After the award: payment, interest, taxes and the risks you take on
With the award you become owner – but the cash bid soon falls due (plus 4% interest), and you take on tenants, surviving rights and outstanding service charges.
The award (Zuschlag) has been granted – congratulations, you are the owner. From here, though, things quickly become concrete: payment, taxes and a few risks that many first-time bidders underestimate.
Paying the cash bid – with 4% interest
The cash bid (your bid, less the security you provided) is payable by the distribution hearing (§ 49(1) ZVG). This hearing typically takes place roughly 4 to 8 weeks after the award. From the moment of the award, the cash bid bears interest (§ 49(2) ZVG) – in practice at 4% per year (the specific rate follows from settled court practice, not from the wording of the statute itself). If you are funding the purchase price through a bank, you should arrange the financing before the hearing – see Financing a compulsory auction.
Additional costs
On top of the bid, you pay:
- Property transfer tax. The assessment basis is the highest bid including the surviving rights (§ 9(1) no. 4 GrEStG). The tax rate depends on the federal state (3.5%–6.5%).
- Court costs for the award (award fee under the GKG).
- Land-register costs for your registration.
Notary or estate-agent fees, by contrast, do not apply.
No warranty, no enforceable interior viewing
The court is not liable for material or legal defects: "No claim for warranty arises" (§ 56 ZVG). With the award, the risk of accidental loss and the benefits also pass to you. A viewing of the interior is generally not enforceable – so you buy with residual uncertainty about the condition. The best time to check these risks is before you bid: first using the risk class for the shortlist, then with the property check in detail.
You take on tenants – and can give notice only in a limited way
If the property is let, the tenancies continue (sale does not break a lease). The award decision is an eviction title only against the debtor, not against tenants. You do, however, have a special right of termination (§ 57a ZVG): you may give notice within the statutory period – but only for the first permissible date. If you miss it, the special right of termination lapses.
Surviving vs. extinguished rights
With the award, all rights to the property that do not expressly survive under the auction conditions are, as a rule, extinguished (§ 91 ZVG). What survives, by contrast, are the rights taken into account in the lowest bid (§ 52 ZVG) – for example a right of residence or an easement in section II of the land register. You must take on such encumbrances – so read the auction conditions carefully.
Condominium: outstanding service charges
For condominiums, the owners' association has a priority right for outstanding service charges (§ 10(1) no. 2 ZVG): this covers current amounts as well as arrears from the year of seizure and the last two years, capped at a maximum of 5% of the market value. These amounts may therefore come on top for you.
In brief
- Cash bid due in 4–8 weeks, 4% interest from the award.
- Plus property transfer tax + land-register/court costs.
- No warranty, condition at your own risk.
- Tenants stay (§ 57a: first deadline only!), rights of residence/easements may survive.
- Condominium: outstanding service charges of up to 5% of the market value are possible.
Note: General orientation, not legal advice. Particularly with surviving rights and let properties, expert advice in the individual case is worthwhile.