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Does the (gloomy) past of a house constitute a material defect?

17. February 2022
From Probandt
Reading time: ca. 2 Minuten

Everyone knows from stories and scary movies the importance for the assessment of the value of a building if terrible things, such as a murder, have happened in the building in the past. In the genres addressed, it is assumed that these events will continue to have an effect and can therefore have a negative impact on the later occupants of such a house.

The buyer of a house must have thought and felt similarly when she learned that a woman and a child had been murdered in a building she had purchased 20 years earlier. In any creepy shocker, the logical consequence would be that either the victims of that time are still up to their mischief today, or at least the dark aura of the house exerts a negative influence on the later inhabitants. After the buyer learned of the crime, she therefore declared her rescission of the purchase contract on the grounds of fraudulent misrepresentation and wanted to rescind the purchase. She believed that the defendant should have pointed out the double murder from earlier times even without explicit inquiry.

It is questionable to what extent the seller of the house has to point out such a circumstance and whether the buyer is entitled to claims for damages in the event that such a reference is omitted before conclusion of the contract. The Cottbus Regional Court (Case No. 11 O. 92/20) dismissed the action because, in its opinion, the earlier double murder was not a circumstance requiring disclosure. It is noteworthy that the Cottbus Regional Court considered this fact to be subject to disclosure under certain circumstances, although the event actually had no effect on the condition of the property. In our opinion, such circumstances are not subject to disclosure, since they have no effect on the condition, but merely irrational sensitivities attribute significance to such events, which have neither an effect nor an after-effect on the thing. There would be rather the fact (known to us from the practice) to be revealed that a dowser determined that under the building a water vein is, which according to opinion of some fellow men is to have likewise negative effects. If it should prove true that there is a water vein under the house (whatever that should be) and not only a water pipe, this is at least a verifiable and continuing fact.

Also the case, which the OLG Hamm (judgement of 20.01.2000 - 22 U 122/99) had to decide some years ago, was already rather suitable to justify a material defect of the property. In this case, the building sold had formerly housed a brothel-like swingers' club. Although in such cases a lingering visitor interest of friends of the swinger club scene is perhaps still to be expected, the OLG Hamm pointed out with, in our view, correct reasoning that this is not a circumstance subject to disclosure, since the residential suitability of the house was not (any longer) impaired thereby.

It can therefore be seen that, if necessary, circumstances that do not affect the condition should also be disclosed as a precaution in order to avoid disputes.

For questions on this topic, please contact attorney and notary Dr. Probandt.

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