Run property due diligence in Germany without surprises after closing in 2026

Germany CRE deals carry two numbers that move the model more than buyers from lower-tax markets expect: a Grunderwerbsteuer (RETT) of 3.5-6.5% that varies by Bundesland, and total acquisition costs that regularly hit 10-12% of purchase price. This checklist covers every check before you close in 2026.

Germany's commercial market splits across Frankfurt, Munich, Berlin, Hamburg, Düsseldorf, Cologne, and Stuttgart. Each city operates under its own Bundesland RETT rate and zoning rules.

Buying property in Germany triggers Grunderwerbsteuer from day one. There is no exemption period - it applies on every asset deal regardless of holding structure.

Germany's 2025 Grundsteuer reform means all commercial properties have been reassessed. Buyers must confirm the new assessed value and property tax bill before closing.

Set up an Ellty data room before diligence opens and load all Grundbuch extracts, B-Plan documents, and lease files. Each advisor gets a scoped link from day one.

Where German deals actually go wrong

Not every check carries the same weight. The table below sorts risks by deal impact - dealbreakers first, then what moves the price, then basic hygiene - so your lawyer and notary know what to clear first.

Germany CRE checklist

The table ranked risks by severity. This is the full list to work through, grouped by area.

Title and ownership

• Pull all three sections of the Grundbuch from the Amtsgericht (district court) for the parcel
• Abt. I shows ownership; Abt. II shows encumbrances and restrictions; Abt. III shows mortgages
• Check for Vorkaufsrecht (pre-emption rights) registered in Abt. II before signing
• Confirm the cadastral parcel number (Flurstück) matches all sale, lease, and planning documents
• Check for Dienstbarkeiten (easements) that restrict use or access on the parcel
• Run a bankruptcy search (Insolvenzregister) on the selling entity before committing to the deal

Erbbaurecht - ground lease

• Confirm whether the property is freehold or held under Erbbaurecht (building right)
• Pull the full Erbbaurechtsvertrag; check annual Erbbauzins and review interval
• Confirm the remaining Erbbaurecht term; financing becomes difficult under 25 years remaining
• Check for Heimfall clauses that can trigger a reversion of the building to the landowner
• Confirm whether the Erbbaurecht itself is registered in a separate Grundbuch volume

Zoning - B-Plan and FNP

• Pull the Bebauungsplan (B-Plan) from the municipality; this is the binding zoning document
• Confirm the B-Plan's permitted use class (Nutzungsart) for the specific parcel
• Note that the Flächennutzungsplan (FNP) is only preparatory - don't rely on it for permitted use
• Check for pending B-Plan revision proceedings at the Stadtplanungsamt
• Pull the full Baugenehmigung (building permit) history from the local Baurechtsamt
• Verify the Nutzungsänderungsgenehmigung (use change permit) if the use has changed since original build

Environmental - contaminated sites

• Search the Altlastenverdachtsflächen (contaminated sites register) for the Bundesland
• Commission a Phase I ESA; former East German industrial sites and Ruhrgebiet parcels need extra scope
• Check BBodSchG (Federal Soil Protection Act) liability status; contamination liability transfers on asset deals
• Run a BImSchG (Federal Immission Control Act) check for industrial sites with air/noise permits
• Search for former USTs; petroleum releases are common near older petrol stations and industrial sites
• Budget Phase II soil sampling (EUR 15,000-50,000) if Phase I flags recognized conditions

Leases and tenancies

• Collect all Gewerberaummietverträge (commercial leases) with full amendment history
• Confirm leases exceeding 1 year have been notarized; unnnotarized long-term leases default to 1-year term
• Check German VPI (Verbraucherpreisindex) indexation clauses in all commercial leases
• Review Betriebskostenabrechnung (operating cost statements) against lease terms for 3 years

Give each advisor a scoped link in Ellty. Your lease lawyer sees lease files; your environmental consultant sees Phase I reports; your lender sees financials. Track every file open in real time.

Building and physical condition

• Confirm the Energieausweis (energy certificate) is current; required for all sales and leases in Germany
• Commission a Property Condition Assessment; check facade, roof, and mechanical systems thoroughly
• Pull the full building permit and Baugenehmigung history from the local building authority
• Confirm the Baugenehmigung covers all current uses; unauthorized additions must be legalized
• For pre-1990 buildings: conduct an asbestos survey; German law requires disclosure before transfer
• Check fire safety documentation; non-compliant fire protection is a common post-close surprise

Property tax - 2025 Grundsteuer reform

• Request the 2025 Grundsteuer assessment notice from the seller before signing
• Confirm the new Grundsteuermessbetrag (assessed value) and applicable Hebesatz from the municipality
• Compare the 2025 Grundsteuer bill against the historical bill; increases of 20-50% have been common
• Check whether the new Grundsteuer cost is passed to tenants under the Betriebskosten provisions

RETT and acquisition costs

• Confirm the Bundesland RETT rate: 3.5% (Bavaria, Saxony) to 6.5% (Brandenburg, NRW, Saarland)
• Add notary fees: ~1-1.5% per GNotKG fee schedule
• Add Grundbuch (land register) entry fee: ~0.5%
• Add broker commission: 3.57% per side (incl. 19% VAT) is standard; split is mandatory under 2020 law
• Total acquisition cost: 8-12% of purchase price depending on Bundesland and broker involvement
• For share deals: confirm post-RETT reform rules; structures that avoid RETT must be held 10+ years

Insurance and valuation

• Pull current policies and a 3-year loss run history from the seller
• Check FEMA-equivalent flood zone designation for Rhine, Elbe, Isar, and Danube corridor parcels
• Confirm Elementarschadenversicherung (natural hazard insurance) coverage; not all policies include flood
• Order an independent appraisal by a German-registered Sachverständiger for lender requirements

Utilities and access

• Verify all utility connections are active and include valid supply contracts with the Stadtwerke or provider
• Check for outstanding Erschließungsbeiträge (development contribution fees) owed to the municipality
• Confirm legal road access via public road or a recorded Wegerecht (road easement) in Abt. II
• For industrial sites: confirm BImSchG permit transfer requirements with the Bundesland authority

Seller KYC and AML

• Pull a full Handelsregister extract from the Amtsgericht for the selling entity
• Check the Transparenzregister (UBO register) for all beneficial owners of the seller
• Run an Insolvenzregister (insolvency register) search on the seller before committing
• The notary performs GwG (Money Laundering Act) identity verification and AML checks at closing
• Confirm seller's authority to sell is documented with a current board resolution

How due diligence in Germany works

Step 1 - Title search and RETT modeling

Pull the Grundbuch and model the RETT cost by Bundesland before you bid. Getting the Bundesland RETT rate wrong by even 1% on a EUR 10M deal changes the acquisition cost by EUR 100,000.

Check for Erbbaurecht in Abt. II on the first day. Properties on Erbbaurecht are common in Munich and Hamburg; financing options narrow significantly as the remaining term shortens.

Step 2 - Zoning and planning confirmation

Pull the Bebauungsplan from the Stadtplanungsamt immediately after contract. The B-Plan is the binding document; the FNP only indicates intent - many buyers confuse the two.

For Berlin and former East German cities: check for pending B-Plan revisions. Urban densification programs are actively changing permitted use classes in many inner-city zones.

Step 3 - Leases and income review

Check every long-term commercial lease for notarization. A lease over 1 year without a notarial deed automatically shortens to 12 months under German law - that's a material income risk on an asset deal.

Compare Switzerland's diligence process if you run DACH portfolio acquisitions. Both use Grundbuch title systems with notarial deed requirements, but Germany adds Bundesland-variable RETT and the 2025 Grundsteuer reassessment complexity.

Step 4 - Environmental review

Search the Altlastenverdachtsflächen register for the relevant Bundesland in parallel with the Phase I ESA. Former Ruhrgebiet industrial sites and East German chemical plants carry BBodSchG liability that transfers on asset deals.

Load all Phase I findings, BBodSchG liability analysis, and contaminated sites register results into Ellty. Watermarked links ensure sensitive environmental documents are tracked to every advisor who opens them.

Step 5 - Closing via notary

All German property transfers require a notarial deed. The notary performs AML verification under the GwG, prepares the deed, collects the Grunderwerbsteuer, and registers the transfer at the Grundbuch.

Grundbuch registration after filing typically takes 2-4 weeks. Ownership doesn't transfer legally until the Auflassungsvormerkung (priority notice) is registered - confirm this is in place before releasing purchase funds.

What makes Germany different

The 8-12% total acquisition cost is the number that surprises buyers most. RETT alone is 3.5-6.5%, before notary, land register, and broker fees. Budget the full acquisition cost stack before bidding - it's non-recoverable and not negotiable.

The 2025 Grundsteuer reform has materially changed property tax bills across Germany. All commercial properties were reassessed under new valuations; buyers need to confirm the new annual Grundsteuer amount before closing, not after.

Erbbaurecht appears more often in German CRE than buyers expect. It's common across Munich, Hamburg, and church-owned land in major cities. A property on Erbbaurecht needs a different financing structure and an analysis of remaining term and Erbbauzins review dates.

German commercial lease notarization is the income trap. Leases over 1 year that weren't notarized are legally only 1-year leases. That materially affects income security and asset value - it's not correctable post-close.

Timeline and cost in Germany

Weeks 1-2 cover kickoff: Grundbuch title search, Altlastenverdachtsflächen environmental search, B-Plan confirmation, RETT modeling by Bundesland, notary engagement, and Phase I ESA. Budget EUR 5,000-15,000 for this phase.

Load all files into Ellty before advisors arrive. Give each party a scoped, tracked link from day one - that eliminates 1-2 weeks of email file exchange from a standard German diligence process.

Weeks 2-4 cover deep review: Phase I ESA delivery, PCA, Energieausweis review, lease abstraction, notarization check, 2025 Grundsteuer assessment review, and Betriebskosten audit. Cost runs EUR 8,000-25,000 depending on asset complexity.

Phase II soil sampling adds EUR 15,000-50,000 if Phase I flags recognized conditions. Budget early for Ruhrgebiet industrial parcels, former East German sites, and any site with historical petrol station or dry-cleaning use.

Weeks 4-6 handle resolution: Phase II if needed, title exceptions, B-Plan confirmation, notary deed preparation, and Grundbuch registration filing. Auflassungsvormerkung should register within 2-5 days; full ownership registration takes 2-4 weeks after filing.

Germany's total acquisition cost is the largest closing cost component in European CRE. Model RETT by Bundesland first; it's the single biggest variable in the acquisition cost stack.