• Sale and purchase agreement (Kaufvertrag)

Basically, the sale and purchase agreement contains all necessary terms and conditions of the transaction such as the description of the land (as stated in the Austrian land register), stipulation of the purchase price, allocation of taxes and additional costs. In addition, the agreement usually contains representations and warranties of the seller for the benefit of the buyer.

• Formal approval of the seller (Aufsandungserklärung)

The seller must formally approve the registration of the buyer in the land register. For that purpose, the seller grants consent in the purchase agreement. This consent may also be granted in a separate document. In any case, the agreement must be made in writing and signatures must be certified by a district court or a notary public. These formal requirements are required for registration in the land register.

• Escrow Documentation

A property transaction is usually carried out by way of a trusteeship. In a trusteeship, the contracting party and trustee must conclude a trust agreement with both parties and report and register the acceptance of the trusteeship with the competent bar (notary or lawyer).

• Due diligence

In general, the buyer conducts extensive due diligence to evaluate the purchase price before the sale and purchase agreement is signed. In particular, lease agreements, construction materials, possible contamination of the property and other public legal duties can strongly influence the value of real estate.

The scope of contractually agreed-upon warranties usually depends on the negotiation power of the parties and the type of property being sold. Generally, the seller tends to reduce warranties and representations to a minimum.

Austrian civil law establishes a rebuttable presumption that the purchaser agrees to the assumption of easements. However, that does not apply to the assumption of liens (mortgages). Therefore, unless agreed otherwise, the seller of a real property is obliged to sell the real property free from any encumbrances (Depurierungspflicht).

The parties are legally bound as soon as the parties agreed on the property to be purchased and the purchase price. In fact, an oral agreement can be legally binding. However, as the registration with the land register requires the sale and purchase agreement to be certified by a district court or a notary public, the agreement must be made in writing.

According to the Austrian Civil Code, there are two requirements to be met for the transfer of title: (i) proper title for the transaction (e.g., the sale and purchase agreement) and (ii) registration in the land register. Upon registration of the deed, the ownership of the real estate is transferred to the buyer.

In Austria, the buyer usually pays for the following:

• Legal fees (including costs for the processing of the trusteeship)
• Taxes and stamp duties
• Registration fees

The seller is responsible for the taxes on the profit made on the sale of the real estate.