GER: BGH on Reservation Fees for Estate Agents

May 26, 2023 Benn-Ibler Rechtsanwälte

According to the German Federal Supreme Court (Bundesgerichtshof, hereinafter BGH), an obligation of an estate agent’s client to pay a non-performance-related reservation fee agreed upon in the General Terms and Conditions (Allgemeine Geschäftsbedingungen, AGB) is invalid. This also holds true if the reservation fee was not explicitly agreed upon in the actual contract but rather in a separate agreement.

In the case at hand, the plaintiffs were intending to purchase a piece of land with a single-family house that had been brokered by the defendant real estate agent. The parties first signed a brokerage contract and then a reservation contract. In the latter, the estate agent promised not to sell the property to any other party for one month in return for payment. In the event of a purchase, payment was to be offset against the agent’s commission. However, the plaintiffs decided against the purchase. The plaintiffs, who were the original prospective buyers, now demanded repayment of the reservation fee.

The district court ruled in favour of the estate agent and dismissed the appeal. The reservation agreement was effective. It constituted an independent agreement with main performance obligations not subject to a legal check under Sections 307 et seq. of the German Civil Code (Bürgerliches Gesetzbuch, hereinafter BGB).

The BGH, however, disagreed as follows:

The reservation agreement is subject to a legal check against BGB standards because the arrangement made was not an independent agreement, but rather a provision supplementing the brokerage agreement.

According to the BGH, the fee was unreasonably disadvantageous to the customer and thus void. The reason for this is that the clause excludes without exception a repayment of the reservation fee. Also, the reservation contract does not result in any advantages for the client, nor does the agent have to provide any monetary consideration. A reservation contract can be compared with a no-success-fee contract, which contradicts the guiding principle of legal regulations for brokerage contracts. A commission is only due if the agent’s performance has produced a successful outcome. Accordingly, the estate agent is obliged to repay the reservation fee.

Press Release No. 070/2023 on BGH, I ZR 113/22 (20.4.2023)