Sellers of real estate must provide sufficient information about renovation obligations.

Sellers of real estate must adequately inform buyers about upcoming renovation costs. According to the Federal Court of Justice (BGH), simply placing documents in a virtual data room shortly before the planned conclusion of a contract without providing appropriate notice is not sufficient. The presiding judge of the fifth civil senate in Karlsruhe stated on Friday that only in exceptional cases is no disclosure necessary. This depends, among other things, on the agreements regarding the use of the data room and the importance of the information in question. (Case No. V ZR 77/22)

Specifically, it was about a case from Hanover and renovation costs in the millions. A company had purchased several commercial units in a large building complex for over 1.5 million euros. They feel deceived because they found out too late that high costs for the maintenance of the common property could come their way. Up to 50 million euros had been budgeted for the work.

The saleswoman had uploaded the minutes of an important homeowners‘ meeting into a digital data room three days before the contract was finalized. The buyer, who had reviewed the documents earlier, pointed out that the saleswoman should have informed her about it.

According to the Real Estate Association IVD, a detailed examination of all documents, also known as due diligence, almost always takes place before the sale of large properties. „Every buyer checks whether the property meets their expectations before making a purchase,“ explained Christian Osthus, Deputy Federal Managing Director of IVD at the time. Typically, this process is not organized or done through third parties. „This is actually only the case for larger transactions or if it aligns with the buyer’s customs.“