Broker’s commission to be repaid in full if § 656d BGB is violated
From 23 December 2020, a legal regulation will apply in Germany that is intended to provide better protection for private buyers of flats and single-family houses: § 656d BGB. It states that a buyer can only be obliged to pay the brokerage commission if the seller is also obliged to pay the same amount. This is to prevent the broker contract from being concluded with the seller only, but the costs being passed on in full to the buyer.
In the case decided by the Federal Court of Justice (BGH) (judgment of 21 March 2024 – I ZR 14/24), the plaintiffs bought a single-family house. The real estate agent had only concluded a brokerage contract with the seller. The exposé even stated explicitly: ‘No commission is to be paid for the buyer.’ Nevertheless, shortly before the notary appointment, the buyers signed a fee agreement with the real estate agent in the amount of €25,000. At the same time, the purchase price was reduced accordingly – an apparently purely ‘formal’ compensation.
The decision: agreement invalid in its entirety The Federal Court of Justice made it clear that the fee agreement violates Section 656d of the German Civil Code (BGB) and is therefore invalid in its entirety. A so-called ‘reduction preserving validity’, in which the agreement would be reduced to the legally permissible half (here: €12,500), is not an option. Otherwise, the purpose of the regulation, which is to effectively protect the consumer, could easily be undermined.
Consequence: Buyers have a full repayment claim against the real estate agent in the amount of €25,000.
What does this mean for buyers?
Buyers who have not concluded their own brokerage contract but are nevertheless required to pay more than half of the real estate agent’s commission can demand a full refund of their money.
This also applies if a corresponding agreement has been made voluntarily – the only thing that matters is whether it meets the legal requirements.
Conclusion: strengthening consumer protection The Federal Court of Justice’s decision sends a clear signal: violations of Section 656d of the German Civil Code render the entire payment agreement invalid. It is not possible to remedy this by reducing or reinterpreting the agreement to preserve its validity. Buyers should therefore carefully review every commission agreement – and seek legal advice if in doubt.