What a partition auction is
A property in Germany that belongs to several people, whether heirs, former spouses or other co-owners, can only be sold if all of them agree. If one refuses, any co-owner can in principle apply to the local court for a partition auction (Teilungsversteigerung, § 753 of the German Civil Code, § 180 of the Act on Enforced Auction and Receivership [ZVG]). No lawsuit and no judgment are needed. Exceptions: a spouse who is still married under the statutory property regime needs the other spouse’s consent if the share is essentially all of their assets (§ 1365 of the Civil Code; Federal Court of Justice, decision of 14 June 2007, V ZB 102/06), and an agreement or a will can exclude partition (§§ 749(2), 2044 of the Civil Code), but a co-owner can still demand it for good cause. The court sells the property at a public auction, and the proceeds are divided among the co-owners. This is different from a compulsory auction (Zwangsversteigerung) applied for by a bank or another creditor; how owners can stop or delay such an auction is explained on our German-language page Zwangsversteigerung abwenden.
How the procedure works
The court first orders the auction and serves the order on the other co-owners, usually together with a notice of their right to apply for a stay. From service of that notice, they have two weeks (a strict deadline) to apply for a stay of up to six months, which can be repeated once (§ 30b and § 180(2) ZVG). A court-appointed valuer then values the property, and the court fixes the market value. At the auction, a bidder must provide security of ten percent of that value if another party entitled to it demands this immediately after the bid; cash is never accepted. The court refuses the award if the highest bid, together with the capital value of the rights that remain registered (such as land charges), is below half of the market value (§ 85a ZVG). This protection applies only until an award has once been refused for this reason; at the next auction it no longer applies. The cash bid itself can therefore be well below half. After the award, the court pays from the proceeds the costs of the proceedings and the claims that must be settled in cash (§ 109 ZVG); land charges that remain registered are not paid off but taken over by the buyer; the remaining surplus is paid out to the former co-owners only if they all agree on how to split it, otherwise it is deposited with the court for all of them. In our experience, the procedure usually takes between one and one and a half years.
Two points foreign owners often overlook
German tax. If the property was bought less than ten years before the highest bid is made at the auction, the loss of a share through the award can trigger German income tax (§ 23 of the Income Tax Act; Federal Fiscal Court, IX R 6/24). Real estate transfer tax of 3.5 percent in Bavaria is payable by the buyer. Exemptions apply, among others, to co-heirs dividing an estate, spouses, former spouses dividing their assets after divorce, and relatives in direct line (§ 3 of the Real Estate Transfer Tax Act).
Proof of inheritance. Heirs usually prove their status with a German certificate of inheritance (Erbschein), a European Certificate of Succession, or a notarial will or inheritance contract together with the record of its opening (§ 35(1) of the Land Register Code). For the application itself, supporting documents that make succession credible are sufficient (§§ 181(4), 17(3) ZVG). A foreign probate order or will is often not enough on its own. We clarify which documents the court will accept before the application.
Alternatives that usually pay off
An auction rarely achieves the best price. A buy-out of the other co-owners, a joint sale or a negotiated settlement is almost always cheaper. A pending application is often what makes the other side negotiate. We use it as leverage, not as an end in itself.
How we work with clients abroad
We handle the procedure at the courts in Munich and throughout Bavaria. You do not need to travel to Germany: documents can be signed abroad, and bids at the auction can be made by an authorised representative; the power of attorney for bidding must be publicly certified (§ 71 (2) of the Act on Compulsory Auction), for example by a notary or a German consulate, and we explain how to arrange this in your country. Court fees depend on the value of the property. Our own fees are usually charged on a time basis, with the German statutory fees as the minimum. If you instruct us only to file the application for a partition auction, we charge a flat fee equal to the statutory procedural fee. We agree this in writing before we start.