10. Oct 16

BGH: Possible to withdraw from brokerage contracts concluded by email

It has since become common for contracts with real estate brokers to be concluded online or by email. It is possible to withdraw from these contracts provided the statutory notice periods are observed.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: The property market made its way onto the internet quite some time ago. Accordingly, real estate agents are increasingly showcasing their offers online. One consequence of this is that more and more contracts are being concluded as long-distance transactions, e.g. by email. In two rulings from July 7, 2016, the Bundesgerichtshof (BGH), Germany’s Federal Court of Justice, held that it is possible to withdraw from these contracts within the statutory notice periods (Az.: I ZR 30/15 und I ZR 68/15).

The cases were similar. Real estate agents had advertised properties on their website. Potential buyers then got in touch and the brokers sent them a memorandum that included the amount of brokerage commission but no guidance on the right of withdrawal. Viewing appointments were eventually arranged and the potential buyers decided to purchase the properties. However, notwithstanding the successful transaction, they did not wish to pay the brokerage commission. Instead, they withdrew from the brokerage contract.

The BGH found in favour of the buyers, stating that the withdrawal had been effective and the brokers were not entitled to commission due to the fact that the brokerage contracts had been concluded by email before viewing the properties. The Court ruled that they were therefore to be treated as distance contracts, which meant that the clients had a right of withdrawal. Since the brokers failed to provide the clients with any guidance regarding the right of withdrawal, this right was said to have been exercised in due time. In cases involving distance contracts, consumers have the option to withdraw from the contract within a period of 14 days as a matter of principle.

When it comes to acquiring real estate, there is always a lot of money involved. From financing the purchase or construction of a house, a lot of things need to be planned in detail if one is to avoid a rude awakening at a later date. Lawyers who are versed in the field of real estate and property law can advise on all matters pertaining to real estate. This is true not only in relation to acquiring property but also, for instance, in the event of construction defects, or if properties are bequeathed or sold.

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