Real Estate Glossary by SCANDIC ESTATE

An aerial image is a photograph of a plot taken from the air, e.g., by drone.

• Who is it relevant for? Buyers, sellers.
• Example: An aerial image shows the location of a house.

Ancillary costs are additional expenses to rent, e.g., heating or waste removal.

• Who is it relevant for? Tenants, landlords.
• Example: 150 € monthly ancillary costs.

The annual cold rent is the sum of monthly cold rental payments over a year.

• Who is it relevant for? Landlords, investors.
• Example: 800 € cold rent x 12 = 9,600 € annual cold rent.

An annuity is a regular loan repayment consisting of interest and principal repayment. In an annuity loan, the annuity remains constant, with the interest portion decreasing and the repayment portion increasing, as interest is calculated only on the remaining debt.

• Who is it relevant for? Buyers, investors.
• Example: A monthly annuity of 1,000 € initially includes 800 € interest and 200 € repayment, later 600 € interest and 400 € repayment.

An annuity loan is the most common form of real estate financing. The monthly payment (annuity) remains constant, while the interest portion decreases and the repayment portion increases. It provides planning certainty with a fixed interest rate and term.

• Who is it relevant for? Buyers, investors.
• Example: For a 200,000 € loan with 2% interest and 1% repayment, the annuity is 500 € monthly.

The appraised value is the value of a property determined by an appraiser.

• Who is it relevant for? Buyers, sellers.
• Example: A house is appraised at 300,000 €.

The attic is the uppermost part of a building under the roof, used as living or storage space. Sloped ceilings may limit usage.

• Who is it relevant for? Buyers, tenants.
• Example: An attic apartment with sloped walls.

The basement is the underground part of a building, used as storage or living space.

• Who is it relevant for? Buyers, tenants.
• Example: A converted basement as a hobby room.

A broker mediates real estate transactions and receives a commission for it.

• Who is it relevant for? All target groups.
• Example: A broker sells an apartment for 300,000 €.

A building encumbrance is a public-law obligation of a plot owner, such as tolerating utility lines or refraining from construction. It is registered in the encumbrance register.

• Who is it relevant for? Buyers, sellers.
• Example: A neighbor has the right to lay a water pipe across the plot.

The building encumbrance register is a record maintained by the building supervisory authority listing all encumbrances on a plot. It ensures transparency during purchase.

• Who is it relevant for? Buyers, sellers, professionals.
• Example: A buyer checks before purchase whether encumbrances are registered.

Building land (or construction plot) is an area legally and physically suitable for construction. It is designated as a building area in a development or land use plan and is often connected to utilities.

• Who is it relevant for? Buyers, investors.
• Example: A plot in a residential area with water supply connection.

A building permit is official approval to implement a construction project. It confirms compliance with public-law regulations and is issued based on construction documents.

• Who is it relevant for? Buyers, investors, builders.
• Example: The building authority approves the construction of a single-family home.

The buyer’s commission is the portion of the broker’s fee paid by the buyer.

• Who is it relevant for? Buyers.
• Example: 10,000 € commission for a 200,000 € purchase.

A carport is an open, covered parking solution for vehicles. It offers weather protection, is cheaper than a garage, and is often easier to obtain approval for.

• Who is it relevant for? Buyers, tenants.
• Example: A wooden carport next to a single-family home.

The certificate of separation is an official document confirming that an apartment or part of a building is structurally separated from other units. It is issued by the building supervisory authority and is a prerequisite for registering an apartment as property in the land register. Without this document, an apartment cannot be sold or rented as an independent unit. It is based on a division plan that shows spatial boundaries.

• Who is it relevant for? Buyers and sellers of apartments, investors.
• Example: An apartment in a multi-family building receives the certificate if it has a separate entrance and independent utilities.

Commercial properties are used for business purposes, such as offices or shops, and are subject to different regulations than residential properties.

• Who is it relevant for? Investors, landlords.
• Example: A shop in the city center.

Commission is the broker’s fee for mediating a real estate transaction. It is calculated as a percentage of the purchase or rental price and can be borne by the buyer, seller, or both.

• Who is it relevant for? Buyers, sellers.
• Example: For a purchase price of 200,000 €, a 5% commission is 10,000 €.

Common property includes parts of a building owned by all owners in a residential complex, such as the roof or facade.

• Who is it relevant for? Buyers, owners.
• Example: The staircase in a multi-family building.

Completion marks the end of a construction project when the property is ready for occupancy and accepted.

• Who is it relevant for? Buyers, builders.
• Example: A house is completed after two years of construction.

A condominium is an independent apartment with individual ownership and a share in common property (e.g., staircase).

• Who is it relevant for? Buyers, investors.
• Example: An 80 m² apartment in a multi-family building.

The Condominium Act regulates rights and obligations in owners’ communities.

• Who is it relevant for? Owners.
• Example: The Act specifies the management of common property.

Construction documents, such as site plans and building drawings, are submitted with a building application. They are reviewed by the building authority and governed by state building regulations.

• Who is it relevant for? Builders, professionals.
• Example: An architect submits plans for a new house.

Conversion alters a property’s structure, e.g., by adding new walls.

• Who is it relevant for? Owners, investors.
• Example: An attic is converted into living space.

The conveyance is a notarized agreement between buyer and seller regarding the transfer of property ownership. It includes the purchase contract and the transfer of ownership. The preliminary conveyance note is a land register entry that protects the buyer by blocking further actions by the seller with the property.

• Who is it relevant for? Buyers, sellers, professionals.
• Example: After contract conclusion, a preliminary conveyance note is entered until the buyer is registered in the land register.

Core renovation is a comprehensive refurbishment where only the basic structure remains.

• Who is it relevant for? Buyers, investors.
• Example: New utilities and walls in an old building.

Defects are deviations of a property from the agreed condition, e.g., construction flaws.

• Who is it relevant for? Buyers, tenants.
• Example: A leaking roof after purchase.

Demolition is the removal of construction structures, e.g., for new development.

• Who is it relevant for? Owners, investors.
• Example: Demolition of an old shed.

A deposit is a tenant’s security payment, usually two to three months’ rent, covering damage or non-payment.

• Who is it relevant for? Tenants, landlords.
• Example: A 1,500 € deposit for a 500 € apartment.

Depreciation (AfA, wear and tear) is a tax term describing the reduction in value of assets, such as buildings, over their useful life. For real estate, it applies only to the building, as land is not subject to wear. The calculation is based on acquisition costs and the useful life set by tax authorities (e.g., 50 years for residential buildings). Depreciation reduces taxable profit.

• Who is it relevant for? Landlords, investors, tax consultants.
• Example: A building costs 200,000 € (excluding land value). With a 50-year useful life, 4,000 € can be depreciated annually.

Disagio is a discount on the loan amount deducted upon disbursement. It acts as a prepayment of interest and can be tax-advantageous.

• Who is it relevant for? Buyers, investors.
• Example: For a 100,000 € loan with a 5% disagio, 95,000 € is disbursed.

The division declaration divides a building into individual and common ownership.

• Who is it relevant for? Buyers, owners.
• Example: A document specifies shares for six apartments.

Dry construction uses prefabricated elements (e.g., drywall) for interiors.

• Who is it relevant for? Builders, professionals.
• Example: Partition walls in an apartment.

An easement is a property right allowing the use of another’s plot, such as a right of way. It is registered in the land register.

• Who is it relevant for? Buyers, sellers.
• Example: A neighbor has the right to pass through the plot to reach the road.

The energy certificate provides information about a building’s energy consumption and is mandatory for sales or rentals. It helps assess energy costs.

• Who is it relevant for? Buyers, tenants, landlords.
• Example: A certificate shows an annual consumption of 120 kWh/m².

Equity is the portion of the purchase price financed by the buyer’s own funds. It improves loan conditions and reduces risks.

• Who is it relevant for? Buyers.
• Example: 50,000 € equity for a 300,000 € purchase.

Erbpacht is a long-term right to use a plot against an erbpacht fee. The erbpacht holder can build but does not own the land.

• Who is it relevant for? Buyers, investors.
• Example: A 99-year contract with an annual erbpacht fee of 500 €.

The external commission is the broker’s fee paid by the buyer. It amounts to 3.57% to 7.14% of the purchase price (including VAT), depending on the federal state. Since 2020, the rule applies: in dual activities, buyer and seller share costs; in exclusivity, the commissioning party pays but may be reimbursed up to 50%.

• Who is it relevant for? Buyers, sellers.
• Example: For a 300,000 € purchase price in Bavaria (7.14%), the external commission is 21,420 €.

Extraordinary termination allows immediate termination of a rental agreement for significant reasons, such as health hazards from the property’s condition (for tenants) or payment arrears exceeding two months (for landlords). A warning is usually required.

• Who is it relevant for? Tenants, landlords.
• Example: A landlord terminates immediately if rent is unpaid for two months.

Financing involves raising funds for a real estate purchase, such as through equity, loans, or subsidies.

• Who is it relevant for? Buyers, investors.
• Example: A buyer combines 20% equity with a bank loan.

A forced auction is the judicial sale of a property to settle debts.

• Who is it relevant for? Buyers, investors.
• Example: A house is auctioned for 200,000 €.

Full financing covers the entire purchase price without equity.

• Who is it relevant for? Buyers.
• Example: A 300,000 € purchase is fully financed.

A guarantee is a voluntary assurance, e.g., by a builder, that a structure will meet certain characteristics for a period.

• Who is it relevant for? Buyers, builders.
• Example: A 5-year guarantee on a roof.

Heating costs are expenses for heating a property and can be passed on to tenants.

• Who is it relevant for? Tenants, landlords.
• Example: 100 € monthly heating costs for gas heating.

House money is the monthly contribution by owners in a condominium community for operating costs and reserves.

• Who is it relevant for? Buyers, owners.
• Example: 200 € monthly house money for heating and management.

Individual ownership is the exclusive part of a condominium, e.g., the apartment itself.

• Who is it relevant for? Buyers, owners.
• Example: An apartment within a building.

An installment or repayment loan is a form of credit where the borrower repays the loan in equal installments. The installment consists of a fixed principal repayment portion and a decreasing interest portion, as interest is calculated only on the remaining debt. As a result, the overall financial burden decreases over time.

• Advantages: Decreasing interest burden.
• Disadvantages: High initial costs.
• Who is it relevant for? Buyers financing real estate.
• Example: For a 100,000 € loan with 2,000 € annual repayment and 2% interest, the monthly installment decreases over time.

The interest rate is the percentage at which interest is calculated on a loan.

• Who is it relevant for? Buyers, investors.
• Example: A loan with a 2% interest rate.

Interim financing bridges short-term liquidity gaps, e.g., until a property sale.

• Who is it relevant for? Buyers.
• Example: A 50,000 € loan for three months.

Land awaiting development refers to areas that are not currently building land but, due to their location, could be used for construction in the future. It is cheaper than building land and attractive to investors.

• Who is it relevant for? Investors.
• Example: A field near a city that may soon be included in a development plan.

The land register is a public record documenting property ownership and encumbrances.

• Who is it relevant for? Buyers, sellers, professionals.
• Example: A land register extract shows a registered mortgage.

The land use plan determines the intended use of a municipality’s areas (e.g., residential, commercial zones) and serves as the basis for development plans.

• Who is it relevant for? Investors, professionals.
• Example: A plan designates an area as a residential building zone.

A lease is the granting of use of an object for a fee, often with income generation.

• Who is it relevant for? Lessees, landlords.
• Example: Lease of an agricultural plot.

A legal entity is an organization that can act legally like a natural person, e.g., as an owner.

• Who is it relevant for? Investors, professionals.
• Example: A GmbH buys an office building.

Lending is the provision of a loan against collateral (usually real estate). The loan value is the sustainably achievable value of the property, lower than the market value, to protect the lender.

• Who is it relevant for? Buyers, investors.
• Example: A property with a market value of 300,000 € has a loan value of 250,000 €.

A lien secures a claim, e.g., through a mortgage or hypothec.

• Who is it relevant for? Buyers, investors.
• Example: A mortgage as a lien.

A life annuity is a payment received by an owner for transferring their property, often with the right to reside.

• Who is it relevant for? Sellers, investors.
• Example: A retiree receives 500 € monthly for life.

Living space is the usable floor area of an apartment, calculated per the living space ordinance.

• Who is it relevant for? Buyers, tenants.
• Example: An apartment has a living space of 90 m².

The loan agreement regulates the terms of a loan between lender and borrower, such as interest rate, term, and collateral.

• Who is it relevant for? Buyers, investors.
• Example: A contract for a 150,000 € loan with a 10-year term.

The loan limit is the maximum loan amount a lender grants based on the loan value, e.g., 60% for mortgage banks.

• Who is it relevant for? Buyers, investors.
• Example: For a loan value of 250,000 €, the limit is 150,000 €.

Maintenance includes measures to preserve a property’s condition, such as repairs.

• Who is it relevant for? Owners, landlords.
• Example: Painting a facade every 10 years.

The maintenance reserve is a financial fund for future repairs in an owners’ community.

• Who is it relevant for? Owners.
• Example: 1,000 € annual reserve per apartment.

Management includes the organization and care of a property.

• Who is it relevant for? Owners, landlords.
• Example: A manager handles operating costs.

Market value is the current value of a property on the market.

• Who is it relevant for? Buyers, sellers.
• Example: A house has a market value of 350,000 €.

A monument-protected property is protected due to its historical or cultural value. Changes require approval from the monument protection authority.

• Who is it relevant for? Buyers, investors.
• Example: An 18th-century mansion with restoration requirements.

A mortgage is a lien on a property to secure a loan, which ceases upon repayment of the debt.

• Who is it relevant for? Buyers, investors.
• Example: A mortgage of 150,000 € for a house.

A mortgage is a lien in the land register that gives the creditor priority in realizing the property.

• Who is it relevant for? Buyers, investors.
• Example: A bank secures a loan with a mortgage.

A multi-family house has three or more residential units.

• Who is it relevant for? Investors, landlords.
• Example: A house with six rental apartments.

Neighbor law regulates rights and obligations between plot owners, e.g., setback distances.

• Who is it relevant for? Buyers, owners.
• Example: A minimum distance of 3 meters to the neighboring plot.

The notary authenticates real estate contracts and ensures their registration in the land register.

• Who is it relevant for? Buyers, sellers.
• Example: A notary certifies a purchase contract.

An object is a specific property, such as a house or apartment.

• Who is it relevant for? All target groups.
• Example: A single-family house as a purchase object.

An old building is a structure built before World War II (approximately until 1945). Characteristics include wooden beam ceilings, box windows, brick walls, and often high ceilings with stucco. From 1949, new buildings with concrete walls and modern windows became prevalent. Old buildings have charm but may be more expensive to maintain.

• Who is it relevant for? Buyers, tenants, investors.
• Example: A house built in 1920 with original wooden windows is considered an old building.

Open real estate funds invest in properties, with shares that can be traded at any time.

• Who is it relevant for? Investors.
• Example: A fund with office buildings.

Open spaces are undeveloped plot areas that can be used, for example, as a garden or parking lot.

• Who is it relevant for? Buyers, tenants.
• Example: A 200 m² garden next to a house.

Operating costs are ongoing expenses for property management, such as property tax, heating, or waste removal. They can be passed on to tenants per the operating costs ordinance, but do not include administrative or maintenance costs.

• Who is it relevant for? Landlords, tenants.
• Example: Street cleaning costs are passed on to the tenant.

In an option purchase, the tenant has the possibility to buy the property later.

• Who is it relevant for? Tenants, landlords.
• Example: A tenant receives a preemptive purchase right.

Ownership is the comprehensive right to a thing, such as real estate, to use it at will, provided there are no legal restrictions.

• Who is it relevant for? Buyers, sellers.
• Example: Ownership of a house including the plot.

A parcel is a demarcated plot registered in the cadastre.

• Who is it relevant for? Buyers, professionals.
• Example: A 500 m² parcel.

Payment default occurs when payments, such as rent, are not made on time.

• Who is it relevant for? Tenants, landlords.
• Example: Two months of untimely rent.

Photovoltaics converts sunlight into electricity and is often installed on roofs.

• Who is it relevant for? Buyers, investors.
• Example: A solar system on a house roof.

The preemptive purchase right allows purchasing a property on the same terms as a third party.

• Who is it relevant for? Buyers, tenants.
• Example: A tenant has a preemptive right upon sale.

Property acquisition tax is paid by the buyer upon purchasing real estate and ranges from 3.5% to 6.5% of the purchase price, depending on the federal state.

• Who is it relevant for? Buyers.
• Example: For a 300,000 € purchase price in Berlin: 18,000 € tax (6%).

The property manager handles maintenance and care of a property, such as repairs or cleaning.

• Who is it relevant for? Landlords, owners.
• Example: A property manager cleans the staircase weekly.

A qualified rent index is a recognized document for determining local comparative rent.

• Who is it relevant for? Tenants, landlords.
• Example: An index shows 10 €/m² as standard.

The quota payment is paid by employers not hiring disabled persons, relevant for accessible commercial properties.

• Who is it relevant for? Investors, landlords.
• Example: A company pays for lacking accessible spaces.

Ready-to-build land is an undeveloped, fully serviced plot ready for immediate construction, such as in building zones or as a building gap.

• Who is it relevant for? Buyers, investors.
• Example: A plot with road access and sewage connection.

Real estate is immovable property, such as a plot or building.

• Who is it relevant for? All target groups.
• Example: A single-family house with a garden.

A real estate agent mediates real estate transactions between buyers and sellers or tenants and landlords for a commission.

• Who is it relevant for? Buyers, sellers, tenants, landlords.
• Example: An agent sells a house and receives a 5% commission.

Real estate financing describes raising funds for a purchase, e.g., through loans and equity.

• Who is it relevant for? Buyers, investors.
• Example: A loan for 80% of the purchase price.

Real estate valuation determines the market value of a property, e.g., through comparison or income methods.

• Who is it relevant for? Buyers, sellers, investors.
• Example: An appraiser values a house at 250,000 €.

Real property is a property or plot registered in the land register.

• Who is it relevant for? Buyers, sellers.
• Example: A registered plot with a house.

Redistribution reorganizes plots to improve their use.

• Who is it relevant for? Owners, professionals.
• Example: Two plots are merged.

Refurbishment is the comprehensive repair of a property, often with energy efficiency improvements.

• Who is it relevant for? Buyers, investors.
• Example: New windows and insulation in an old building.

Remaining debt is the outstanding loan amount after repayments.

• Who is it relevant for? Buyers, investors.
• Example: After 5 years, a remaining debt of 180,000 € remains.

Renovation includes minor improvements to a property, e.g., painting.

• Who is it relevant for? Owners, landlords.
• Example: New floors in an apartment.

Rent is the payment for the use of a property.

• Who is it relevant for? Tenants, landlords.
• Example: 700 € monthly cold rent.

The rent cap limits rent increases for new tenancies in certain areas.

• Who is it relevant for? Tenants, landlords.
• Example: Rent must not exceed the local comparative rent.

The rental agreement regulates the terms of tenancy, e.g., rent and duration.

• Who is it relevant for? Tenants, landlords.
• Example: A contract for an apartment with 600 € rent.

Repayment is the return of a loan, usually in installments.

• Who is it relevant for? Buyers, investors.
• Example: 2% repayment of a 200,000 € loan = 4,000 € annually.

The residence right allows the use of a property without ownership.

• Who is it relevant for? Sellers, heirs.
• Example: A parent continues living after transferring ownership.

Return is the profit from a real estate investment, e.g., from rent or value increase.

• Who is it relevant for? Investors.
• Example: An annual return of 4% from rental income.

Security transfer serves as a loan guarantee by transferring assets.

• Who is it relevant for? Buyers, investors.
• Example: A car is transferred as security.

The site plan shows the position of a structure on a plot and is part of the construction documents.

• Who is it relevant for? Builders, professionals.
• Example: A plan with a house and access road.

Social housing creates affordable housing with government support.

• Who is it relevant for? Investors, tenants.
• Example: An apartment with capped rent.

Subsidies are government grants or favorable loans for construction or renovation projects, such as for energy efficiency.

• Who is it relevant for? Buyers, investors.
• Example: A KfW grant for a new heating system.

Tenancy is the provision of a property for rent.

• Who is it relevant for? Landlords, tenants.
• Example: An apartment is rented for 800 €.

Tenant protection includes legal regulations to protect tenants, e.g., from terminations.

• Who is it relevant for? Tenants, landlords.
• Example: A three-month termination notice period.

The termination notice period is the time between notification and the end of a rental agreement, usually three months.

• Who is it relevant for? Tenants, landlords.
• Example: A tenant notifies termination on March 31 with a period until December 31.

A trustee manages assets on behalf of another party, e.g., purchase prices.

• Who is it relevant for? Buyers, sellers.
• Example: A notary as trustee for the purchase price.

Upkeep is the ongoing costs for maintaining a property.

• Who is it relevant for? Owners, landlords.
• Example: Annual heating maintenance.

Urbanization describes city growth and increased demand for urban housing.

• Who is it relevant for? Investors.
• Example: More apartments in metropolises.

Usufruct allows the use of a property without ownership, e.g., living or generating income.

• Who is it relevant for? Sellers, heirs.
• Example: A parent retains the right to reside after gifting.

Valuation determines a property’s value using recognized methods.

• Who is it relevant for? Buyers, sellers.
• Example: An appraisal yields a value of 280,000 €.

Xenophobia is aversion to foreigners, which may manifest in property allocation (legally prohibited).

• Who is it relevant for? Tenants, landlords.
• Example: Discrimination in housing allocation.

A yacht marina is a facility for boats; nearby properties are often valuable.

• Who is it relevant for? Buyers, investors.
• Example: A house near a yacht marina costs 500,000 €.