Background
A real estate broker advertised a rented two-family house in Berlin. The property contained two self-contained apartments, each with its own entrance, kitchen, bathroom, and assigned basement space. Both units were rented to separate tenants. On September 12, 2021, a prospective buyer entered into a brokerage contract providing for a commission of 6.55% of the total purchase price, including value-added tax.
The buyer purchased the property for €675,000 under a notarized agreement dated April 7, 2022, which described it as a two-family house. The broker invoiced €41,445 after crediting a €6,750 reservation fee. The Berlin Regional Court entered judgment for the broker and maintained that judgment after the buyer objected. The Berlin Court of Appeal rejected the buyer’s appeal, and the buyer sought review in the Federal Court of Justice.
The Court’s Holding
The Federal Court of Justice dismissed the buyer’s appeal and upheld the broker’s claim for the agreed commission. Section 656c of the German Civil Code requires equal commission obligations when a broker acts for both parties to the purchase of an apartment or single-family house, and makes a noncompliant brokerage contract invalid. That rule did not apply here because, when the brokerage contract was made, the property objectively appeared to be a two-family house and the buyer had not made a contrary intended use known to the broker.
The Court clarified that an objectively multi-family property can nevertheless qualify as a “single-family house” under Sections 656a through 656d if the buyer intends it to house the members of one household and the property’s characteristics make that use plausible. Here, a single-household use was plausible because the property’s total living area was approximately 140 to 160 square meters. But where that purpose is not apparent from the objective circumstances, the buyer must communicate it no later than formation of the brokerage contract. Statements allegedly made during later viewings or a later telephone call were legally irrelevant because subsequent circumstances cannot retroactively invalidate brokerage agreements that were valid when concluded.
The smaller apartment was not merely ancillary: even under the buyer’s figures, it occupied at least three-sevenths of the total living area. The two full apartments, their separate tenancies, the online listing, and the notarized deed therefore supported treatment of the property as a two-family house. Because the buyer did not show that he disclosed a single-household purpose when entering the brokerage contract, the statutory equal-division rule did not defeat the broker’s commission.
Key Takeaways
- An objectively multi-family house may qualify as a single-family house for German brokerage-commission rules if the buyer intends to use it for one household and that use is objectively plausible.
- If a single-household purpose is not apparent from the property or other circumstances, the buyer must make that purpose recognizable to the broker no later than formation of the brokerage contract and must plead and prove that disclosure.
- Disclosing the intended use only during a later viewing or conversation does not retroactively trigger Section 656c or invalidate an otherwise valid commission agreement.
Why It Matters
The decision makes the timing of disclosure decisive when buyers seek the protection of Germany’s commission-sharing rules for properties marketed as multi-family homes. Buyers considering conversion to single-household use should notify the broker before or when entering the brokerage contract, including when contracting through an online portal.
The ruling also gives brokers a workable point at which to assess whether their agreements with buyer and seller must carry equal commission obligations. A broker informed in time can adjust the seller-side arrangement, negotiate new agreements, or decline to contract with the prospective buyer.