How to draft a solid real estate sales contract in Luxembourg

Drafting a real estate sales contract in Luxembourg requires close attention to detail to ensure the agreement is legally sound and protects the interests of all parties involved. Here are the key steps and essential elements to include when drafting a solid real estate sales contract in Luxembourg.

1. Identification of the parties

Begin by clearly identifying all parties involved in the transaction:

Seller(s): Include the full names, addresses, and contact details of the current property owners.
Buyer(s): Likewise, include the complete information of the potential buyers.
Legal representatives: If the parties are using attorneys or agents, their contact details should also be included.

2. Description of the property

A precise and detailed description of the property is essential:

Full address: Include the exact address of the property.
Property characteristics: Describe the type of property (house, apartment, land), the size (in square meters), the number of rooms, outbuildings, and any other relevant features.
Cadastral information: Mention the cadastral number and the municipality where the property is located to avoid any confusion.

3. Sale price and payment terms

The sale price should be clearly stated in the contract, along with the payment terms:

Total amount: Specify the agreed sale price between the parties.
Deposit: Indicate the amount of the deposit paid by the buyer, often held in escrow by the notary.
Payment terms: Specify the payment schedule, including installment dates if payment is staggered.

4. Conditions of sale

The specific conditions of the sale must be clearly defined:

Contingencies: For example, the sale may be contingent on the buyer obtaining financing or receiving a favorable inspection report.
Condition of the property: Include a clause stating the condition in which the property must be delivered to the buyer, including any potential hidden defects.
Deadlines: Specify the deadlines for signing the authentic deed and handing over the keys.

5. Obligations and declarations of the parties

It is crucial to outline the obligations of each party:

Seller’s obligations: This includes the delivery guarantee (the property must be delivered in the condition described in the contract), the obligation to provide all necessary documents (energy performance certificates, building permits, etc.), and the guarantee against hidden defects.
Buyer’s obligations: This includes payment of the price according to the agreed terms and settling the notary fees.

6. Special clauses

Certain special clauses may be added according to the needs of the parties:

Penalty clause: Provides for compensation in the event of a breach of contractual obligations by one of the parties.
Termination clause: Details the conditions under which the contract may be terminated without additional costs for either party.

7. Signature and authentic deed

Finally, the contract must provide for the signatures of the parties and the drafting of the authentic deed by the notary:

Signature of the preliminary sale agreement: This pre-contractual document binds the parties until the authentic deed is signed.
Notarial deed: Specify that the sale will be formalized by a notarial deed, which is mandatory in Luxembourg for property transfers.

8. Annexes

Attach all necessary annexes for a full understanding of the contract:

Property plans
Inspection reports
Energy performance certificate
Excerpt from the cadastral register

Conclusion

Drafting a real estate sales contract in Luxembourg requires meticulous attention to detail to ensure the clarity and legality of the transaction. By following these steps and including all essential information, you can ensure that the contract protects the interests of both parties and complies with legal requirements. It is always recommended to involve a notary in the drafting and validation of the contract to ensure its compliance with Luxembourgish law.