BGH: Right of first refusal granted without notarial deed
> June 2016
Rights of first refusal previously had to be certified by a notary. The German Federal Court of Justice (BGH) recently reversed a position that it had held for over 25 years by deciding that the agreement required to provide a material right of first refusal does not have to be certified by a notary.
The case involved a right of first refusal, which the owner of a plot of land had granted to his neighbour. In return, the owner was granted access rights by the neighbour because the only way which the owner could access a public road was by crossing the neighbour's property. These agreements had not been certified by a notary, but both parties had entered them in their respective land registers. Years later, the owner wanted to sell the property. The neighbour invoked his right of first refusal and hence blocked the sale. The owner demanded that the right of first refusal be revoked, and was initially successful with his petition before the Bremen District Court. After the Higher District Court of Bremen sided with the neighbour, the owner appealed to the German Federal Court of Justice (BGH). The BGH dismissed the appeal because the land register must contain incorrect content before a correction to be made. However, it did not contain any errors as regards the material right of first refusal. The fact that the agreement had not been certified by a notary was considered to be irrelevant. This was a reversal of the BGH's previous position. The BGH decided that property sellers only have to adhere to a particular form if expressly required by law. However, there is no obligation for agreements to be certified by a notary under Section 873 of the German Civil Code, and there is no need to apply formal contractual requirements due to the "principle of separation" in German law (BGH decision of 8.4.2016 V ZR 73/15).
