REALWorld Law

Sale and purchase

Seller's warranties

What seller's warranties are provided under statute in the sale of real estate in this country (for example, as to the state of the building, asbestos etc)?

Germany

Germany

Under statutory law, the seller must deliver the property free of any legal or physical defects. However, the seller's statutory liability for physical defects is often wholly or partially excluded. The buyer is then responsible for obtaining information which may affect the value of the property through careful due diligence. However, the seller has a statutory liability to provide valid title (which cannot be excluded).

In addition, the seller is responsible for disclosing any important matters which may have a negative impact on the property's value and are known to him but are not easily detectable through due diligence. Following a decision of the Federal Administrative Court from 15 September 2023, the seller can additionally be required to inform the buyer about all substantial circumstances that are recognizably of particular importance to the buyer and about which the buyer can demand information in good faith. This obligation can in particular arise if the buyer only has a short period to carry out due diligence or if the relevant information are provided at the end of the due diligence process. However, the scope of the obligation also depends on the expertise of the buyer and whether a legal or tech DD is carried out. If the seller fails to do this, then he will be deemed to have acted fraudulently. It is therefore common to include a clause in the sale and purchase agreement stating that, to the best of the seller's knowledge, there are no such defects.