Obligations of the seller to provide information when buying a house/flat

Damage or defects to a property often only become apparent after the notarized purchase contract has been concluded. However, since used real estate is usually sold under exclusion of liability for material defects, the question then arises whether the buyer can still take action against the seller at all after the fact (i.e. after notarization).

The decisive criterion is often the question of whether the seller has breached his duty to provide information, thereby reviving the liability for material defects (§ 444 BGB). However, since a seller of real estate is not obligated to provide information about every existing defect, the question arises as to when obligations to provide information exist.

1. After concrete questions

A duty of clarification exists after specific questions of the buyer. The seller is then obliged to answer the question completely and correctly. No information may be given "in the blue" in response to specific questions, and the seller may not "downplay" any facts or truths or only come out with half the truth. If the buyer specifically asks whether the house contains mold or asbestos and the seller answers with a clear "no", although he has no knowledge of this, he is in breach of his duty of disclosure because he has answered the question inadmissibly "in the dark".

2. Duty of disclosure due to material significance

In the second group of cases, the seller is obliged to provide information even without a specific request from the buyer, as these are so-called disclosable circumstances. The seller is obliged to disclose the respective fact to the buyer without being asked if it concerns such facts which are of essential importance for the buyer's decision to purchase and which he can also expect to be disclosed according to common usage.

"...if the seller knows the circumstance or considers it possible and at the same time knows or expects and accepts that the contractual partner does not know the circumstance and would not have concluded the contract or would not have concluded the contract with this content if it had been disclosed (BGH, NJW 1995, 1549 f.)".

Clarification about past crimes in the house?

The Coburg Regional Court recently ruled on a case that attracted a lot of media attention (Coburg Regional Court, ruling dated October 6, 2020 - Ref. 11 O 92/20). In this case, the plaintiff had acquired a property from the defendant in 2018. However, the defendant, as the seller, had not disclosed in the course of the sales process that a woman and a small child had been murdered in this house 20 years ago. The plaintiff therefore wanted to rescind the notarized purchase contract and declared the rescission due to fraudulent misrepresentation. She argued that she would not have purchased the property if she had known about this psychologically charged event before the purchase.

Duty of disclosure? Yes/No

The Coburg Regional Court dismissed the buyer's claim. According to the court's conviction, the fact that a crime has taken place in a house for sale can, depending on the circumstances of the case, also be subject to unasked-for disclosure. However, this does not apply without limitation in terms of time, since in an objective assessment the significance of such a circumstance for the purchase decision decreases with the passage of time. In the present case of the Regional Court of Coburg, more than 20 years have passed between the double murder, which took place on October 02, 1998, and since the conclusion of the purchase agreement on December 13, 2018. In the conviction of the court would not have to be cleared up over a crime so long ago without demand or addition of special circumstances.

No fraudulent intent

However, the plaintiff's claims fail for another reason. Even if one were to assume a duty of disclosure on the part of the seller, the defendant still lacks a fraudulent act. A person acts fraudulently only if he expects or accepts that the contractual partner is not aware of the circumstance and would not have concluded the contract or would not have concluded the contract with this content if the circumstance had been disclosed. After informative hearing of the court, no malice was to be assumed on the part of the defendant. The fact that the crime that took place in 1998 would have had a meaning apparently did not play a decisive role for the defendant, since the defendant herself lived in this property for over a decade. For both her and her divorced husband, this incident no longer played a role. According to the court's conviction, the defendant had therefore not accepted that the plaintiff would not have concluded the contract or would not have concluded it with the agreed content if she had known about the relevant circumstances. It was then up to the plaintiff to prove the opposite, which she failed to do.

The judgment has also become final in the meantime because the plaintiff withdrew its appeal after being advised to do so by the Bamberg Higher Regional Court.

If you have any questions, please do not hesitate to contact us.

Dusseldorf, February 2022, 16 th

Author: Attorney at Law Dennis Wiegard