Broker commission can be reclaimed: federal court of justice strengthens buyers’ rights with the half-sharing principle and defines the term single-family home in more detail

On March 6, 2025, the federal court of justice sent a clear signal for consumer rights in brokerage transactions with two important rulings and strengthened the rights of buyers with the half-sharing principle, which attorney Sascha C Fürstenow presents in this article.

The so-called half-sharing principle, which was anchored in the “Act on the Distribution of Brokerage Costs in the Brokerage of Purchase Contracts for Apartments and Single-Family Houses and German Civil Code, is intended to distribute the brokerage commission equally between the buyer and seller if the broker was commissioned as a dual broker for both parties. This means that if a dual broker has been appointed for both parties, the buyer only has to pay a maximum of half of the broker’s commission. The law also stipulates that the commissioning of an estate agent for the sale of a detached house or condominium must be in writing and that verbal excuses or a handshake are not sufficient as an agreement.

German Civil Code also provides for the distribution of the broker’s commission in at least the same amount: If only one party to the purchase agreement for an apartment or single-family house has concluded a brokerage agreement, an agreement that obliges the other party to pay or reimburse brokerage fees is only effective if the party that concluded the brokerage agreement remains obliged to pay the brokerage fee in at least the same amount.

This half-sharing principle is intended to prevent private buyers from having to pay the entire estate agent’s commission independently and to reduce the ancillary purchase costs, explains attorney Fürstenow.

However, in practice, the statutory division has led to many uncertainties and disputes between buyers and sellers. With the two proceedings, the federal court of justice has now provided more legal certainty and specified the principle of dividing the commission equally.

First federal court of justice ruling: Total nullity of agreements

In the above-mentioned ruling, the German Civil Code supports the total nullity of agreements on broker commission if these violate the statutory principle of half-sharing in accordance with German Civil Code. Such a violation exists in particular if the buyer is obliged to pay the entire broker’s commission for the broker commissioned by the seller.

Such an agreement would therefore lead to the nullity of the contract, even if the purchase price is reduced.

Facts of the case

In these proceedings, the plaintiffs purchased a plot of land with a semi-detached house. The seller commissioned a brokerage firm with a brokerage commission of EUR 25,000, whereby the stated purchase price was reduced. The buyers undertook to pay the full commission, which they paid after notarization of the purchase agreement. No payment was made by the seller. The buyers demanded repayment of the broker’s commission.

German Civil Code: Whoever appoints a real estate agent must pay

The Regional Court saw the principle of half-sharing violated here and upheld the claim, while the Higher Regional Court partially amended the decision and demanded repayment of half of the commission paid in the amount of EUR 12,500 to the buyers. According to the Court, the buyers were obliged to pay half. However, the federal court of justice overturned the appeal judgment and restored the decision of the regional court. According to the federal court of justice decision, the agreement to pass on the entire commission to the buyer is null and void.

The federal court of justice clarified that the application of German Civil Code is not only limited to the agreements between the parties to the purchase agreement, but also to any contractual agreement that gives rise to a claim by the broker for payment of a commission against a party that is not a party to the brokerage agreement. This also includes agreements between the broker and the party to the purchase agreement who is not a party to the brokerage agreement.

As the buyers were obliged to pay the broker’s commission in full in their internal relationship with the seller, the seller was not obliged to pay the commission in at least the same amount in accordance with Section German Civil Code. However, the breach of German Civil Code leads to the overall nullity of the agreement, meaning that the broker’s commission must ultimately be repaid in full to the buyer in accordance with Se German Civil Code.

Second federal court of justice ruling

The federal court of justice has ruled that a brokerage agreement with different commission rates for buyer and seller is also invalid.

Facts of the case

In this case, the federal court of justice extended the scope of application of German Civil Code. In this case, the estate agent sued a couple. The buyers purchased a property subject to commission, which was built with a detached house plus an extension with an office and garage. However, the estate agent had entered into commission agreements with both the couple and the seller’s wife, which differed in terms of amount. The estate agent was of the opinion that the half-sharing principle pursuant to German Civil Code did not apply here, as the property was not just a single-family home, but was used for commercial purposes.

Definition of a single-family home

The federal court of justice confirmed that a property is a single-family home within the meaning of German Civil Code if it is primarily used for residential purposes. It is a single-family house if the acquisition of the property to be proven or brokered for the broker at the time of the conclusion of the brokerage agreement with the buyer is recognizably for residential purposes of the members of a single household. In this case, the commercial use has a subordinate weighting, as it only accounts for one fifth of the total area. Accordingly, the overall view does not change the character of a single-family home. Likewise, the existence of a granny apartment does not change the definition of a detached house.

Similarly, the fact that the seller’s wife concluded the brokerage agreement does not change the application of the half-sharing principle. Although German Civil Code regulates the conclusion of the brokerage agreement between the broker and the parties to the purchase agreement, it does not regulate the conclusion with a third party instead of a party to the purchase agreement. The legislator has not explicitly regulated the conclusion of a contract by a third party, which the federal court of justice describes as an unintended loophole. However, it is known from the purpose of the law that German Civil Code serves to protect consumers, in particular because they are in a weaker negotiating position. German Civil Code

The following also applies in this case: an agreement that violates the half-sharing principle is null and void as a whole

The two proceedings show that in day-to-day real estate business there is a risk that the half-sharing principle will be circumvented, leaving buyers worse off in the end. Fortunately, the federal court of justice has secured the legal position of buyers. In its rulings, the federal court of justice has remained faithful to the half-sharing principle and has clearly emphasized the strict application of the principle. Compliance with the principle is particularly important for estate agents, as a breach of German Civil Code can ultimately lead to a repayment of the entire commission. In addition, the federal court of justices decision has clarified the question of when a property is considered a single-family home.

Although the rulings have strengthened consumer rights, it is important to check whether the estate agent’s commission has been divided up correctly for every purchase. Attorney Fürstenow can help you to get the estate agent’s commission refunded in the event of a breach. In particular, a lawyer’s review is recommended before any agreement is made in order to avoid additional costs.

The legal advice was prepared by Ms. Dastan, an employee of the FÜRSTENOW law firm, and professionally reviewed and finalized by Attorney Fürstenow.