Investment Apartments in Germany — High Court Ruling on Rent Pool and other Guarantees
March 16th, 2008 by berlinportfolio
A vendor of investment property with a rent pool has to state all costs and risks likely to be incurred by the investor.
Background:
The vendor buys and renovates apartment blocks to divide them into condos and sell those individually. An investor (the plaintiff) bought such a property and joined the rent pool. He demands the contract to be reverted and the purchase price plus damage to be paid back. He claims incomplete and wrong information in the sales process.
As a reaction many vendors working with such a system have tried to solve the problem by providing a guarantee. The intention is to picture a higher value than the actual value at the time of the offer and thus demanding a price higher than the current actual value.
Recommendation:
Do not let guarantees deflect you from inspecting all aspects of the apartment you are actually buying!
The full court ruling and a check list of questions to ask and what to look out for can be found on Properties in Berlin.
Uwe Falkenberg the author is a Berliner and active in the German property market for more than 25 years. Experienced as project manager, developer and head of the German Business for a UK based property consultancy he now owns and operates Berlin Portfolio Ltd His international background and local expertise is an ideal combination for an international investor.
He offers “Health Checks” and problem solving for non or not as good performing properties as promised at the outset. This includes “forensic” review of the information provided at the purchase and review of the performance of the property management - all in English!
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