Our offerings for the real estate industry

The Broker and Builder Regulations (MaBV) are regulations derived from the Trade Regulation Act (Gewerbeordnung – GewO) which above all lays down rules in German trade law to protect real estate buyers when drafting and concluding a construction contract.

The focus of the MaBV is safeguarding customers’ monies (sections 2-4 MaBV). Under section 3(1) MaBV, a commercial developer only has a right to take payment from a buyer if: 

  • there is a valid contract,
  • a priority notice of conveyance has been entered in the land register with the agreed priority,
  • it has been assured that the property is free from liens (exemption from mortgage rights) and
  • an official building permit has been issued.
     

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Susanne Kauermann
Susanne Kauermann
Partner
Duesseldorf
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Bernd Hoffmann
Bernd Hoffmann
Partner
Duesseldorf
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    Understanding and correctly applying MaBV

    The monies taken in from the buyer are to be safeguarded accordingly and only to be used for the project in question. The developer is only to take payments according to the progress of construction. A strict separation is to be made here under section 6 MaBV between the customer’s monies received and the developer’s personal funds. If these conditions are not met, there is the possibility under section 7 MaBV to provide the customer with a surety. This is to serve as security to ensure performance and the client’s claims to restitution or repayment of the assets they have contributed. The MaBV do not guarantee that construction will be completed under a surety. If the buyer has already made payments although the building has not yet been completed, the MaBV provide for them to be staggered based on certain phases of construction. 

    Agreements between the builder and real estate buyer are not valid under section 12 MaBV if they deviate from the regulations of the MaBV. This means that notaries involved are also obliged to follow the MaBV and may not notarise documents that deviate.

    Audits under the German Broker and Builder Regulations (MaBV)

    Traders carrying on the activities given in section 34c(1) of the Industrial Code (GewO) (i.e. real estate agents, builders, construction consultants) are subject to the ordinance concerning the MaBV obligations. Under this they are obliged by section 16(1) MaBV to have their compliance with the obligations of sections 2-14 MaBV audited by an auditor (German Certified Auditor, sworn auditor) for every calendar year at their own cost.  This audit under section 16 MaBV is an audit of legal conformity aimed at compliance with sections 2-14 MaBV. The audit period is the calendar year (even if the trader has a different financial year). The report on the audit is to be submitted to the authority by 31 December of the following year at the latest. Audits under 16(2) MaBV are a statutory duty reserved for auditors and are required to be sealed.