OGH: Failure to Disclose Relationship Forfeits Commission

Feb 21, 2025 Benn-Ibler Rechtsanwälte

In a recent ruling, the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has made it clear that estate agents lose their entitlement to a commission if they fail to disclose in writing and in good time any close family or business relationship they may have with the seller.

In the case at hand, a property was sold by an estate agency. The buyer was not informed that the manager of the estate agency was the half-brother of the beneficial co-owner of the property. The buyer inspected the property in May 2021, made a purchase offer and signed the purchase contract in June 2021. It was only after the purchase that she accidentally learned of the family connections between the manager of the estate agency and the former partner of the seller. The estate agent had not mentioned his close relationship with the seller in the advertisement or in any other way. As a result, the buyer was in court claiming a refund of her estate agent’s commission.

The OGH clarified that estate agents are obliged to disclose any close family or business relationship with the contracting party if this could impair protection of the buyer’s interests, pursuant to Section 6(4) of the Austrian Brokers Act (Maklergesetz, MaklerG). This applies not only to direct family relationships, but also to close personal relationships. In the case at hand, the relationship was between the manager of the brokerage firm and his half-brother’s partner. Since the brokerage firm had not disclosed this information in writing before concluding the brokerage contract, there was no entitlement to a commission.

The OGH thus upheld the decisions of the lower courts and ruled that, in the event of a breach of the duty of disclosure, any commission already paid can be reclaimed as an unjustified payment.

OGH 3 Ob 201/24s (27 November 2024)