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Appraisal Contingency Addendum for Germany

Appraisal Contingency Addendum Template for Germany

A German law-governed Appraisal Contingency Addendum is a supplementary legal document to a real estate purchase agreement that provides protection for buyers by making the purchase contingent upon the property appraising at or above the agreed purchase price. The document follows German property law requirements and incorporates standards set by the ImmoWertV (Real Estate Valuation Ordinance). It outlines specific conditions under which the buyer may renegotiate or withdraw from the purchase agreement based on the appraisal results, while defining timelines, procedures, and rights of all parties involved in accordance with German civil law principles.

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What is a Appraisal Contingency Addendum?

The Appraisal Contingency Addendum is a critical document in German real estate transactions where buyers seek protection against overpaying for property or ensuring mortgage financing viability. This document is typically used when there's uncertainty about a property's market value or when mortgage financing is required. The addendum must comply with German property law, particularly the BGB (German Civil Code) and ImmoWertV (Real Estate Valuation Ordinance). It details the appraisal process, timelines, and consequences if the property doesn't appraise at the purchase price. This document is especially relevant in fluctuating markets or for unique properties where market value determination is crucial. The Appraisal Contingency Addendum provides a structured framework for handling situations where appraisal results affect the transaction's viability, protecting both buyers' and sellers' interests while ensuring compliance with German legal requirements.

What sections should be included in a Appraisal Contingency Addendum?

1. Parties: Identification of the buyer, seller, and any other relevant parties to the agreement

2. Background: Reference to the main purchase agreement and context for this addendum

3. Definitions: Key terms used in the addendum including 'Appraisal', 'Appraised Value', 'Purchase Price', and 'Contingency Period'

4. Appraisal Requirement: Details of the required appraisal, including who will conduct it and the standards to be followed under ImmoWertV

5. Contingency Terms: Specific conditions that must be met regarding the property's appraised value

6. Rights and Obligations: Actions available to parties if the appraisal comes in below the purchase price

7. Timeline: Deadlines for obtaining the appraisal and exercising rights under the contingency

8. Notice Requirements: Process for communicating appraisal results and decisions between parties

9. Termination Provisions: Conditions and process for terminating the purchase agreement under this contingency

10. Earnest Money Disposition: Handling of earnest money in case of termination under this contingency

11. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction

What sections are optional to include in a Appraisal Contingency Addendum?

1. Renegotiation Process: Optional section detailing the process for price renegotiation if the appraisal comes in low - used when parties want to pre-agree to negotiation procedures

2. Secondary Appraisal: Provisions for obtaining a second appraisal if the first is disputed - included when parties want this additional safeguard

3. Financing Coordination: Coordination with mortgage financing requirements - included when buyer is obtaining bank financing

4. Cost Allocation: Detailed breakdown of who pays for appraisal costs in various scenarios - used when standard cost allocation needs modification

5. Property Access: Specific terms for appraiser access to the property - included for properties with special access requirements or restrictions

What schedules should be included in a Appraisal Contingency Addendum?

1. Schedule A - Appraisal Standards: Detailed requirements for the appraisal process following ImmoWertV guidelines

2. Schedule B - Approved Appraisers: List of mutually accepted qualified appraisers (if pre-agreed)

3. Schedule C - Notice Forms: Standard forms for giving notice under the contingency

4. Appendix 1 - Property Details: Specific property information relevant to the appraisal

5. Appendix 2 - Timeline Overview: Visual representation of key dates and deadlines

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Germany

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions






























Clauses




















Relevant Industries

Real Estate

Banking and Finance

Property Development

Construction

Real Estate Investment

Property Management

Professional Services

Legal Services

Relevant Teams

Legal

Real Estate

Compliance

Risk Management

Property Management

Investment

Operations

Finance

Business Development

Due Diligence

Relevant Roles

Real Estate Attorney

Property Lawyer

Real Estate Agent

Property Appraiser

Mortgage Advisor

Real Estate Transaction Manager

Property Developer

Investment Manager

Real Estate Portfolio Manager

Compliance Officer

Legal Counsel

Notary

Risk Manager

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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