The corona pandemic may have put transactions on hold for thousands of pending property deals, but the laws on opening still do permit the visit to the notary for the compulsory official closing and certification, which has traditionally required the physical presence of the parties and the verbal reciting of the terms of the deal.
While meeting and consultation appointments with the notary can already be made by telephone or video as the law stands, the signature - if necessary subsequently, if one of the parties has been officially represented - must be made by hand in front of the notary (the so-called qualified written form).
There has been a certain relaxation of this ritual as a result of corona, which has made many such appointments cumbersome. But now Germany’s real estate industry is gearing up for digital notary contracts.
Leading the drive is the real estate portal Immowelt and the real estate association IVD, who have organized a petition to champion digital notarization of contracts.
In a letter to the Federal Ministries of the Interior and Justice, the IVD and Immowelt demand that virtual certification should become part of the measures to cushion the effects of the coronavirus. For the petition to be heard in the Bundestag, the Lower House, it needs 50,000 signatures.
Immowelt and IVD say that digital notary contracts should also be valid for real estate purchases in the period after the corona crisis, for which new legal prerequisites are needed. Prof. Dr. Cai-Nicolas Ziegler, CEO of Immowelt AG, said that apartment viewings via live stream, such as Immowelt already off, are a start. Then, digital notary appointments must be the next step in reforming the real estate industry for the future. IVD President Jürgen Michael Schick added that, in its current state, notarial certification already needs an overhaul to be fit for purpose.
The IVD president said the German notarial system offers buyers and sellers, investors and owner-occupiers a high degree of security - which would "in no way be restricted" by the switch to digital notarial contracts. The notary's educational and warning function can also be fully maintained, he said, through a differentiated design of digital notarisation. "By means of video telephony, RFID-supported identification documents and high-security encryption technologies, the notary's contract could already be handled in a legally secure and digital manner," said Schick persuasively.
At the end of March, the Berlin Chamber of Notaries (Notarkammer) had already relaxed the restrictive rules on notarial certification - in particular the principle of the personal presence of the parties involved. Notarisations by means of a representative without power of representation are expressly possible during the Corona crisis, even without justified exceptional cases, which we reported on recently in REFIRE from Berlin law firm Bottermann Khorrami. However, the parties to the contract must then subsequently – and this can take place outside the notary’s offices - execute their signature before the notary in order to approve the contract. The law firm uses the already existing legal possibilities of digitalisation: For example, the clients can be connected to the notarisation negotiations via video conference if they wish and – as they would normally - ask questions directly during the reading of the deeds.
Germany’s Federal Statistics Office had already presented a general project report in December last year on the digital processing of real estate purchase contracts on behalf of the Federal Government, the National Council for the Supervision of Standardization and the Federal Chamber of Notaries. It’s a small step, but it feels like progress.
