Higher Regional Court of Frankfurt am Main, 06/03/2014, Ref.: 1 U 114/12
Before a property is sold, a property and/or building valuation is usually carried out, in the course of which the market value within the meaning of Section 194 BauGB is determined by an expert. Both the buyer and the seller can arrange for such an appraisal to be carried out.
However, the contract is only concluded between the valuer and the client and does not generally have a protective effect. This must be expressly stipulated in the contract and can become particularly relevant if construction defects occur after the sale under exclusion of warranty that have an impact on the market value of the property. This is because the purchaser is faced with the question of whether the expert can then be called upon.
In the above-mentioned judgement of the Higher Regional Court of Frankfurt am Main, the court had to decide on appeal whether the market value appraiser was liable to the buyer for construction defects.
Facts of the Case On 10 February 2006, the plaintiff purchased a property with four older buildings from Mr Z1 for € 300,000. Before concluding the purchase agreement, Mr Z1 had obtained a market value appraisal from the second defendant, which showed a total value of € 327,000 and a land value of € 254,000.
Mr Z1 had given this expert opinion to the plaintiff. The property purchase agreement contained an exclusion of warranty. In the course of renovation work carried out after the purchase, the plaintiff complained of considerable moisture damage to the house after the removal of a false ceiling and other fixtures, which he then made the subject of independent evidence proceedings.
The expert working there established that there was indeed considerable moisture damage as a result of a leak in the shed roof and various structural defects, particularly in the area of the roof truss, on an external wall and on the staircase. He estimated the costs of remedying the defects at € 56,500, the claim.
The plaintiff claimed against the first defendant as heir to the seller, who had died in the meantime, on the grounds that the seller had fraudulently misled him about the moisture damage. According to the plaintiff, the second defendant was liable to the plaintiff for the same amount due to the incorrectness of his market value appraisal.
The Regional Court initially dismissed the action. On appeal to the Frankfurt am Main Higher Regional Court, the plaintiff continued to pursue his claim.
Higher Regional Court Frankfurt am Main: The Higher Regional Court of Frankfurt am Main also disagreed with the plaintiff and dismissed his appeal.
Insofar as the action is directed against the first defendant as the seller's sole heir, it is unfounded because the plaintiff is unable to provide evidence of the alleged fraudulent misrepresentation regarding the various construction defects required due to the exclusion of warranty. In this respect, more detailed reasons and offers of evidence would have been required as to why the selling testator, who did not live in the house, should have known about the moisture damage.
It could be assumed in the plaintiff's favour that the testator had denied the question of moisture damage. This would have corresponded to the statement in the purchase contract that he had no knowledge of hidden defects. However, as the deed of sale did not contain any specific agreement on the integrity and dryness of the building fabric, but did contain an agreement on the exclusion of warranty, a warranty could only be considered if the testator had known that his answer was incorrect. The plaintiff was, as stated, in need of proof in this regard, but had not provided the necessary evidence.
The action was also unfounded with regard to the second defendant. The appraisal contract concluded between the testator and the second defendant did not have any protective effect in favour of the plaintiff.
The parties to the appraisal contract would be free to agree or exclude protection in favour of third parties - possibly by implication. The latter was clearly the case here. The contract at issue stated:
"The determination of the market value serves to inform and guide the owner's decision-making".
Accordingly, the parties to the appraisal contract had not agreed to pass on the expert opinion as a "sales aid".
Even if the appraisal contract were to be deemed to have a third-party protective effect in favour of the plaintiff as a prospective buyer, the action would be unfounded in the absence of a proven breach of duty on the part of the second defendant.
With regard to the heating system, the expert opinion of the second defendant was not incorrect, but without any statement. He had clearly stated in the expert opinion that he had not checked the functionality of the technical systems, in particular the building services.
With regard to the "ongoing maintenance" of the residential building and the building fabric described as "good", the plaintiff rips individual words out of the context of the expert opinion and overinterprets them. The second defendant described the structural condition of the house as "average with older modernisations" and disclosed that he had only inspected the rooms. The plaintiff could therefore not simply rely on the fact that the second defendant had inspected the roof of the residential building and the sealing of its exterior walls from the outside.
The question of which tests the second defendant owed to his client, the selling testator, and which tests the plaintiff - as an assumed protected third party - could therefore assume, was essentially a question of law, in this case a question of contract.
The third party only enjoys protection to the extent of the assignment given to the expert. The mandate given to a valuation expert does not regularly extend to the search for hidden construction defects.
Source: OLG Frankfurt am Main
Important Note: The content of this article has been prepared to the best of our knowledge and belief. However, due to the complexity and constant evolution of the subject matter, we must exclude liability and warranty. Important Notice: The content of this article has been created to the best of our knowledge and understanding. However, due to the complexity and constant changes in the subject matter, we must exclude any liability and warranty.
If you need legal advice, feel free to call us at 0221 – 80187670 or email us at info@mth-partner.de.
Lawyers in Cologne provide advice and representation in tenancy law.