Contract law | LG on duty of disclosure when selling a house

Contract law | LG on duty of disclosure when selling a house

Contract law | In a judgment (Ref.: 11 O 92/20), the Coburg Regional Court determined the scope of the duty of disclosure in a real estate sale and dismissed a claim for rescission of a real estate purchase contract.

In the specific case, the plaintiff purchased a residential property from the defendant in 2018. In 1998, a double murder of a woman and her small child took place in the house. The defendant seller was unaware of the crime when she purchased the property in 2004 and declared the purchase contract avoided on the grounds of fraudulent misrepresentation and demanded that the contract be rescinded. In the plaintiff’s opinion, the defendant was obliged to point out the double murder without expressly asking. The value of the house had been reduced and it was difficult to sell, so that there was fraudulent misrepresentation.

However, the Coburg Regional Court dismissed the claim as the conditions for fraudulent misrepresentation were not met. On the one hand, the defendant had no duty to inform. Such an unsolicited obligation to provide information only exists if the contractual partner can reasonably expect to be informed accordingly. Although there may well be an obligation to draw attention to a crime committed there when selling a house, this obligation is not unlimited in time, as the significance of the event for the purchase decision decreases with increasing duration. In this case, there were more than 20 years between the crime and the sale of the house. Furthermore, the plaintiff had not been able to prove that the defendant had acted fraudulently. She herself only found out about the murders after buying the property and lived in the property for more than 10 years, which she said did not bother her. Accordingly, the double murder did not play a decisive role for the defendant in the sale of the property, so that it did not assume that the plaintiff would not have purchased the property knowing about the crime, which would have been a prerequisite for fraudulent conduct.

Source of information: Press office of the Coburg Regional Court, press release no. 3 dated 11.02.2022


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