Pulled out of apartment in Germany

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gebbel

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My brother signed legal documents for the purchase of an investment apartment in Frankfurt 2 months ago. No deposit was paid, as is the norm there. The estate agents responsible for the sale also undertook to find tenants for the property. 3 weeks ago, they informed my brother that they had yet to find tenants. They said that they had dropped their fee (2 months rent) to make it more appealing to people to rent the property. A week later they still could not find anyone.
At this point my brother got cold feet and informed them that he was pulling out, on the grounds that it looked like the apartment could not be easily rented. The Germans said that he could not pull out, as he had already signed up. My brother apologised but insisted that the deal was off.
My question is this: have they any avenue to sue my brother for breach of contract? He thinks not but I would have concerns that he cannot just walk away like that. By the way my brother is Irish but lives in London,
Any advice appreciated
 
The language barrier is a problem. He employed the services of an interpreter at a cost of €400 when signing the contracts. He has not returned to Germany since, all contact has been via phone. Maybe I should advise him to contact a property law solicitor there?
 
Maybe all that matters is what law is applicable to him in England and whether German law can be enforced on your brother in England or back home in Ireland ?

Germany is a funny place regarding English and I would think with a low language barrier.
I remember an English comedian (with a Toffs accent) putting on a show in a public square in Frankfurt and families with children and grannnys etc standing around and laughing at the jokes which were all in english. They all got the joke. So my reasoning is that it has one of the lowest language barriers for an English speaker especially if you are dealing with someone who is educated.


If the contract is translated into English then is it not decided in the contract what happens in the case of one party pulling out of the deal ?
 
Your brother should immediately obtain legal advice from someone knowledgable in german law. Whether he is bound or not depends on what he signed and german law.

If it is binding then it may be fairly easy for the vendor to sue him ,where he can sue him ie in a German court or in the Uk or Ireland and under what laws ie German or English or indeed Irish will also be dependent on the content of the documents he signed and also the various Conventions which govern these issues,i.e the Brussels Conventions ,the Rome Convention etc.. If they have the right to sue him and get judgement against him,say in Germany,that will be legally enforceable in the Uk and here so if he has assets he could be in trouble.In other words Europe(or at least the EU) is a very small place these days so he would be foolish to assume this will go away if he ignores it.A german lawyer should be able to tell him straightaway. He might find someone based either here or in the uk who specialises in foreign transactions to help him out.
 
If the contract obliges him to purchase (and I suspect it does), he'd be foolish to try and just walk away. German companies dealing with the public are well known for chasing up on bad debts. They generally sell the bad debts on to a debt collecting agency quite quickly. The agency then hikes a huge fee on to the debt and persues the debtor using all available instruments of the law. These "debts" can often be when someone tries to break out of a fixed term contract for, say, gym membership or mobile phone subscription. I.e. they haven't actually run up debts but are refusing to make future payments on a contract they no longer wish to honour.

If they are so quick to persue small contracts, I'd imagine they'd be very quick to persue something as big as apartment purchase. And for something that size I'm sure they can take action against you anywhere in the EU.

Regarding the agency fee, it's quite common in Germany that EAs charge the tennant (not the landlord) a fee equal to two or three months rent in order to move into a rental property. If the EA says they're dropping this fee, I'd give them a bit more chance to try and find a tennant.
 
Persius said:
If the EA says they're dropping this fee, I'd give them a bit more chance to try and find a tennant.
Click to expand...

He did give them more time when they told him they were dropping the fee. 2 weeks later, he called them and they said they still had nobody. The EA had posted the details on the German equivalent of Daft. At this point, my brother got cold feet. He imagined a situation where he had just bought an unrentable apartment, even though he thought the area was fine when he was over there. Thinking then that it could be more trouble than it`s worth, he called them to say he was not proceeding.
That was last Wednesday. He has heard nothing since. From what I am reading here, he would be foolish to think it will just go away.
 
What your brother has signed was almost certainly the contract of sale. The reason you don't pay a deposit in Germany is that generally this is the first and only thing you ever sign. The notary then registers the sale with the relevant public offices and makes sure the seller owns the property/hasn't sold it to anyone else/doesn't owe money on it etc etc. When this is sorted, you pay the price of the property to the seller, who then advises the notary again, who in turn arranges for the transfer of ownership to be completed in the public land registry (Grundbuch).
The trouble with this system for your brother, as I see it, is that once he has signed this contract, he is legallylly the new owner of the property, and if he tries to stop/unpick the process described above without good reason he would be likely to be sued. And not finding tenants within a few months would not be considered a big deal in Germany.
It is a terrible cliche, but the Germans are real sticklers when it comes to their beloved rules and regulations ( I shoiuld know as I am one myself!). I have found, though, that if one just pleasantly refuses to comply - in a kind of "I'm very sorry for your trouble, but no, I won't do that" way - they are often baffled to the degree that they will lay off you. They are not used to dealing with people who are not terrified of rules.... Good luck!
 
I bought an apt in Berlin & like other poster said, I signed contracts first & then paid in full. No deposit was required.

It took a few months to get it rented, but then I was renovating too as it's an old but beautiful apt. It is rented now however & I've no probs.

However, I just wanted to add one thought. In Berlin tenants tend to stay longterm when they find an apt they like. Tenant has to furnish so it makes sense that they might not rush into renting. Upside of this is that when you do get a tenant they don't chop & change that much. I'm assuming it's the same in Frankfurt. Perhaps your brother should have a bit more patience. Two months is not a long time really & unless it's in a dire area most people would see Frankfurt as a good city for investment
 
usual notice period in Germany is 3 months or 6 months so tenants might be reluctant to book an apartment available immediately as they might have give 3 months notice at their current apt.
 
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