Legal succession: This is how you inherit according to the law

Legal succession regulates both the order of heirs and the individual amounts that are inherited. First the closest relatives, such as children and grandchildren, inherit and then the more distant relatives, such as nephews and nieces. Closer relatives generally exclude the more distant relatives from inheritance. The proportion to which the individual heirs inherit is documented in the certificate of inheritance.

The legal succession is based on the Parantel – or order system. It divides the relatives into different orders. Accordingly, children and grandchildren of the deceased belong to the first order. Parents, siblings, nieces and nephews of the testator are assigned to the second order. The third order includes grandparents, uncles and aunts as well as cousins of the deceased. Spouses and registered partners are not considered relatives, but have the right of inheritance as spouses. This gives them a special status and limits the right of relatives to inherit. Relatives of the preceding order always exclude relatives of a subsequent order from the succession.

Read more on the subject of partition auctions in communities of heirs!

Separate community of heirs: settle debts, distribute inheritance

Ideally, the heirs of a community of heirs would pay any debts swiftly from the estate and then dissolve the community of heirs by distributing the surplus according to shares. However, this is often not the reality. Disputes within the community of heirs often ensure that they remain unresolved for years after the inheritance. Each member of such a community of heirs has the right to demand dissolution at any time, even without good cause.

Step by step: Dissolving a community of heirs

In order for a community of heirs to be dissolved without disputes, it is advisable to follow certain steps. From the correct valuation of the estate to inheritance taxes, there are important fromalien to consider.

Determine estate

Until the estate has been determined, a community of heirs cannot be divided. The heirs receive most of the information from the bank where the deceased had the accounts or deposits. In order to gain access to these, a certificate of inheritance or a will with a court-ordered opening protocol is required. However, debts are also part of the estate. In order to determine the estate completely, the debts and the assets should be compared and reconciled.

Pay off an estate debt

The debts of the estate can be paid by the heirs of the community of heirs from the estate. It is not uncommon for items belonging to the estate to have to be sold for this purpose, such as real estate or land.

Take into account gifts and donations

If an heir has received gifts or donations from the deceased during his or her lifetime, these may be subject to equalisation. The gifts that are subject to equalisation increase the estate arithmetically and are deducted from the inheritance quota of the donee. Each heir can request information from the others about such gifts so that they are correctly taken into account.

Sell indivisible items

If a true division is not possible for certain items, such as a property in the community of heirs, the heirs may have to sell this item or have it foreclosed. In order to do this, a realistic sales price must first be determined. If no agreement can be reached here, a partition auction can be initiated by one of the heirs.

Distribute divisible objects

The inheritance is to be divided in the first place in nature by the heirs. Each heir can therefore take items for himself from the estate in agreement with the other heirs. Money and securities can be divided by the community of heirs according to their respective shares.

Consider care services

If a child has cared for the deceased parent without consideration during his or her lifetime, compensation may be claimed for this. This must be appropriate to the duration, scope and value of the estate.

Notary helps

If an agreement cannot be reached, a notary can be called in by the community of heirs. This mediates between the heirs in order to reach an agreement as quickly as possible. However, it should be borne in mind that such assistance is associated with some costs.

Take account of the tax office

Inheritance tax is always payable on an inheritance. However, some things from the estate can be deducted from the tax, such as the costs of the funeral or fees for the opening of the will.

Learn more about communities of heirs!

Errors in community of heirs – Video

Questions on the topic: Deal with inheritance

If the deceased did not leave a will, there are usually many open questions regarding the distribution of the inheritance. The legal succession is supposed to regulate this case, however, it often comes to disputes between the heirs. So that no questions remain unanswered for you and you know all the facts on the subject of inheritance, the experts of Lukinski now answer the most important questions.

How can I dissolve a community of heirs?

A community of heirs can only be dissolved if the inheritance can be distributed with the unanimous consent of all heirs. Depending on the case, partial auctions or notaries may be necessary to help with this.

Can you transfer an inheritance?

Upon the occurrence of the succession, each heir may freely dispose of his or her share. A transfer of the inheritance to a third person is therefore quite possible.

Can you also sell your share in a community of heirs?

Your share of real estate or land in an estate cannot be sold until either you are the sole owner of that property by a unanimous vote of the community of heirs, or the community of heirs has been dissolved and the shares have been paid out.

What do I need to apply for a certificate of inheritance?

To apply for a certificate of inheritance, you need an identity card or passport, a death certificate from the deceased, a family register, the names and adresses of the co-heirs and other relatives, if applicable the will or the contract of inheritance or information about their custodians.

What is an inheritance settlement agreement?

An inheritance settlement agreement regulates the division of the estate according to shares within a community of heirs.

What happens in a partition auction?

In a partition auction, an item belonging to the estate, such as real estate or land, is auctioned off and the proceeds are divided among the heirs according to shares.

When should the inheritance be disclaimed?

The inheritance should be disclaimed if it is over-indebted and the assets cannot cover the debts of the estate, or if dilapidated real estate is part of the estate, the renovation of which would be too expensive.

Wall unit at a glance: The divided wall between the neighbours

• Attached to the wall of the neighbour
• Requires permission of the neighbour
• Neighbour may share the use of the wall for his own purposes
• The wall entitles the neighbour to grow his own

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What does fraudulent misrepresentation in real estate purchase mean legally?

Legally, fraudulent misrepresentation is anchored in § 123 BGB (repeal) and § 444 BGB (exclusion of warranty exclusion in case of fraud). Simplified: whoever knows or at least considers possible a disclosure obligation defect and conceals it from the buyer cannot hide behind the usual “as seen” clause.

• Intent — Seller knows or considers the defect possible
• Duty of disclosure — Buyer would not have been able to recognize the defect on their own
• Causality — without deception, the contract would have been concluded differently
• Legal consequence — rescission, reduction or damages
• Time limit — 1 year from knowledge (§ 124 BGB), maximum 10 years
• § 444 BGB — warranty exclusion does not apply in cases of fraudulent misrepresentation

Important for investors: Unlike normal product liability (2 years), claims arising from fraudulent misrepresentation expire only after 3 years from knowledge (§ 438 Abs. 3 BGB). Anyone who wants to Buy an apartment building has a significantly longer time window for follow-up claims.

Typical cases: What courts classify as fraudulent misrepresentation

The case law of the Federal Court of Justice is extensive, but the line is clear: it is not about cosmetic defects, but about defects that affect the value and that an average buyer would not be able to recognize during a normal inspection. The following situations are particularly relevant in practice:

• Moisture/Mold — covered walls, concealed basements
• Roof damage — known leaks without indication
• House fungus — real fungus is always disclosure-obligatory
• Asbestos, KMF — hazardous substances in roof, facade, floor
• Encumbrances — unregistered right-of-way, setback areas
• Rent arrears — concealed payment defaults in investment properties
• Illegal constructions — lack of building permit for additions/renovations
• Previous damage — former water, fire or settlement damage

Especially risky for buyers of investment properties: concealed rent arrears or invalid rental agreements. These reduce the net cold rent and thus directly the net return calculation as well as the real purchase price factor calculation.

Burden of proof: Why 70 % of lawsuits fail

The biggest hurdle is not the law, but the proof. The buyer must prove that the seller knew of the defect or at least considered it possible — and this years after handover. Pure suspicions are not enough.

BGH, Judgment V ZR 30/19: “Fraud requires actual knowledge or a consideration of the possibility of the defect in conjunction with the awareness that the buyer does not know about the defect and would not or would not have entered into the contract in that knowledge.”

Practical tip: Secure written statements about critical points before notarization (moisture damage, rental arrears, known repairs). A specific question and a consciously false answer are clearly easier to prove than a general “he should have mentioned it”.

Economic damage: Calculation example for investors

How large the actual financial damage is, is often underestimated. The following scenario shows a rented condominium in a B-location, purchase price 450,000 €, cold rent 1,500 €/month — the seller conceals a water damage with renovation costs of 65,000 €.

The return loss amounts to about 20 % — at the same time with a significantly higher capital investment. Whoever does not legally follow up here, finances the seller’s debt over the entire holding period. As described in the Guide to real estate as an Investment, the quality of due diligence often decides the return more than the location itself.

What specific claims does the buyer have?

If fraudulent intent is proven, the buyer has a choice — he must strategically decide, as not every option is economically sensible. The choice depends on the extent of the defect, market development, and financing status.

Caution regarding revocation: The buyer bears the risk of calculating the prepayment compensation towards the bank, if the financing is terminated. With a loan of 350,000 € and 8 years remaining term, this can quickly amount to 25,000–40,000 € — although these are part of the damages, they must first be claimed.

Tax consequences: Speculation tax and depreciation upon revocation

If the purchase contract is revoked, tax-wise the economic reversal applies — the acquisition is treated as if it had never taken place. Already claimed depreciation must be corrected, and paid land transfer tax can be reclaimed under § 16 GrEStG (application strictly within 2 years).

• Land transfer tax — Refund possible under § 16 GrEStG
• Notary fees — Part of the damages claim
• Depreciation correction — previously used depreciation retroactively adjusted
• Speculation period — the 10-year period continues even with reduction
• Compensation for damages — generally not subject to income tax

For calculating the ongoing holding period, the original purchase date is decisive — details on this in the calculator for calculating the speculation period. Anyone who sells the property after a reduction should calculate the real estate speculation tax using the reduced purchase price as new acquisition costs.

Action Recommendation: 6-Step Plan if Fraud is Suspected

Anyone who discovers a concealed defect after handover should act quickly and systematically — the one-year right of revocation (§ 124 BGB) expires upon knowledge and cannot be extended.

• Step 1 — Immediately document the defect photographically
• Step 2 — Commission an expert opinion (1,500–4,000 €)
• Step 3 — Set a deadline for the seller in writing (2 weeks)
• Step 4 — Involve a specialist lawyer for real estate law
• Step 5 — formally explain rejection or reduction
• Step 6 — file a lawsuit within the statute of limitations

Never act hastily before the renovation — whoever removes the defect themselves without giving the seller an opportunity to remedy it often loses the right to claim damages. For ongoing purchase processes, it’s worth looking at our guide to buying real estate as well as the checklist for evaluating real estate — both significantly reduce the risk of fraudulent misrepresentation.

Frequently asked questions about fraudulent misrepresentation

Does the warranty exclusion “as seen, as bought” also apply in cases of fraudulent misrepresentation?

No. § 444 BGB explicitly excludes the possibility of appealing to the warranty exclusion if the seller has deliberately concealed the defect. Even the strictest contractual exclusion does not protect against claims arising from deliberate deception. This very fact makes this provision the most important buyer protection in German real estate law — it cannot be waived contractually because it would violate good faith.

Is the real estate agent just as liable as the seller?

Generally yes, as soon as the agent has their own knowledge of the defect or deliberately makes false statements. The agent will then be held liable under § 280 BGB from the agency contract or from c.i.c. (§ 311 Abs. 3 BGB) as a fiduciary. In practice, this means: buyers can claim against both the seller and the agent — which is particularly interesting if the seller is insolvent or based abroad. A serious professional liability insurance of the agent usually covers such cases.

What is the realistic success rate in court?

Statistics from the OLG case law show that only about 30–35 % of claims for fraudulent misrepresentation are fully successful. The main reason: The proof of intent fails. With expert opinions, documented written seller statements, and witnesses (e.g., craftsmen who were previously commissioned), the success rate increases to 60–70 %. Investors should therefore archive all conversations, exposé content, and email correspondence from the beginning — these will become decisive evidence in the event of a dispute.

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