Is a partial sale a loan?

No. You sell a share and receive the purchase price; the buyer becomes a co-owner and remains one. There is no repayment and no residual debt — instead an ongoing usage fee and items that fall due on the eventual full sale.

What happens if I can no longer pay the usage fee?

That is in the contract, and it is the question with which the review should begin. Have them show you what follows from arrears, from when, and what then happens to your right of residence. If that answer does not come clearly and in writing, that is itself an answer.

Can the buyer force the sale of the whole house?

Co-ownership in principle gives rise to a right to demand dissolution (section 749 BGB), which for land means a forced auction (section 753 BGB). Contracts usually exclude it for a defined period. Check two things: whether yours does and for how long — and whether the exclusion is entered in the land register. Only if entered does it also bind whoever later acquires the share (section 1010 BGB).

Knowledge · Reshaping how you live

What a partial sale really is.

You sell a share in your house, go on living in it and pay a fee for doing so. That sounds simple — and the decisive questions are not in the advertising copy but in the land register.

The answer first. A partial sale is not a loan but a genuine sale: the buyer becomes a co-owner and remains one. You go on living there, pay an ongoing usage fee for it, and further items arise on a later full sale. The one question that must be settled before signing is therefore not „how much do I get?" but: what happens if I can no longer pay, or no longer want to?

You transfer a notional share in your land — often up to a half — to a buyer. Like every contract concerning land, it requires notarial recording (section 311b BGB). From registration onwards the two of you are co-owners in fractional shares. Your living there is as a rule secured by a usufruct or right of residence (section 1093 BGB) entered in the land register; for the ongoing fee a charge on land is often used (section 1105 BGB).

Priority is what matters. A right of residence protects you only as far as it stands near the front of the register. If the buyer’s land charge ranks ahead of it, your right can be extinguished in a forced sale. The question to put to the notary is therefore, literally: in which section and at what rank is my right entered, and what ranks ahead of it?

Fractional co-ownership is a community — and in principle any co-owner may demand its dissolution (section 749 BGB). And with land, „dissolution" does not mean a sale in the ordinary sense: section 753 BGB expressly prescribes a forced auction — there it is the statutory route, not the emergency. Sound contracts exclude or restrict this right for a defined period; section 749 permits that. Whether and for how long your contract does so is not in the brochure — it is in the contract.

Two limits belong with it, and both are rarely named. First: an exclusion does not help against everything. Section 749(2) allows dissolution nonetheless where there is good cause, and subsection (3) voids any agreement that tries to exclude that too. Second, and this is the decisive one: under section 1010 BGB such an exclusion binds the successor in title of a co-owner — anyone who later acquires the share — only if it is entered in the land register as a charge on that share. If it stands in the contract alone, it is worth nothing against the next acquirer. So the question to put to the notary is: is the exclusion entered in the land register — and at what rank?

Then there are the items that only fall due later: a completion fee on the eventual full sale, often a guaranteed minimum value in the buyer’s favour, and the question of who bears maintenance for the whole house. Ask about each of these separately and have the answer given to you in writing.

If the house is to stay in the family, a lifetime transfer against a right of residence or usufruct is usually the calmer arrangement: you go on living there, ownership passes in an orderly way, and no external provider sits at the table. If money is needed, depending on the situation a full sale followed by renting, letting part of the house, or an ordinary loan may also come into consideration.

The comparison of the three release-of-equity routes has a page of its own: Staying in the house and freeing up money. And whatever you decide: obtain a second opinion before signing — from the consumer advice centre and a tax adviser. It costs little and uncovers conditions that are easily lost in a friendly offer.

Is a partial sale a loan?: No. You sell a share and receive the purchase price; the buyer becomes a co-owner and remains one. There is no repayment and no residual debt — instead an ongoing usage fee and items that fall due on the eventual full sale.
What happens if I can no longer pay the usage fee?: That is in the contract, and it is the question with which the review should begin. Have them show you what follows from arrears, from when, and what then happens to your right of residence. If that answer does not come clearly and in writing, that is itself an answer.
Can the buyer force the sale of the whole house?: Co-ownership in principle gives rise to a right to demand dissolution (section 749 BGB), which for land means a forced auction (section 753 BGB). Contracts usually exclude it for a defined period. Check two things: whether yours does and for how long — and whether the exclusion is entered in the land register. Only if entered does it also bind whoever later acquires the share (section 1010 BGB).