GER: What Condition Can Buyers Reasonably Expect a Flat to Be in?

Sept 6, 2024 Benn-Ibler Rechtsanwälte

When buying a property, it can happen that defects become obvious only after the fact. But not every defect in the property that you buy is legally a defect. In one of its most recent rulings, the German Federal Court of Justice (Bundesgerichtshof, hereinafter BGH) looked at what kind of condition buyers can reasonably expect to find a property to be in.

In the case at hand, the purchasers of a flat in the basement of an old building close to the Rhine River filed a lawsuit. They had bought the property in February 2018 for EUR 675,000. The building was built in 1905 and had been completely renovated in 1999, according to the estate agent’s advertisement. The property’s description also mentioned that there was damp damage to an external wall. The parties agreed in the contract that the renovation work would be done at the purchaser’s own expense. The contract also said: ‘The purchaser is buying the property in its present used state. Together with an expert and an architect, the purchaser has inspected the subject matter of the contract in detail. The parties do not agree on the condition of the subject of the contract.’

The buyers then arranged for the damage to the outside wall to be repaired. Unfortunately, however, the renovation work took longer to complete than had originally been estimated. As a result, the buyers still had to pay rent for their current apartment. They are now suing the seller of the old apartment for the rent they still paid, which is around EUR 33,000.

The previous courts had been in favour of the buyers’ claim for compensation. The apartment they had purchased corresponded to the usual and expected condition of a property built in 1904. The buyers’ claim was also excluded by the exclusion of liability.

The BGH, however, disagreed.

It is important to understand that not every small imperfection in an object can be legally considered a defect. For example, not every damp wall is actually a material defect. However, if the premises are to be used as a dwelling, potential buyers can assume that the property is habitable, even if it is in the basement of an old building.

According to the BGH, rooms in the basement of an old building with significant wall moisture at the time of the transfer of risk are usually unsuitable for the use provided for in the contract or for normal residential use and are therefore considered to be defective.

BGH V ZR 79/23 (21 July 2024)