Land register changes for real estate partnerships under civil law require prior entry in the company register

Since the beginning of the year, changes to the shareholder structure of a partnership under civil law (GbR) can no longer be entered in the land register, but only in the company register. This was decided by the Higher Regional Court of Frankfurt - and is one of the first decisions on the new partnership law.

Facts of the case

A law firm was registered in the land register as a GbR. After one of the partners had died, the GbR applied for the land register to be corrected to remove the deceased partner. The land registry objected to the fact that the partnership agreement submitted was only available in private written form and did not meet the requirements of Section 29 of the Land Register Act (GBO). The correction should therefore be approved by the remaining partners and the heirs of the deceased in a publicly notarized form. The GbR lodged an appeal against this interim order.

The decision of the Higher Regional Court of Frankfurt dated April 11, 2024 (case no. 20 W 187/23)

The court revoked the interim order, but for reasons other than those put forward by the GbR. With the entry into force of the MoPeG (Act on the Modernization of Partnership Law) on January 1, 2024, changes in the shareholder structure of a GbR can no longer be entered in the land register if the GbR itself is not entered in the (newly created) company register. This applies even if the application was submitted before January 1, 2024 and even if the changes had already occurred before the cut-off date.

Practical note

On January 1, 2024, the MoPeG comprehensively reformed German partnership law - i.e. the regulations on civil law partnerships, general partnerships and limited partnerships in particular. The changes are of great importance for real estate GbRs, among others. The legal situation for these was previously unsatisfactory: they were not entered in a public register, which repeatedly led to ambiguities regarding the shareholder and representation relationships or difficulties with land register entries.

The MoPeG aims to improve things. In particular, the legislator has introduced the eGbR (“eingetragene Gesellschaft bürgerlichen Rechts”) - i.e. a GbR entered in a company register for the first time. This entry in the company register is not mandatory for all GbRs, but only for GbRs that have to prove their capacity to act or their legal capacity (e.g. due to an entry in another register or the land register). The registration obligation therefore applies in particular to GbRs that acquire or sell real estate or company shares.

For legal transactions, registration in the company register, especially in conjunction with other registers and the land register, will certainly provide more legal certainty and transparency. However, there may be difficulties along the way, such as - as the decision of the Frankfurt Higher Regional Court shows - the impossibility of making changes to the shareholder structure in the land register as long as the GbR has not yet been entered in the land register.

It is therefore advisable for GbRs subject to registration to adapt to the new legal framework promptly. Without an entry in the company register, there may be considerable difficulties with entries in the commercial register or the enforcement of rights and obligations in land register proceedings. It is therefore advisable to make the entry now - even without a specific reason, because “what you have is yours”.