Germany updates

Projects, Construction & Infrastructure

New Schedule of Services and Fees for Architects and Engineers approved
  • Germany
  • 22 July 2013

The Cabinet recently approved the draft of a 2013 revision of the Schedule of Services and Fees for Architects and Engineers. The central element of the seventh amendment of the schedule is the revision of the areas of performance and an increase in the table values of the schedule.

Architect's obligation to determine client's budget and comply with cost framework
  • Germany
  • 24 June 2013

Two recent rulings highlight the importance of careful documentation of the ideas behind costs and cost limits. Architects and clients are advised to urgently carry out and document a prior calculation of costs. If there are any later planning changes which change the costs, it is important that these changes be documented in order to refute any allegation of a breach of obligations.

Contractual penalty provision null and void
  • Germany
  • 25 March 2013

The Federal Court of Justice recently ruled that a contractual penalty provision in a client's general terms of business which fixed a contractual penalty payable for culpably exceeding an interim deadline at no more than 5% of the total order sum was null and void. The ruling means that in any contractual penalty provision for interim deadlines, the upper limit must be based on the amount that has been earned up to that point only.

New act targets delayed payments in building contracts
  • Germany
  • 07 January 2013

The new Act to Combat Delayed Payments in Business Transactions, which is now in the consultation stage, will force clients to check and pay invoices from contractors more quickly in future. If they fail to do so, the financial costs arising from the delay will increase. It will also be easier for a contractor to enforce costs arising from the recovery process.

Court rules that contractual penalty provision is null and void
  • Germany
  • 29 October 2012

The Brandenburg Higher Regional Court recently ruled that a contractual penalty provision stipulating that the contractor must pay 0.2% of the net invoice amount for each working day of any delay, up to a maximum of 10% of the net invoice amount, in the general terms of business of a client places the contractor at an unreasonable disadvantage and is therefore null and void.


Real Estate

Liability of party without power of attorney for wasted contract costs
  • Germany
  • 21 June 2013

Land purchase contracts are often concluded by representatives without a power of attorney acting for one or even both parties. However, this is inadvisable. The standard land purchase contract normally includes a provision on who must pay costs. A recent decision shows that ideally, an explicit agreement about the liability for the costs of the notary should be made outside the notarised contract in case approval is refused.

Land defective if contaminated water flows through residential plot
  • Germany
  • 14 June 2013

The Federal Court of Justice recently ruled that a plot of land used for residential purposes has a material defect if underground water contaminated with toxic substances flows through it. The court stated that the land was defective because it was adjacent to a contaminated plot, which emitted pollutants via underground water. It considered that the toxic substances involved dangers which a purchaser would not normally accept.

Revision of landlord and tenant law: content and progress
  • Germany
  • 22 March 2013

Parliament recently voted to adopt the draft of the Tenancy Law Amendment Act. The proposed changes will apply immediately to all rental contracts as soon as they come into force. Measures for energy-efficient modernisation have been defined for the first time and are set to be integrated into other laws. Current court proceedings and enforcements should be reviewed to see how these revisions can be used to good effect.

Can an online advertisement act as a binding offer to conclude an agency contract?
  • Germany
  • 04 January 2013

The Federal Court of Justice recently decided that an online advertisement by an estate agent constituted a binding and sufficiently defined offer for the conclusion of an agency contract. This decision is particularly surprising as, until now, the court had not regarded an internet advertisement as a binding offer and the court placed far lower demands on the clarity of commission compared with its previous case law.

Vendor must be informed of property defect before accepting offer
  • Germany
  • 26 October 2012

In a recent decision the Federal Court of Justice decided that if the offer by the purchaser and acceptance by the vendor are notarised separately in a property purchase contract, the time when the purchaser is assumed to be aware of a defect is not the time of acceptance, but rather the time of notarisation of the offer.


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