The German Condominium Act (Wohnungseigentumsgesetz - WEG) requires a clear separation between the condominium property, which is also referred to as special property of residential and other spaces (e.g. garages) and the common property. The separation declaration is issued by the Construction Authorities, and together with the partition plan (Aufteilungsplan) and the partition deed (Teilungserklärung) it forms the legal basis for converting a property into condominiums and common property.

The borrower makes a fixed annual payment (annuity) that comprises of interest and amortization payments. The amount of this payment is calculated on the basis of a percentage of the original loan amount. As the loan and the annual interest that is due become smaller over time, the amortization part of the annuity increases.

Total amount of all expenses that need to be made in order acquire a real estate property. In addition to the actual purchase price this also includes land acquisition tax, expenses for notaries and courts as well as financing costs.

The partition plan is required for converting a residential lease property into condominiums. The partition plan assigns numbers to the apartments, the basement rooms, garages, parking spots, etc. These numbers are used to identify the different apartments in the actual partition deed. The partition plan is an integral part of the separation declaration.

Costs incurred for the maintenance of a building. These costs comprise of operating costs, maintenance and refurbishment costs, and property management costs.

The yardstick for measuring the creditworthiness of a person. This depends on a person's financial situation (assets and liabilities).

The acquisition of an apartment is usually financed by a loan. It is important to compare the different offers from banks and savings and loans associations in order to obtain a loan with favorable terms. Mortgage loan is often used as a general term for all loans for which real property serves as collateral. These are loans for which a land charge or a mortgage in favor of the lender is entered in the land register.

Difference between the nominal amount and the actual amount of a loan that is paid out. If the disagio is 2.0%, for example, only 98% of the total loan amount are actually paid out, while the full 100% of the loan amount will have to be paid back.

Includes cash, fixed deposits, balances on saving accounts, securities, etc. that a buyer can use for buying or financing a real estate property.

A condominium also includes the special property and thus the co-ownership of the land and other common property. Condominium ownership grants the owner the immediate usage rights of the apartment.

Each condominium owner is a member of the relevant condominium owners' association that jointly manages the real estate. The governing body of the association is the owner's assembly that meets at least once a year. The assembly is convened by the administrator who must send written invitations to all condominium owners. Each owner has one vote in this assembly. The resolutions adopted by the assembly are binding. The administrator is responsible for implementing the resolutions and for managing the common property.

Borrowed capital is the difference between the total costs and the equity that is available for the financing. It is the total amount of all loans granted by banks and other lenders (employer, public institutions, private individuals, etc.).

The common property comprises of the land and certain parts of the building that do not form part of the special property directly linked to a condominium. This includes the staircase, jointly used basement rooms, etc. The costs incurred for maintaining/refurbishing the common property are shared between the condominium owners.

The fiscal authorities levy a land acquisition tax when you purchase special property or real property. As of Jan. 2006 this tax amounts to 3.5% of the purchase price and it is usually due a few weeks after the purchase contract has been certified by a notary. Only once the land acquisition tax has been paid will the fiscal authorities issue an approval certificate to the land registry which can then enter the new owner into the land register.

Grundpfandrechte sind Rechte / Belastungen, die zur Sicherung von Forderungen an Grundstücken und Immobilien (Grundschuld) bestellt werden.

The land tax forms part of the operating expenses. It is levied by the municipality, which also determines the amount of the land tax.

Maintenance costs are the costs that are incurred for maintaining a building during its period of use.

The maintenance reserve is the previously defined annual amount that condominium owners pay for the maintenance of the common property of a condominium owners' association. This reserve is interest bearing and the annual contributions to be made are defined by way of a resolution adopted by the annual condominium owners' assembly.

The cadastre is the official record that includes the measurements and descriptions of all pieces of land in a municipality.

Each purchase agreement for land or a building needs to be certified by a notary. Such notarization obligates the purchaser to pay the purchase price and the seller to transfer the ownership of the property to the buyer.

The notary charges a fee for certifying and executing a purchase agreement. This fee is stipulated by national law and amounts to approx. 1% of the purchase price.

According to the German Condominium Act [Wohnungseigentumsgesetz (WEG)] the special property comprises of the condominium and other property that is directly linked to the condominium and needs to be clearly separated from the common property. The owner of a special property may use this property at his discretion, i.e. the owner is free to sell, give away for free, bequeath, rent, or encumber the special property. The special property is recorded on a separate folio (page) in the land register.

The special usage right describes the right to exclusively use common property such as a garden, terrace, parking spot, etc.

Deed issued to the land registry by the owner of a piece of land, declaring that the ownership of that piece of land is divided among several co-owners. The partition deed formally divides a property into personal and partial ownership. The partition deed also governs that relations among the different owners and the administrator.

The administration costs include all costs that are required for managing a property. The administrator prepares an annual budget that serves as the basis for the following year. The expenses include repairs and maintenance, the costs for executing the resolutions adopted by the condominium owners' assembly and the administrator's fee.

The administrator of a condominium owners' association prepares a budget for the following fiscal year that includes all expected revenue and expenses. The revenue comprises of the contributions made by the condominium owners and of interests, the expenses include administration costs, insurance costs, and the administrator's fee. The expected expenses determine the monthly amount (housing money) that each condominium owner needs to pay. The budget must be approved by way of a resolution adopted by the condominium owners' assembly.