Liability in the real estate purchase contract

The low financing costs are currently increasingly leading to the purchasing and selling of real estate. Unfortunately, the rude awakening comes later on for the buyer. Once the purchase price has been paid and the object has been handed over, the buyer is often surprised by defects that he would not previously have thought would be possible. A glance at the purchase contract usually quickly leads to disillusionment. Thus, almost every notarized purchase contract for a condominium or other property receives a comprehensive disclaimer. Accordingly, the seller excludes all liability for material or legal defects. As a rule, the seller refers to this disclaimer and rejects all complaints of the buyer.

So, is the buyer completely without rights?
The legal situation for the buyer is not quite as dramatic. Starting point for claims of the buyer is the regulation in § 444 BGB. It states that a seller cannot then invoke a disclaimer if the seller either guarantees a certain condition or has fraudulently deceived the buyer.

Seller is liable for the quality agreement made in the purchase contract
However, an express guarantee rarely gets the purchase contract. Usually the sellers are careful to keep the information about the property quite general and therefore to refrain from specific information. At the same time, there are also special conditions of agreement in places that must be complied with despite the exclusion of liability. For example, information about the size of the apartment, the year of construction or even the previous payment history of a tenant which has to be taken over.

Problem: provability of a malicious behavior of the seller
Most disputes, however, are led to the question of whether the seller is to blame a malicious behavior. Such behavior is not only assumed by the case law if the seller has answered certain questions of the buyer incorrectly or has deliberately given false or misleading information in any other way. This misinformation is usually always capable of exposing a malicious behavior – the problem here is often more in being able to prove the concrete utterances.

Does the seller have to give information of the broker exposé?
In this context, however, a broker expose can gain meaning. Because after various decisions a seller must be credited with information from a corresponding exposé if he has instructed the broker with the mediation of the object and had knowledge of the exposé or the information contained therein from the seller. Wrong information that is found there is usually well documented by the buyer and therefore represents a good starting point for the invalidation of a disclaimer.

In case of serious defects, the seller must point out these defects
If there is a lack of concrete statements by the seller, a malicious behavior can nevertheless be affirmed if the seller can be accused of not informing the buyer about the existence of defects without being asked. Of course, the seller will not have to clarify all the shortcomings, since in principle, each party may and should protect its own interests. Nevertheless, according to the case law a clarification should take place where there is obviously a special significance for the purchase decision of the buyer. The more important a defect is the sooner the seller would have been obliged to explain the defect.

The decisions in the case law on this are numerous. Frequently encountered is a pest infestation (for example, also house buck, woodworm) or even moisture damage. In principle, there is an obligation to inform provided that the damage takes on a certain extent.

Problem: buyer must prove to seller’s knowledge of the defect
In order to be able to successfully register claims the buyer must always prove that the seller was aware of the defect. This is easier with visible deficiencies than with more hidden deficiencies. However, if a seller has lived in an object himself, knowledge of a serious defect can usually be assumed.

In case of ineffectiveness of the disclaimer the purchaser has all rights under the commercial law against the seller.

If the buyer has skipped the hurdle of disclaimer, he has the full range of commercial claims available. The buyer can therefore in principle withdraw from the purchase contract provided the defect has a certain significance. As far as possible, however, or next to it the assertion of a concrete claim for damages, for example consists in the cost of the necessary repair work.

It is also conceivable to reduce the purchase price which is particularly relevant where repair can not be specifically quantified or is not possible (for example, incorrect year of construction).

The more severely the lack, the easier the knowledge of the defect can be proven in general.

Overall, one can state that the chances for the buyer are not so bad as it might seem in advance. The more serious a loss, the more likely it is to assume that the seller should have disclosed the defect.

Legal expenses insurance usually covers such cases
Buyers with a legal protection insurance usually benefit from being covered by their insurance because this is a „normal“ sales contract dispute. It is therefore worthwhile in case of any difficulties to resort to a legal expenses insurance.

If such an insurance is lacking and the claim can be enforced successfully, however, the seller has to bear all legal costs anyway. This includes the costs of the legal representation.

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