Would you buy property in a condominium that is still under construction? A New legislation significantly reduces your risks!

On 3 October 2025, a new draft legislation was published introducing the so-called condominium building right. Its essence is that, if the conditions set out in the sale and purchase agreement are met, the buyer receives a guarantee to acquire ownership of an apartment to be constructed in the future condominium. According to the draft, the holder of the condominium building right is entitled to it in the same proportion as the ownership share that would belong to them once the building is completed.

Greater security for buyers: condominium construction law

Although it was previously possible to conclude a purchase agreement for a property that had not yet been built, this was considered an uncertain and risky legal construct, with all risks being borne by the buyers, contractors, and credit institutions. The registrability of the so-called future building buyer’s right in the land registry previously guaranteed the buyer that they would acquire ownership of the property as soon as it was built and the buyer had paid the full purchase price, but this right does not provide protection against the registration of an enforcement right on the property. The reason for this is that in the case of a buyer’s right to a future building, the land registry does not guarantee the buyer’s priority of ownership over a subsequently registered enforcement right.

The land registry office only registers the buyer’s ownership on the day when the ownership registration permit is actually submitted to the land registry office, after the property has been built and the buyer has paid the purchase price in full. In practice, this means that there may be situations where the buyer ultimately acquires ownership of a property that is subject to enforcement proceedings. In addition, it is also possible that liquidation proceedings will be initiated against the construction company, and the purchase price paid by the buyer may not be recovered as a claim against the construction company. This risk would now be eliminated in the case of condominiums by the institution of condominium building rights, thus making sales transactions involving properties that do not yet have a use permit safer and more predictable.

Will I lose my money if the developer goes bankrupt?

The holder of the condominium building right—unlike the previously recognized holder of a purchaser’s right relating to a future building—may exercise the rights vested in mortgagees in the event of enforcement proceedings against the property or in the event of the liquidation of the obligor of the condominium building right (the developer), up to the amount of the purchase price or purchase price instalment paid by them.

In the event of enforcement against the property or the liquidation of the obligor of the condominium building right, the determining factor shall not be the time at which an individual acquired the condominium building right; thus, purchasers shall not recover their funds according to the order in which their rights were acquired. Rather, all holders shall enjoy identical rights (occupying the same ranking) irrespective of the date of the conclusion of their contract.

If it is not possible to fully satisfy the claims of all entitled parties, they shall be satisfied in proportion to the ownership share to which each is entitled.

When and how can condominium building rights be obtained?

Condominium building rights may be established after the preliminary establishment of the condominium has been entered in the real estate register. This may be done either in the purchase agreement for the apartment to be built or in a separate agreement between the parties for the benefit of the buyer, in return for consideration. The consideration paid for acquiring the condominium building right is counted toward the purchase price.

The condominium building right may also be transferred (sold): the previous holder, the party acquiring the right, and the obligor agree that the rights and obligations to which the previous holder was entitled under the purchase agreement shall be transferred to the acquiring party.

Can I take out a loan if I buy an apartment in a condominium that has not yet been built?

The condominium building right may be encumbered with a security interest (pledge), and for the purpose of securing such security interest, a prohibition on alienation and encumbrance may be established over the condominium building right.

Right of the purchaser in a future building or condominium building right?

It is important to note that the buyer’s right to a condominium that has not yet been built – i.e., the existing buyer’s right to a future building – will only be established after the legislation comes into force if the preliminary establishment of the condominium has not been registered in the real estate register. However, during the transitional period remaining until the new legislation enters into force, the real estate authority will temporarily register the buyer’s rights relating to the future building in the real estate register instead of the condominium building rights, at the request of the parties.

Upon the registration of the condominium in the land registry, the condominium building right shall automatically cease, and the ownership of the holder of the condominium building right shall take its place, while any pledge encumbering the condominium building right shall be replaced by a mortgage or an independent lien on the apartment acquired by the holder.

The experienced lawyers at LeitnerLaw are pleased to assist their clients with real estate transactions, legal issues related to real estate development projects, and matters concerning financing.