Real estate sellers could have stricter obligations to provide information about possible renovation costs. The Federal Court of Justice (BGH) negotiated a case from Hanover on Friday and questioned a judgment by the Celle Higher Regional Court, which had seen the responsibility primarily with the buyer. In principle, everyone is responsible for obtaining the necessary information, said the presiding judge at the BGH, Bettina Brückner. However, details need to be checked.
The Senate wants to make a judgment on September 15 in Karlsruhe. The court in Celle may have to negotiate again. The Immobilienverband Deutschland IVD assumes that the decision is generally relevant for all purchase investigations.
Do you have to point out special things clearly?
Among other things, the negotiation was about the fact that the seller had placed documents in a virtual data room. But could she rely on interested parties to check them on their own? Or do you have to point out special things clearly? According to Brückner, it could also make a difference whether the documents are intended as expert opinions, in which one searches specifically for defects, or should go to a bank for financing issues.
The BGH lawyer for the buyer said that the seller had to provide a comprehensive picture in such a data room from the outset. If something is pushed, he must point it out.
In this specific case, it is about the purchase of several commercial units in a large building complex for more than 1.5 million euros. The plaintiff – a company – feels fraudulently deceived because she found out too late that she could face high costs for the maintenance of the community property. The seller placed the minutes of an important owners’ meeting in the data room three days before the contract was signed. From the plaintiff’s point of view, this happened “secretly” and was thus “foisted” on her.
Up to 50 million euros were budgeted for the conversion. Because the majority owner did not want to pay, the case ended up in court. The procedure ended in January 2020 with a settlement, according to which a special contribution should be levied on the owners of the commercial units. The plaintiff then challenged the contract of sale.
“Strong fault against himself”
In this, the seller had assured, among other things, that with one exception no special contributions had been decided. It also stated that the seller had given the buyer minutes of the owners’ meetings for the past three years and that the buyer knew the contents of the documents.
The BGH lawyer for the seller said that the buyer knew the text of the contract eleven days before signing it. If she then doesn’t ask questions, it’s “blatant fault against herself”. The buyer must carefully consider what information he needs and has. Anyone who sees the affected property – the Ihme center in the Linden district – recognizes the renovation backlog that has accumulated for years.
The Higher Regional Court of Celle had ruled that no special allocation had been decided before the contract was concluded – in this respect the seller had not made any false statements. The BGH also wants to check that – in addition to the completeness of the documents.
According to the real estate association IVD, a purchase investigation – also known as due diligence – almost always takes place. “Before making a purchase, every buyer checks whether the object meets their expectations,” explained the deputy IVD national manager, Christian Osthus. As a rule, however, this is not done in an organized manner or via third parties. “This is actually only the case for larger transactions or if it is in the custom of the buyer.”
