Anyone who buys a property has usually long since reconciled the fact that he then has to transfer a hefty sum to the agent. Nobody really likes to pay, but anyone who has found a suitable house or a nice apartment accepts the fee as an annoying fate. But the tense housing markets in the sought-after locations have now produced another fee option: for a “reservation fee”, brokers promise their customers that they will exclusively secure the property for a few weeks.
How widespread this bizarre form of profit maximization is is difficult to judge. In any case, the industry was waiting eagerly to see whether the Federal Court of Justice (BGH) would approve this new trick. Since Wednesday it has been clear: reservation fees are ineffective – the customer can demand their repayment if he does not buy.
The legal dispute was triggered by the planned purchase of a single-family house in the Dresden area. The client was interested, but couldn’t make up his mind so quickly, so he entered into another deal with his broker. For a reservation fee of 4,200 euros – after all, one percent of the purchase price – the agent promised to hold off the sale of the house for a month, exclusively in his favour. If it comes to sale, the amount will be deducted from the actual brokerage fee.
But in the end the deal fell through and the buyer who was unable to get it asked for his money back. The broker, on the other hand, remained stubborn and kept the money. If the customer signs an agreement about a reservation fee, then that is a question of private autonomy – a contract is a contract.
The Supreme Court saw it differently. In his view, such a reservation is not a separate contract, but merely an appendage to the original agreement with the agent. However, this puts the case on a legal track, which allows the BGH to review the content of the contract clauses. The law of the general terms and conditions applies, since it is about a power imbalance that needs to be compensated and about fairness that needs to be established between the contracting parties. That’s the job of the judges. Private autonomy must take a back seat.
The owner is not bound by the broker’s promise anyway
And here the result of the judicial examination was clear: A reservation fee serves almost exclusively the interest of the broker. According to the BGH, the prospective buyer does not have much of it for this reason alone. Although the broker can promise him the property exclusively, the owner is not bound by this. The customer therefore runs the risk of paying a not inconsiderable amount to the broker without ultimately being awarded the contract, said Senate Chairman Thomas Koch when the verdict was announced.
Another point: According to the BGH, such a fee puts pressure on the interested party to buy the property – because he does not want the money to be wasted. Ultimately, he is no longer free in his purchase decision. In addition, from the point of view of the court, the broker does not provide any really relevant consideration, at least in the specific case. The property should only be reserved for a month – it is unlikely that another buyer will slip through the fingers of the agent in this short period of time. In addition, the prospective buyer should not get the fee back even if he was not responsible for the failure of the purchase.
All in all, according to the BGH, the clause is inappropriate and ineffective. It also played a role that a fee without a purchase is equivalent to a non-successful commission – which, however, does not correspond to the typical model of the brokerage contract. Because it is characteristic of such agreements that payment is only made if the deal is concluded.
The question remains whether the Karlsruhe judgment actually puts an end to the fee system. Or whether there is still room to demand one or the other special payment from customers desperately looking for real estate. In any case, the BGH seems to be very clearly on the side of the prospective buyer. In 2010, he had already declared such a fee to be invalid, and when the verdict was announced, Senate Chairman Koch left the impression that the BGH would stick to this line in the future.
This is also indicated by the specific circumstances of the case: a whole year had passed since the brokerage contract was signed until the reservation fee was agreed, and a new document was also created for this purpose. Nevertheless, according to the BGH, this was not a separate contract – these were just formalities, said Koch. “This means that the fee agreement cannot be removed from judicial control.”