DTZ - Investor Guide Europe

PROPERTY LAW

Types of ownership

Sole ownership (Alleineigentum)

• The sole owner (legal entity or natural person) has full control

of the land and any buildings on it. This includes in particular

the right to use the land and its buildings in the most absolute

manner, the right to receive the benefits of it, as well as the

right to encumber (e.g. easements, mortgages etc.) and the

right to dispose.

Co-ownership (Miteigentum)

• According to the Austrian Civil Code (Allgemeines

Bürgerliches Gesetzbuch) the ownership right to a real

estate may be divided between two or more persons, the

co-owners (Miteigentümer). While the real property itself

remains undivided, the right to own such land is divided. Each

co-owner is entitled to separately dispose of its share of land

but it needs all co-owners to dispose of the entire property.

Co-ownership is e.g. the result of a joint purchase or a shared

inheritance.

Condominium ownership (Wohnungseigentum)

• Under the Austrian Condominium Act

(Wohnungseigentumsgesetz), condominium ownership is the

right in rem of a co-owner to exclusively use and dispose of a

self-contained unit in a building (such as an apartment, other

self-contained premises or a parking lot). The condominium

ownership consists of an absolute ownership with regards

to the self-contained unit and a proportional joint ownership

with regards to common areas (such as staircases).

Building on third party land (Superädifikat)

• The Austrian Civil Code foresees that the owner of a real

estate is also the owner of the building erected thereon

(“superficies solo cedit”). There are two excep-tions to

this rule: the building right (Baurecht – see below) and the

building on third party land (Superädifikat). The Superädifikat

is a building constructed on a property with the intention

that it shall not remain there (oftentimes such building is not

connected to the ground). To this end, the owner of the future

Superädifikat concludes a lease agreement with the owner of

the property and subsequently constructs the Superädifikat

thereon. While usually buildings are not registered in the

land register, a Superädifikat may be registered with the land

erected on.

Building right (Baurecht)

• In accordance with the Austrian Building Right Act

(Baurechtsgesetz), land may be encumbered with the

transferable and inheritable right of one or more persons to

construct (permanent) buildings on or beneath the surface

of a certain piece of land. Such building rights are granted for

long terms between 10 and 100 years. Usually the beneficiary

of the building right has to pay a ground rent (Bauzins) to

the owner of the land. The owner of the land becomes the

owner of the building(s) and is obliged to pay compensation

to the beneficiary of the building right upon termination of the

building right unless otherwise agreed.

Rights affecting ownership

Mortgages (Hypotheken)

• There are two types of mortgages, the conventional fixed

amount mortgage (Festbetragshypothek) and the maximum

amount mortgage (Höchstbetragshypothek). The fixed

amount mortgage is a pledge of real estate and is created by

a written mortgage agreement including possible ancillary

costs, interest etc. that must be registered in the land register.

Alternatively, the registration of a mortgage is possible for

a certain ceiling amount of money. Such maximum amount

mortgage provides security for any existing claims and those

arising in the future out of a specific business relationship

up to the agreed maxi-mum amount. A lien on real estate

emerges following registration in the land register which each

district court maintains for a property located in that area.

The mortgage agreement has to be drawn up in writing and

the signatures of the par-ties to the contract have to be duly

notarised by a notary or a court to allow an entry in the land

Easements (Dienstbarkeiten, Servitute)

• Real easements (Grunddienstbarkeiten) must be

distinguished from personal easements (persönliche

Dienstbarkeit). A real easement is appurtenant to a certain

real estate (the dominant real estate) granting its owner the

right of use over another real estate or the right to demand

that certain activities or rights are not exercised on the other

plot of land (e.g. right of way). Personal easements entitle a

certain person to use the encumbered property for certain

purposes, e.g. the right of usufruct (Fruchtgenussrecht),

enabling the beneficiary to derive profit or benefit from a

property or the right of abode (Wohnungsrecht). In general,

no specific form is required for easement agreements. If they

will be registered in the land register – in order to become a

right in rem and thereby effective vis-à-vis any third party –

the signatures have to be certified by a notary public.

• Conveying rights to recurrent payments or services

(Reallasten) are granting a right to recurring payments or

services to the beneficiary.

• Right of pre-emption (Vorkaufsrechte)

• Right of repurchase (Wiederkaufsrechte)

• Right of resale (Rückverkaufsrecht)

• Prohibition of sale and encumbrance (Veräußerungs – und

Belastungsverbot).

ACQUISITION PROCESS:

KEY STAGES

Types of Transactions

• Real property can be acquired by purchase of title to the asset

itself (asset deal) or by purchase of shares (share deal). There

is an appreciable difference between share deal and asset

deal with regard to taxation issues as well as with regard to

liability. Whereas the acquisition of real estate in the course

of an asset deal is definitely liable to real estate transfer tax

in the amount of (generally) 3.5 % and a registration fee of

1.1 % of the purchase price, the acquisition via share deal can

Investors Guide to Europe 2015