In its ruling of September 15, 2023 (V ZR 77/22), the BGH illuminates the scope of the disclosure obligations of real estate sellers. He makes it clear that in circumstances that require disclosure, the short-term posting of documents in the data room without further information does not constitute disclosure.
I. Facts
The case involved the sale of several commercial units within a commercial and residential complex. The seller gave the buyer access to a virtual data room with information about the property. A few days before the purchase agreement was concluded, the seller placed a collection of WEG resolutions in the data room. One of these resolutions revealed that extensive structural measures on the shared property amounting to up to €50 million had already been decided. These costs were not covered by the maintenance reserve. In the purchase contract, the seller assured that, to his knowledge, there were no extraordinary renovation measures imminent that were not covered by the maintenance reserve. The buyer later declared that he was contesting the purchase contract due to fraudulent deception (Section 123 Para. 1 BGB).
II. BGH decision
The BGH left the question of fraudulent deception open, but awarded the buyer a claim for damages according to Section 280 Paragraph 1, Section 311 Paragraph 2 No. 1, Section 241 Paragraph 2 BGB. The seller breached his pre-contractual obligation to provide information. According to the BGH the planned construction measures amounting to €50 million are a circumstance that requires disclosure and which the seller should have clarified without being asked. It was not enough that this information came from the data room. In principle, when the buyer carries out due diligence, the seller fulfills his obligation to provide information regarding circumstances that require disclosure by placing relevant documents and information in the data room. However, this is only possible to the extent that he can have a legitimate expectation that the buyer will also gain knowledge of the circumstance requiring disclosure by inspecting the data room . The seller could not have had this expectation here, as the corresponding decision about the planned extensive construction work was only posted in the data room shortly before the purchase was completed.
You can read the BGH ruling at here.
III. Practical tip
The BGH ruling makes it clear that even if due diligence has been carried out by the buyer and documents on circumstances requiring disclosure are available in the data room, a breach of duty and consequently liability on the part of the seller can still exist. In practice, real estate sellers should therefore always pay attention to the following:
Clarification as to whether and by whom the buyer has due diligence carried out
Early structuring and organization of the data room
Clear formulations of relevant (liability) agreements in the purchase contract
We would be happy to help you carry out the due diligence and draw up the property purchase agreement.
