House purchase, notarized property purchase contract, exclusion of warranty, fraudulent misrepresentation
In a ruling dated 02.04.14 (ref. 18 O 402/13), the Regional Court of Cologne decided that in the event of leaks in the bathroom and damaged tiles and joints, it cannot be concluded without further ado that the seller acted fraudulently. As an exclusion of warranty had been agreed in the notarized contract, the claim of the plaintiff buyer for payment of damages was dismissed.
Facts:
The plaintiffs acquired a house plot in K from the defendant by means of a notarized purchase agreement on 17.08.2012. Section 3 of the purchase agreement reads as follows:
The object of purchase is sold in its current used condition known to the buyer. The buyer has inspected the object of purchase in detail.
The buyer’s rights due to a material defect in the property or building are excluded. The seller declares that he is not aware of any hidden defects of significance. Excluded from the exclusion of liability are claims arising from injury to life, limb or health if the seller is responsible for the breach of duty and other damages based on an intentional or grossly negligent breach of duty by the seller. A breach of duty by a contracting party is equivalent to a breach of duty by a legal representative or vicarious agent.
Work had already been carried out in the bathroom when the defendant owned the property. During the inspection that preceded the conclusion of the contract, the defendant answered the plaintiffs’ question about a visible stain in the cellar by saying that something had once leaked and a siphon had been replaced.
After handover and moving in, the plaintiffs discovered that the shower and bathroom area was leaking. Tiles and joints were damaged. The trades company involved stated that the damage had been present for some time due to incrustations in the area of the basement floor.
The plaintiffs claim that the walls in the bathroom are massively soaked and that renovation costs of € 5,084.95 would be incurred, which the defendant has refused to pay. They are claiming this amount in the present action. They believe that the repair work shows that the defendant was aware of the defect.
The plaintiffs request,
- order the defendant to pay the plaintiffs jointly and severally an amount of € 5,084.95 plus interest from the date of lis pendens;
- order the defendant to indemnify the plaintiffs as joint and several debtors from the payment of extrajudicial legal fees in the amount of € 339.75.
The defendant requested that
the action be dismissed.
It invokes the contractual exclusion of liability and claims that the defects complained of did not exist when the contract was concluded, and that only ongoing repair work had been carried out on the bathroom, which corresponded to the normal course of use. If leaking joints were the cause of the alleged moisture damage, this would also be recognizable to a layperson during an inspection.
Please refer to the written submissions and annexes exchanged between the parties for details of the facts of the case.
Reasons for the decision
(fraudulent misrepresentation when buying a house)
The action is admissible, but not justified. It is irrelevant whether the property sold has a material defect (Section 434 BGB). In any case, the defendant can invoke the contractual exclusion of warranty. Pursuant to Section 444 BGB, the seller may only not invoke the exclusion of liability if he has fraudulently concealed the defect or – which is not the case here – has assumed a guarantee for the quality of the item.
The prerequisites for the assumption of fraudulent conduct are not apparent. In the case of property purchase contracts, the seller has an obligation to disclose hidden defects or circumstances which, according to experience, indicate the emergence and development of certain defects, even without a specific request from the buyer, if these are circumstances which are important for the buyer’s decision, in particular if they are likely to significantly reduce the intended use. Such an obligation to disclose does not exist in the case of defects that are readily recognizable during an inspection. If only traces of a defect are recognizable during an inspection, without this allowing conclusions to be drawn about its nature and extent, a bona fide seller can be expected to at least disclose his level of knowledge. However, the incorrect answering of specific questions by the buyer in good faith (even if this is due to negligence) does not justify the accusation of fraudulent intent. Conditional fraud may exist if the seller provides incorrect information when questioned “in the blue” or if he provides trivializing information about facts that are not irrelevant (see Staudinger/Matusche-Beckmann, BGB, 2014, § 444, marginal nos. 44 f. with further references).
Based on these principles, fraudulent intent cannot be assumed. Insofar as the defendant, when asked about the stain in the cellar, stated that something had leaked and that a siphon had been replaced, it is not apparent that this was incorrect or that the information on the origin of the stain and its removal corresponded. For this reason, it cannot be assumed that the defendant made incorrect statements “out of the blue”. It may well be that the stain was related to a spontaneous damage event, such as a leaking siphon, which was then repaired. In any case, there must have been no connection between the visible stain and the moisture penetration of the bathroom alleged by the plaintiffs. Insofar as the plaintiffs claim that incrustations on the cellar floor indicate that the damage had been present for some time, it is not clear whether the defendant should have concluded from this that the bathroom wall was soaked. Finally, the plaintiffs themselves did not draw any conclusions from the obviously visible incrustations. Insofar as the plaintiffs believe that they can draw conclusions from the repair of the tiles in the past, this may have happened a long time ago and the defendants may have reasonably assumed that the repair measures were in order and did not give rise to any fear of damage. In any case, it is not apparent that purely superficial work was carried out with the intention of concealing a recognizable defect or the consequences of a serious defect.
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