DE: Failed property purchase - "reservation fee" to be refunded

Dec 8, 2021 Benn-Ibler Rechtsanwälte

The Regional Court of Cologne had to decide whether a "reservation fee" paid to secure the purchase of a property must be refunded if the purchase contract is not concluded.

In the present case, the defendants had offered a property to build a house for sale. After an inspection by the plaintiff, the parties agreed on a purchase price of EUR 1.2 million and a "reservation fee" of EUR 10,000. After signing the "reservation agreement" formulated by the plaintiff himself, the plaintiff transferred EUR 10,000 to the defendants' account. The reservation fee was to be deducted from the purchase price upon conclusion of a purchase agreement or forfeited in favour of the seller if no purchase agreement was concluded at the agreed price by 31 December 2018. In February 2019, negotiations finally failed due to a lack of building permit. The plaintiff then demanded the return of the "reservation fee" paid, arguing that the agreement was invalid due to the agreement being inapplicable.

The Regional Court of Cologne now awarded the plaintiff a claim for repayment of the "reservation fee". The claim arises from the purpose of the agreement being unable to be achieved. The basis of the payment (“Leistung”) is an agreement on a purpose, in this case the "reservation agreement", which, although it does not give rise to a claim to the receipt of payment, constitutes the legal basis for the right to retain the payment until the purpose has not been met. In this respect, the claim is based on the idea that the future occurrence of a particular outcome deviating from the mere fulfilment of an obligation can be agreed as a reason for retention. This must then also apply to a future obligation that has not arisen. The "reservation agreement" is ineffective here. Just like the purchase contract for the property, it would have required notarisation. In the opinion of the Regional Court, the decisive factor is whether the "reservation agreement" should "stand and fall" with the purchase agreement according to the intention of the parties, i.e. whether there is a legal unity between the purchase agreement and the "reservation agreement". Furthermore, there is a need for form if disadvantages are foreseen in case of non-sale and thus an obligation to contract is exercised. At EUR 10,000, an amount had been reached that already exerted an indirect compulsion to purchase.

LG Cologne, 2 O 292/19 (26.08.2021)