German BGH on Pre-Negotiated Brokerage Agreements

Dec 12, 2025 Benn-Ibler Rechtsanwälte

The German Bundesgerichtshof (hereinafter BGH) recently had to consider whether a brokerage agreement negotiated in advance between a project developer and a brokerage agency could still be subject to review under the German Law on Standard Terms and Conditions if homebuyers later entered into this agreement automatically.

Pre-negotiated brokerage agreements

In the case at hand, the developers of a holiday apartment complex established an operational strategy whereby all units would be leased to vacationers for a period of ten years via a single agency. To facilitate this arrangement, the project development company executed a brokerage agreement with a fixed ten-year term on behalf of the prospective purchasers. Upon acquisition of their respective apartments, buyers were automatically entered into this agreement.

After acquiring their apartment, an owner proceeded to terminate the contract. The lower courts issued divergent rulings: the Regional Court found the termination to be invalid, while the Higher Regional Court determined it to be valid. The BGH has subsequently upheld the validity of the termination.

Do terms and conditions still apply with a negotiated contract?

The primary issue concerned whether the brokerage agreement should be classified as general terms and conditions (GTCs), thereby warranting content review. Despite individual negotiations between the project developer and the broker regarding contract clauses, the Federal Court of Justice determined that these provisions functioned as GTCs with respect to subsequent purchasers. This conclusion was based on the significant number of affected apartment buyers and their lack of bargaining power; the terms were essentially non-negotiable and designed to be integral to the overall investment structure.

When examining the general terms and conditions, the BGH found issues with conflicting rules about contract duration and termination. These contradictions failed to meet transparency standards and unfairly disadvantaged buyers. As a result, the owner‘s termination was upheld.

BGH III ZR 165/24 (13 November 2025)