hesitate to contact us. We'll coordinate a photo session with the existing tenants. If not, current photos of the property are also accepted.
Property appraisal:

Based on the property documents you send us, we give the Urbyo buyers a rating of the investment potential. The criteria for this are the purchase price per square meter, the gross rental yield, the population forecast, and the property's condition.
Property details:

Last but not least, we list the real estate agent(s) in charge and provide further details, such as the location, the floor plan, the investment calculator, and FAQ.

As you can probably tell, we approach our advertisements with great attention to detail. But it pays off — because you'll have an ad you can be proud of. And have way less hassle down the line.

Which factors influence my interest rate?

On the one hand, it always depends on your bank, the prime rate, and the economic situation. But there are also a few personal factors that can influence your interest rate:

1. The loan amount

Depending on how much money you want to borrow from the bank, you may have premiums or discounts on your interest rate. For example, some banks charge premiums for loan amounts under 50,000 euros and give discounts for sums of 100,000 euros or more.

2. The loan-to-value ratio

The loan-to-value ratio is nothing more than the financing share, i.e., how much of the purchase price you want to borrow. The higher the percentage, the higher the interest surcharges at the bank.

3. The fixed interest rate period

With construction financing, you can choose how long you want to be tied to the borrowing rate. If you select a long fixed interest rate because the interest rate is low, the interest surcharge will be higher.

4. The property value

The bank looks at the property from various points of view to determine the property value. If the bank thinks the purchase price you pay is too high compared to what the property is worth, there is often an interest surcharge.

5. Repayment & term of the financing

The higher your repayment, the shorter the term of your loan. The bank rewards this with a better interest rate. Of course, only if your repayment rate is realistic and you can afford the monthly costs.

6. Employment

As an employee, you often get a better interest rate than a self-employed person. This is because the bank has much less work to do in checking the loan. In addition, the risk that you, as an employee, will face financial difficulties in the meantime is lower.

7. Your postal code

Depending on where your desired property is located, the bank will evaluate the potential for appreciation. If they feel the value of your property is likely to increase, they will often offer you a better interest rate. In less attractive areas, on the other hand, you may have to accept a higher interest rate.

8. your Schufa-Scora

How reliably do you repay previous loans and other installments? Your Schufa score reveals it. And tells the bank whether they can trust you with a loan. If you have exclusively or predominantly positive entries, that's a good sign for the bank. It does not reflect well on you if you have a negative score or refuse to provide the Schufa information.

9. Commitment-free period & unscheduled repayment

The provision-free period and the unscheduled repayment are special conditions that can be agreed upon with a bank. Some banks will charge a higher interest rate for these extras if you take advantage of these options.

10. Purpose

Owner occupancy, real estate investment, or commercial rental? Banks want to know why you want to buy a property because there are often different interest rates here. For example, the interest rate is often better for owner-occupancy because banks assume you will take better care of your home than an apartment you sublet.

11. Special offers at the bank

If the timing is right, you're in luck: sometimes there are specials at the bank that you can snag if necessary. These include special discounts on specific properties, New Year's specials, etc.

Phew, quite a lot of points. And quite a few banks that you have to compare first.

How are you supposed to find the best offer? Don't worry: Our Urbyo financial experts will handle it for you. They know their stuff and which banks offer you the most attractive and sensible deals.

👉Are you interested in financing through Urbyo? Then feel free to send an inquiry to: finanzierung@urbyo.com or sign up directly for a conversation.

How does Urbyo support my real estate purchase?

We are convinced: Anyone who wants to buy real estate for investment should be able to do so. Urbyo is therefore there for everyone - whether you are an investment professional or a layman. With us you will get your investment property absolutely relaxed and fast.

Our mission is to make investing in real estate as comprehensible and uncomplicated as possible. That's why we map the entire process on our platform - from finding your favorite property to the notary appointment. Our experts are at your side every step of the way as advisors and contractors. Because: We take care of everything that annoys you.

And if you want to sell a property, you can do that just as easily with us.
By the way, in startup jargon we are also called a PropTech (property technology) company because of our services. With Urbyo, we offer you a new, modern digital solution in the real estate sector.

You can also find out more about our mission here. How the process works exactly, we explain here.

Why real estate?

Due to their stable value, real estate is a popular investment for many people and is affectionately called "concrete gold." Here we explain why it pays to invest in real estate. As a real estate owner, you can profit from numerous advantages:

Houses and land are generally very stable in value. They represent a tangible asset.
In many cases, you can cover the interest and repayments on a loan with the ongoing income from your rental income.
Rent increases make it possible to increase your income as well.
Value increases are very likely in the long run, which is good for an investment.
Real estate can be sold tax-free after ten years. That means you can then transfer your property to someone else tax-free.
Depreciation lowers your taxable income.
Your property can become an important component of your retirement provision.

It doesn't even matter if you live in a property yourself or if you simply buy properties as an investment: Urbyo makes it possible for many buyers for the first time to secure their own property as an investment. Use the building block "real estate" as a supplement for your asset development. Now you can!

How does Urbyo prevent fraudulent listings?

You won't get ripped off here. We check all objects on Urbyo before we release them for sale. Your security as a buyer is extremely important to us. For each property offered on urbyo.com, the seller must submit a number of documents, which are then checked by us. Only really solid objects come to our site. So you can be sure: Before the listings go online, we already know the properties very well. Fakes don't stand a chance.

How does Urbyo earn money?

If you find and buy a property at Urbyo, we celebrate with you and say: Congrats! We're happy to guide you through the process. Simply because we think that everyone should be able to buy a property — or two, or three ... We don't ask for any money from you.

If you want to see what properties we have on our site, just register with us.

Of course we have to earn money, but we get it from the bank. We work with over 1,400 banks and get a commission from them if the construction financing works out.

But don't worry, this doesn't mean that the commission is included in your financing and you pay more than you actually have to. Because we send the banks your documents ready to go, they save a lot of time and money. We just get a part of that.