Anyone who buys a house and engages an estate agent who is also acting on behalf of the seller may be familiar with the principle of 50–50 commission split: Since 2020, Section 656c of the German Civil Code (BGB) has stipulated that the buyer and seller must share the estate agent’s commission equally if the estate agent is acting on behalf of both parties. However, this rule only applies to the purchase of a flat or a Detached house. The Federal Court of Justice has now clarified exactly when a property can be classified as a detached house and when it cannot.
The case: a two-family house, but intended for the owner’s own use
An estate agent had arranged for a buyer to purchase a property that had been advertised as a let two-family house. At the time the contract of sale was concluded, both residential units were let to separate tenants. The property was also expressly described as a two-family house in the notarised contract of sale.
The buyer only informed the estate agent upon conclusion of the estate agency agreement stating that he actually intended to use the property for his own residential purposes. He took the view that the commission agreement was invalid because the principle of equal sharing set out in Section 656c of the German Civil Code (BGB) had not been observed. Accordingly, he argued that he should not have been required to bear the full cost of the estate agent’s commission on his own. The Berlin Regional Court ruled in favour of the estate agent, and the Berlin Court of Appeal upheld the judgement.
The Federal Court of Justice’s ruling
On 16 July 2026, the Federal Court of Justice dismissed the buyer’s appeal (Case No. I ZR 111/25). The estate agent’s claim to commission is valid. The court justified this on the grounds that the provision regarding the 50–50 split of commission only applies if the property can objectively be classified as a detached house.
The key factor here is the timing of the Conclusion of the contract. The decisive factor is whether, based on its actual nature, the property is recognisably intended primarily for the residential purposes of the members of a single household serves. In the present case, this was not the case: the building comprised two equivalent residential units, neither of which was of lesser importance than the other.
If the nature of the property does not clearly indicate that it is a detached house, the Federal Court of Justice (BGH) holds that it is up to the buyer to inform the estate agent of their intended use at the latest when the contract is concluded to notify. Anyone who does so only afterwards can no longer invoke the principle of equal division. Subsequent circumstances cannot, as a general rule, retroactively invalidate a contract that has already been concluded.
What does that mean in practice?
For property buyers, this ruling provides important guidance. Anyone wishing to purchase a property that is formally classified as, or advertised as, a two-family house, but is in fact intended for their own residential use, should take this intended use into account either before or at the time of concluding the estate agent’s contract Communicate clearly. Only then can the statutory protection regarding the 50–50 split of commission take effect.
- In the case of standard detached houses, the commission is automatically split equally.
- In the case of blocks of flats or properties comprising several equivalent units, the buyer must disclose their intention to occupy the property for their own use in good time.
- Anyone who fails to do so will, in the event of a dispute, be solely liable for the full agreed commission.
In some cases, it can be difficult to distinguish between a detached house with a granny flat and a semi-detached house. Anyone who is unsure should seek legal advice before signing an estate agent’s contract.
Source: BGH press releases
This post and the accompanying image were created with the help of AI and have been editorially reviewed.
