The German Federal Court of Justice (BGH) will shortly be hearing a case concerning the duty of disclosure of a real estate seller during a due diligence investigation (V ZR 77/22). The focus is on the question of what responsibility the property seller bears for the provision of relevant information, particularly in the context of pre-contractual assurances about future financial obligations.
The specific case concerned the sale of several commercial units. In the purchase agreement, the property seller assured the buyer that no future special levies would be due, with the exception of a resolution to renovate the roof. Later, however, the buyer (the plaintiff) demanded a special contribution for maintenance and repair work on the common property in a considerable amount. The plaintiff then challenged the purchase agreement and demanded compensation. The Court of Appeal rejected the claims as, in its opinion, the property seller had not committed fraudulent misrepresentation and had provided correct information.
The proceedings before the BGH will now clarify the extent to which the disclosure obligations of real estate sellers apply to due diligence and whether the real estate seller has breached its obligations in this case. The ruling could have important implications for the real estate sector and negotiations in the run-up to a property sale.
Source and further information: bundesgerichtshof.de; AZ: V ZR 77/22
© Fotolia
