New brokerage regulation for real estate business in Germany

On 23.12.2020 the new brokerage law came into force in Germany.

One may argue if it is useful to change a practice that has been practiced for years and works well, and whether this will not rather lead to an increase in the price of the offered properties or actually relieve buyers as intended by the lawmakers. We'll see, what happens.

What has changed?

Besides the modernization of the terms - the old-fashioned "Mäkler" becomes "Makler" - there are the following changes:

Formal requirement: (§ 656 a BGB)

• Brokerage contracts concerning an apartment or a single-family house now require text form contracts concluded only orally no longer meet the form requirements. It needs at least a confirmation by email. In fact, this is likely to have already been done in most cases.

Division of commission: (§§ 656 b-d BGB)

• Scope of application: If the buyer is a natural person and the broker is an entrepreneur, the rules for the new mandatory fee splitting apply

• Commission sharing: the commission must be shared equally between the buyer and the seller. It is inadmissible to waive the commission to one part.

• Maturity of the comission: This is the an interesting part of the regulation, which should help enforcement and at the same time will entail a lot of administrative work for real estate agents. When the brokerage contract was only done with the seller, the commission claim against the buyer becomes due only after the seller has paid his commission. So the broker will in some cases have to proof to the buyer, that the seller has paid his part of the commission. When both parties have made a brokerage contract with the broker, the commission is due how it is stated in the brokerage contract, typically after signing of the purchase contract.

From when does the regulation apply?

The law came into force on 23.12.2020.

What about brokerage contracts concluded before 23.12.2020?

The law does not refer to the date of the purchase contract of the property but to the brokerage contract and only concerns brokerage contracts concluded after 23.12.2020. Old brokerage contracts can therefore still be processed according to the old regulation, regardless of when the notarization of the purchase occurs.

Feel free to contact me on any questions about this topic!

The bill together with the justification can be found here (in German): https://www.bmjv.de/SharedDocs/Gesetzgebungsverfahren/Dokumente/RegE_Verteilung_Maklerkosten.html

Publication in the Federal Gazette here: http://www.bgbl.de/xaver/bgbl/start.xav?startbk=Bundesanzeiger_BGBl&jumpTo=bgbl120s1245.pdf

update 7.2.21