Berlin Aspire: Gelbart Legal obtains Germany’s first (German) purchase agreements on the basis of an Israeli preliminary agreement

In August 2020, we reported on the first preliminary injunction in Germany for the registration of a priority notice on the basis of a written preliminary contracts of the “Berlin Aspire” group on the acquisition of an apartment in Berlin, to which Israeli law applies due to a choice of law in the contracts (details here).

In May 2021 and January 2022, we reported that the Berlin Court of Appeal in the meantime confirmed several of the preliminary injunctions we had obtained for the registration of priority notices of conveyance, including a decision of 1. Apr. 2021 (details here) and decision of 17. Jan. 2022 (details here).

In March 2023 and June 2023, we have been able to obtain the first (Germany-wide) judgments issued (Berlin Regional Court, Urt. v. 22.03.2023, Az. 22 O 152/21, Urt. v. 14.06.2023, Az. 22 O 174/21, Urt. v. 22.06.2023, Ref. 22 O 118/22) in which several property companies of the “Berlin Aspire” group were ordered to submit notarized offers of sale to our clients and pay substantial penatlies, both on the basis of those Israeli preliminary contracts signed in Tel Aviv, Israel, while having to accept that purchase prices were partially paid even though these payments were made to other companies of the group. On the basis of several legal opinions on Israeli law, the Berlin Regional Court came to the conclusion that the preliminary contracts were formally valid, that the property companies were effectively represented by the former owner of the “Berlin Aspire” group, and that the preliminary contracts were (implicitly) approved by the property companies by making those yield payments promised therein. On the basis of these judgments, our clients can now sign notarized declarations of acceptance and be registered as new owners in the land register.

The decisions of the Berlin Regional Court are of decisive importance. For the first time, a German court has awarded a claim to the conclusion of a real estate purchase contract on the basis of a non-notarized written foreign contract, although according to German law and understanding, real estate purchase contracts and preliminary contracts are void if they are not notarized (§§ 125, 311b Para. 1 German Civil Code – BGB). In addition, by crediting advance payments made to other companies, the Berlin Regional Court also (finally) takes appropriate account of the corporate structure and the fact that advance payments were shifted between the companies at will.

With these judgements, the Berlin Regional Court is doing justice, as hundreds of Israeli victims – who have already had to pay 50-100% of the purchase price without any security (details here) – will now receive compensation for their loss of assets. In addition, the judgements put an end to the questionable business model of the “Berlin Aspire” and should ensure a rethinking of other corporate networks in Berlin with similar business models.

Involved lawyers (Israeli buyers):
Norman Nathan Gelbart (Partner),
Christoph Stoye und Stephan Bauch-Caspari (lead),
Moshe Shlezinger