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District‑heat contracts and property sales: the 5 clauses you must read before notarisation
A practical guide for foreign buyers: which five district‑heat (Fernwärme) contract clauses — indexation, minimum‑take (take‑or‑pay), change‑of‑owner, price‑review and termination — materially affect value and liability at closing, and what to ask your notary and lawyer.
Why district‑heat clauses matter at closing
District‑heating (Fernwärme) supply contracts are regulated by the federal Verordnung über Allgemeine Bedingungen für die Versorgung mit Fernwärme (AVBFernwärmeV), but most operative details — prices, indices, minimum‑take obligations and assignment rules — are set in the supplier's contract or supplemental conditions. These contract terms travel with the property: when an owner sells a building that is connected to a network, the buyer commonly becomes the contractual customer (and liable for future payments) unless the parties and supplier agree otherwise. That makes a careful review before notarisation essential: unusually large index clauses, a binding minimum‑take, or restricted termination rights can create multi‑year cost commitments that change the investment case. (AVBFernwärmeV; Verbraucherzentrale consumer guidance.)
1) Indexation: what to look for (and the usual indices)
Many suppliers use a price‑adjustment formula rather than fixed annual prices. The formula typically references one or more indices (for example the German Consumer Price Index / VPI) and commodity or energy market prices; suppliers publish the exact formula and index sources in their price schedules. Read the formula line‑by‑line: a clause that ties the heat price to a wholesale fuel basket plus the VPI can produce very different outcomes from a straight CPI link. Also note whether the supplier can change the index or the weighting unilaterally — that is material. Where a price‑change clause exists AVBFernwärmeV gives the customer a specific right: in many cases the customer may terminate the heat‑supply contract extraordinarily with effect at the latest at the end of the first year after the price change. Check the price schedule annex for the index names and the publication source (for example GENESIS / VPI codes are sometimes quoted). (See supplier price schedules.)
2) Minimum‑take / 'take‑or‑pay' clauses — the hidden liability
Some contracts include a minimum annual quantity (MWh) or an effective 'take‑or‑pay' obligation: if the customer fails to take the agreed volume, the supplier invoices the shortfall or charges a penalty. These clauses are common in small network or project financing models (you will see explicit 70‑80 % minimums in some municipal contracts). Because German courts treat minimum‑take clauses under general contract law and AGB control, enforceability depends on the clause wording and the commercial context — there is BGH case law on minimum‑take obligations. For a buyer, a binding minimum can mean paying for heat that nobody in the building uses; check whether the clause survives a change of owner, whether measured consumption or a flat compensation applies, and whether caps or step‑downs exist after a defined period. (Example municipal contract; BGH precedent.)
3) Change‑of‑owner / assignment: who becomes the customer?
Practical rule: when the property is sold, the buyer commonly becomes the customer if the building remains connected. Consumer guidance from the Verbraucherzentralen warns sellers that they must ensure the buyer accepts the existing Fernwärme contract. The supplier's terms often require an explicit declaration or a formal contract assignment; some suppliers demand an application by the new owner before supply continues. In the notarial appointment you must confirm who will notify the supplier and that any required signature or application will be made immediately on completion. If the buyer will not accept the contract, obtain a written confirmation from the supplier that it will allow re‑contracting or early termination, and check any exit fees.
4) Price‑review and audit rights: can you test the bill?
Look for a price‑review clause and the supplier's obligation to publish the price basis and indices (many do this in a published 'Preisblatt'). Confirm whether the contract permits you (or a retained engineer) to audit consumption data and index sources, and what the timeline is for supplier invoices and adjustments. AVBFernwärmeV and many supplier price rules require the supplier to state the sources and allow a customer remedy where a unilateral change occurs. If the contract limits audit rights or imposes short challenge windows, that is a negotiation item before signing.
5) Termination rights: what happens if prices rise or the network changes?
Two termination points matter: (a) termination following a price change, and (b) termination for operational reasons (e.g. network shut‑down, fuel‑switch or plant replacement). § 24 AVBFernwärmeV gives the customer an extraordinary termination right often exercisable up to the end of the first year after a price change becomes effective. Separately, supplier AGB will define termination for breach or stoppage; check whether the supplier may modify the price formula on account of a change in law or fuel mix and whether that allows you to exit. If the contract forbids termination or ties it to heavy compensation, that increases transactional risk and must be flagged in the notarial protocol.
Practical checklist for the notary appointment
Before you sign the sale deed: 1) Obtain the full Fernwärme contract and the current price schedule (price‑sheet). 2) Mark the exact index formula and the index sources (CPI / VPI codes or market price sources). 3) Identify any minimum‑take percentages and the financial remedy for shortfall. 4) Get written confirmation from the supplier on what happens at an owner change (form required, any registration or fee). 5) If the contract limits termination or audit rights, instruct your lawyer to propose carve‑outs or a notarial condition precedent. These items should be recorded in the sales deed or as an annex so the notary can note outstanding conditions.
Nothing on this page is investment, tax or legal advice. Price bands are indicative asking prices and disagree between sources by design. Verify every figure with a qualified German notary, tax adviser (Steuerberater) or lawyer before committing capital.
