OGH: Broker's Commission also Due in Share Deals

Jun 30, 2023 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has clarified that the sale of shares in a company can be a transaction equivalent to the sale of real estate and could therefore justify a broker’s commission.

Two cousins were limited partners and sole shareholders of a GmbH of a limited partnership (GmbH & Co KG, hereinafter KG). They wanted to sell the business of the KG together with its real estate. Therefore, they agreed with the plaintiff, a real estate brokerage company, that both the sale of the property and the sale of the business should be carried out within the framework of a share deal and that the plaintiff should receive the agreed commission for this. In the written exclusive agency agreement for the brokerage of the sale of the property, however, no more mention was made of the sale being part of a share deal.

The plaintiff advertised the property whereupon a potential purchaser contacted the plaintiff, intending to buy the company. The cousins subsequently assigned both their limited partner shares and the shares in the general partner GmbH to the purchaser. In the assignment documents it was agreed that a potential brokerage commission would be paid by the buyer.

The real estate brokerage company sued the KG and the general partner GmbH for the rendering of accounts and payment of its commission.

The court of first instance granted the request for accounting. A valid brokerage contract had been concluded between the KG and the real estate brokerage company. The contract of assignment was an equivalent transaction within the meaning of Section 6(3) of the Austrian Real Estate Agents Act (Maklergesetz), and therefore the commission was due.

The OGH confirmed this position:

From an objective point of view, the contract of assignment is actually equivalent to a sale of real estate in that the real estate is the main asset of the KG and, based on the contract of assignment, the financial power of disposal was transferred from the cousins to the buyer.

The fact that the KG takes over the commission for the assignment of the shares, which would actually have to be borne by the cousins, violates the prohibition of the return of capital contributions. Contrary to the opinion of the court of appeal, however, the plaintiff is not required to accept that this was null and void due to a violation of the ban on the return of capital contributions, because at the time of the conclusion of the brokerage contract, no violation of the ban was apparent.

OGH 6 Ob 24/23g (17.05.2023)