Germany update: Property developers: Beware of too “luxurious” sales brochures!

Circumstance

In sales prospectuses, property developers in particular often advertise with a “luxurious” or “exclusive” equipment of the properties to be sold. Frequently, these descriptions, which were initially created for distribution, are then (partially) the subject of the construction and equipment description in the sales brochures, which later becomes part of the actual developer contract.

In a case in which the words “luxury” and “exclusive” were apparently used in the prospectus (see OLG Düsseldorf, decision of 20.01.2022 – 22 U 184/21, facts according to Karczewski in IBR 2022, 574), it was disputed whether it was a defect that no underfloor heating was installed in the floor-level shower area of the central bathroom. The building specification stated: “The heating in the entire residential complex is provided by a gas condensing boiler and a diffusion-tight underfloor heating system is used as a heat transfer element”.

The expert commissioned by the court stated in this connection that there was a general “trend towards floor heating in the shower area”. According to the expert, this is standard in “luxury apartments”.

Decision

In the Court’s view, there was no defect. The interpretation of the contract is a matter for the court alone, whereas the role of the expert in the interpretation of the contract is limited to imparting the expertise relevant to the assessment (see on this and on the following Karczewski, IBR 2022, 574). Terms such as “luxury” or “exclusive” do not allow direct conclusions to be drawn as to whether a shower floor must be heated or not. The terms would be used inflationarily in advertising. An interpretation had to take place on a case-by-case basis. Accordingly, there was no defect here, because the building specification limited the laying of the underfloor heating to the actual “room surfaces”.

Practical note

Even if the present case once again ended “well” for the developer, it must be urgently pointed out that there are now a whole series of decisions in which courts have used the construction work owed by the developer on the basis of quality-describing advertising statements of the developer in brochures, exposés, etc. For example, the Higher Regional Court of Munich has decided (judgment of 24.04.2018 – 28 U 3024/17 Bau) that if apartments are advertised as “top-class city apartments”, the developer owes increased sound insulation, even if only a minimum sound insulation is agreed according to the expressly conflicting contractual agreement. Particularly noteworthy is also a decision of the OLG Frankfurt of 08.01.2014 (Az. 3 U 110/13). According to this, an apartment that is offered by a developer as high-priced, representative and high-quality equipped must have a parking space belonging to the apartment, on which “a vehicle of the upper middle class can be parked with usual effort”. If parking is only possible backwards and after repeated manoeuvring, there is a defect. This should apply even if the developer was not allowed to build a larger parking space under building law. The developer must also be aware that he can only free himself from quality features of a property, which he advertises in the prospectus, in the later notarial contract including building description with very clear and detailed “distancing notes”.

The article was first published in ImmobilienReport Metropolregion Rhein-Neckar issue 162

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

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

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