Germany Update: Missing remuneration agreement when placing an order: The minimum rates of the HOAI 2013 are applicable to old contracts

The European Court of Justice (ECJ) ruled at the beginning of this year that the minimum rates provided for in the HOAI 2013 can still be applied between private individuals to contracts concluded before 01.01.2021. This applies despite the breach of the minimum rates of European law. It was, therefore, to be assumed, after that judgment, that the national courts would continue to take into account the mandatory pricing law of the HOAI 2013 for old contracts. This has now been confirmed in one case with the judgment of the Higher Regional Court of Hamburg of 22.04.2022 (Az: 8 U 78/19).

Circumstance

In 2014, the client (hereinafter referred to as the AG) commissioned an architect with planning services. Initially, the parties agreed only orally, without determining a specific remuneration. A written contract was concluded later. In this written contract, the parties agreed on a lump-sum remuneration that was below the minimum rates of the HOAI 2013. After termination of the contract, the architect then sued the CLIENT for payment of the remaining remuneration on the basis of the minimum rates of the HOAI 2013 (so-called top-up action). The defendant claims that the reliance on the minimum rates is contrary to European law and contrary to good faith.

Decision

The court basically agreed with the architect! The architect could demand a fee based on the minimum rates of the HOAI 2013.

The architect is not obliged to settle on the basis of the lump sum fee agreed in writing later. According to § 7 (5) HOAI 2013, the minimum rates apply unless the parties have agreed otherwise in writing when placing the order. The architect’s contract was already concluded verbally before the written contract and without agreement on a specific remuneration. Thus, when (orally) the order was placed, there was no written agreement deviating from the minimum rates.

In addition, the remuneration on the basis of the minimum rates is not contrary to European law. The court refers to the decision of the ECJ, according to which the minimum rates of the HOAI 2013 could in principle continue to be applied to old contracts, even if the minimum rates would violate European law.

Nor are there any other national rules which would militate against the application of the minimum rates in this case. In particular, the architect did not act contrary to good faith by first having made a fee agreement and now relying on the (higher) minimum rates. In the event of contradictory conduct on the part of the architect, a breach of good faith exists only if the client has relied on the effectiveness of the agreement and has arranged himself in such a way that the payment of the difference between the agreed fee and the minimum rates cannot be expected of him in good faith, because it would mean a particular hardship for him. That is not the case in the present case. Unreasonable consequences are not recognizable. In particular, the client continues to be left with a sufficient rental yield.

Practical tip

In principle, the decision was to be expected in view of the previous decision of the ECJ. However, the case has a special feature, since the court also applied the minimum rates when placing the order due to the lack of a written remuneration agreement. In the new HOAI, the so-called basic fees apply in the event that no or no effective fee agreement has been made in text form. In contrast to the HOAI 2013, it is no longer important that the remuneration agreement is concluded “when the order is placed”.

By Miriam Modesto, MELCHERS, Germany, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact germany@transatlanticlaw.com

Disclaimer: Transatlantic Law International Limited is a UK registered limited liability company providing international business and legal solutions through its own resources and the expertise of over 105 affiliated independent law firms in over 95 countries worldwide. This article is for background information only and provided in the context of the applicable law when published and does not constitute legal advice and cannot be relied on as such for any matter. Legal advice may be provided subject to the retention of Transatlantic Law International Limited’s services and its governing terms and conditions of service. Transatlantic Law International Limited, based at 42 Brook Street, London W1K 5DB, United Kingdom, is registered with Companies House, Reg Nr. 361484, with its registered address at 83 Cambridge Street, London SW1V 4PS, United Kingdom.