Junk property

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The term scrap property called colloquially a property that is in poor sales condition is (z. B. was "brush rehabilitated" only) or (z. B. bad reasons other location ) only a small market value has and the purchaser wrong under pretense facts on fraudulently sold for significantly above value.

term

In legal language, the term is used as a catchphrase in connection with the acquisition of stakes in real estate funds in the course of the tax-subsidized construction boom in East and West Germany after reunification. At that time, a broad layer of investors was won over to the purchase of loan-financed shares in real estate funds. The intermediaries often promised unrealistically high growth rates. The growth euphoria widespread at the time resulted mainly from the notion that there would be an incessant boom after reunification. Hopes for quick profits from the acquisition were not always fulfilled; the hoped-for boom actually only lasted a few years, so that finally the courts were concerned with lawsuits for the reversal of such real estate fund transactions.

The Federal Court of Justice has issued several rulings that are referred to as “scrap real estate”. The decisions were not about the quality of the property or the quality of the construction work in the renovation of the property, but initially about participation in a real estate fund and the questions of the right of withdrawal under the Doorstep Cancellation Act (HWiG) and effective representation by a trustee the conclusion of these contracts. The investors asserted that they had been fraudulently deceived and that the brokers had deliberately given false information about the profitability and resale possibilities of the fund investments.

The term also includes combined contracts in which investors were offered condominiums rented out through structural sales , which often came from the holdings of housing associations and whose social commitment had expired, together with bank financing. The apartments were often in need of renovation and were difficult to rent. By engaging a structured sales force, the purchase price also increased significantly due to a large number of internal commissions compared to the actually reasonable purchase price. The buyers, who often had little income, were often wooed with the prospect of tax savings and an additional pension.

facts

The tax-saving model provided for the loss of income in other areas, in addition to the actual wages, to offset this loss with the actual income and thus reduce the tax burden. At the beginning of the 1990s, the real estate industry came up with the idea of marketing real estate investments in broader circles of society - including "little people". Over 300,000 investors invested in such tax-saving models and bought overpriced real estate. The financing was taken over by large German banks - including the Deutsche Bausparkasse Badenia and today's HypoVereinsbank as well as local Volks- and Raiffeisenbanken  - even if the investors had no equity. Both the purchase of real estate and the borrowing were often brokered by structured salespeople who visited the investors at home and persuaded them to undertake the coupling business.

The agents of these businesses usually stated that the property would be profitable through tax advantages and rental income alone. However, the calculation did not always work out; rental income was well under guarantee and tax refunds were insufficient to service the loan.

The term “scrap real estate” has become common because these properties do not bring in what the agents initially promised. Although the term seems rather colloquial, it has also found its way into higher court case law. The term is not defined optically, but arises from the significantly lower value of the property at the time of purchase compared to the purchase price paid. Junk property sales are sometimes recorded by midnight notaries ; These are so called because they notarize transactions with inexperienced buyers who have been put under time pressure, even at unusual times. After allegations in this direction, the Berlin Senator for Justice and Consumer Protection, Michael Braun , a lawyer and notary, asked in 2011 to be released from his senatorial office after only eleven days. Investigations against him were discontinued.

Warning signals

Different lawyers give consistent warning signals when initiating the sale of scrap real estate:

  • Offer of an "all-round carefree package"
  • Consultation outside of the actual purchase object
  • Financing is offered by the seller
  • existing rental guarantee
  • unsolicited initiation of a sales pitch

Legal issues

Junk property cases have raised a number of legal questions, which the courts initially answered differently. The European Court of Justice (ECJ) and the Federal Court of Justice have now clarified most of the questions through fundamental judgments.

Interests

The developments in real estate investments often fell short of the expectations of the investors or the promises of the intermediaries. Any claims for damages against sellers, agents or rental guarantors often turned out to be economically worthless. These compensation debtors were either without assets anyway or - regularly - organized as a GmbH . Claims against them could usually not be realized after their insolvency .

The only solvent contractual partner was then the financing bank. They wanted to be able to maintain their contractual claims to interest and repayment and, if necessary, enforce them, and to remain unaffected by the fate of the real estate investment. The borrower, on the other hand, was interested in getting rid of the loan liabilities, recovering the interest and repayments paid, and parting with the loss-making real estate investment.

Revocability of the loan agreement according to the Doorstep Cancellation Act (HWiG)

Following several rulings by the European Court of Justice, the Federal Court of Justice has repeatedly corrected its case law on consumer credit for the acquisition of investment property in order to improve consumer protection.

Applicability and requirements of the HWiG

According to earlier law, consumers were able to revoke contracts under the Doorstep Cancellation Act that they had been induced to enter into a doorstep situation; The revocation was possible long after the conclusion of the contract if there was no proper instruction about your right of revocation. However, if it was a question of consumer credit, the HWiG declared itself inapplicable according to the prevailing opinion; Only the Consumer Credit Act (VerbrKrG) should be applicable to these contracts . The VerbrKrG regulates the prerequisites for a revocation, the instructions to be given, the expiry of the right of revocation and the legal consequences of a revocation differently than the HWiG; certain loans ( real loans ) were not revocable at all afterwards.

In the so-called Heininger decision of December 13, 2001, the European Court of Justice objected to the inapplicability of the HWiG to consumer credit. According to the amended case law, an investor can also revoke a consumer loan under the HWiG if he has concluded it as a doorstep selling .

In practice, however, this was only true with considerable restrictions. If, as in scrap real estate cases, a third party, such as a sales employee of the seller, approached the consumer on the doorstep of the loan agreement, according to previous case law, the consumer's right of revocation against the credit institution only existed if the bank knew the consumer's doorstep situation or should have known. In the so-called Crailsheimer Volksbank decision of October 25, 2005 , the European Court of Justice objected to this restriction, based on the reasons for the law of the German Bundestag , as being contrary to the guidelines. The BGH then dropped them. According to the guideline-compliant interpretation covered by the wording of Section 1 of the HWiG, a contractual partner who does not conduct the contractual negotiations himself must allow himself to be accounted for the objectively existing doorstep situation in the person of the negotiator.

Legal consequences of revocation

The consequences of the revocation depend on whether the loan agreement was economically linked to the purchase agreement for the property (purchase, joining the fund). If both contracts were economically separate, they remain so even after the loan is revoked. In this case, the purchase contract remains unaffected by the revocation of the loan contract; the loan is reversed according to HWiG.

Since with a financing loan only money flows back and forth, this also applies to its repayment: the consumer then has to return the received currency to the bank. The bank is not entitled to processing costs and / or a discount. The consumer has to pay interest on the transferred value date in line with market rates. For its part, the bank must reimburse the consumer for the interest and repayment payments made on the loan. In addition, he is also entitled to a market rate of interest on the installments he has paid on the loan and which are available to the bank.

If, on the other hand, the loan and purchase contract were economically linked, the revocation of the loan contract declaration in accordance with § 1 HWiG also renders the financed transaction ineffective. According to this, the lender has no claim from § 3 HWiG against the borrower for repayment of the loan amount accrued to the partner of the financed business, but a direct claim for enrichment against the business partner of the borrower. The BGH had already decided this in its judgment of September 17, 1996. He has once again confirmed his case law with a judgment of April 25, 2006: If the loan agreement revoked in accordance with § 1 Paragraph 1 HWiG and the funded entry form a related business within the meaning of § 9 Paragraph 1 VerbrKrG, the purpose of the statutory revocation regulation requires, that the lender has no payment claim against the borrower after revocation. In this case, the reversal has to be carried out directly between the lender and the partner of the financed business, i. H. to be made with the seller of the property.

The XI. The Civil Senate of the BGH did not object to the fact that the Court of Appeal had denied a causal connection between the conclusion of a real estate fund and a loan agreement because more than 3 weeks had passed between the conclusion of a real estate fund acquisition and the conclusion of the loan agreement. In this case, the right of revocation for the loan agreement expired despite the lack of a revocation clause in accordance with HWiG in the loan agreement, even if the purchase of the real estate fund and the application for the loan agreement were made on the doorstep. The failure to instruct the loan customer on the right to revoke the contract according to the HWiG cannot have caused any damage if the consumer concluded the notarized property purchase contract before the loan contract. Then, as the BGH thinks, the consumer could not have avoided exposing himself to the investment risks even if he had been instructed about his right to withdraw from the loan contract. However, such a right of revocation could not have resulted in an acquirer withdrawing from the entire contract package (real estate acquisition and loan), but would have been obliged to repay the loan capital. However, he also made it clear that the presumption of the causality of a doorstep situation does not generally apply with a period of three weeks between the home visit and the conclusion of the contract.

No right of withdrawal for the property purchase agreement according to the HWiG

The revocation options for a (real estate) purchase contract have always been based on the HWiG. According to § 1 Abs. 2 Nr. 3 HWiG there was no right of withdrawal if the declaration of intent had been certified by a notary . Real estate purchase contracts were regularly notarized and therefore not revocable under the HWiG.

The ECJ ruled on October 25, 2005 that the Consumer Credit Directive 87/102 / EEC does not give consumers the right to revoke the property purchase contract, even if this is part of the credit-financed investment model. While the directive is intended to protect the consumer from the dangers arising, in particular, from concluding a contract during a visit by the trader to the consumer, by granting a right of withdrawal under certain circumstances, sales contracts for real estate are expressly excluded from the scope of the directive. On the other hand, however, the ECJ also found that in cases in which the consumer was not informed of his right to withdraw from the loan agreement, the credit institution must bear the risks associated with the investments in question. What effects this decision will have on legal practice is still open.

Easier claims for damages due to the banks' fault to clarify

It is not uncommon for the brokers to deliberately deceive investors about the value of the property by providing incorrect information. This is usually a serious breach of pre-contractual disclosure obligations. The bank must counter the fault of the intermediary, even though it is not its employees, if the loan and purchase agreement are linked and the purchase agreement is therefore ineffective. Such a related business according to § 9 VerbKredG (for contracts concluded up to December 31, 2001) or § 358 of the BGB (from January 1, 2002) only exists if the loan agreement is not made dependent on the security by a mortgage and is granted at the usual conditions for loans secured by mortgage and their bridging financing (Section 3 (2) No. 2 VerbrKrG). The regulation of § 358 BGB, which has been in force since January 1, 2002, no longer makes such a strict demarcation, but instead affirms an economic unity between the purchase contract and the loan contract and the like. a. even if the lender, i.e. the bank, promotes the acquisition business to a considerable extent ( Section 358 (3) sentence 3 BGB).

If, under the law applicable up to December 31, 2001, there was no related business pursuant to Section 9 VerbrKrG, the bank is nevertheless obliged to pay damages to the borrower if it had a knowledge advantage with regard to facts relevant to the purchase decision. Insofar as it has "institutionalized" cooperated with a fraudulently deceptive seller or distributor of the financed property and the broker or seller has obviously given incorrect information to the customer, it is assumed that the bank was aware of this incorrect information. But you still have the opportunity to prove your ignorance of the wrong information.

Statute of limitations problem

With regard to the objection of statute of limitations regularly raised by banks and building societies in numerous lawsuits , it has long been disputed whether the regular three-year statute of limitations since the reform of the law of obligations began to run independently of knowledge from January 1, 2002 and thus expired on December 31, 2004 (which the wording of the transitional provision of Art. 229, Paragraph 6, Paragraph 4, Clause 1 of the EGBGB seemed to speak for) or whether the 3-year period only begins to run after knowledge of the claim or grossly negligent ignorance ( Section 199 Para. 1 no. 2 BGB new version is to be read). With its judgment of January 23, 2007, the BGH has now endorsed the latter consumer-friendly view and thus confirmed the prevailing opinion so far. In a judgment of May 27, 2008, the Federal Court of Justice also specified when a knowledge of a claim i. S. v. 199 BGB can be assumed.

All cases with consultations before January 1, 2002 should meanwhile be statute-barred since the beginning of 2012, since the knowledge-independent ten-year limitation applies. In more recent cases, it should be noted that the statute of limitations, regardless of knowledge, occurs exactly ten years after the incorrect advice , and does not begin at the end of the year.

Ineffective representation

When joining fund companies, in many cases the power of attorney that was typically given to the so-called trustees to conclude the contracts was void due to a violation of the Legal Advice Act. On the basis of these powers of attorney, the trustees had concluded loan agreements for the shareholders or issued an acknowledgment of debt for the shareholders . Effective representation of the investor when concluding the loan agreement was only possible if the bank could rely on the legal certificate of an effective notarized copy that is equivalent to the original that was presented to it. Even if these declarations were void, according to the more recent case law of the Federal Court of Justice, the shareholders of a company under civil law can in principle be held responsible for the obligations of the fund company in accordance with the provision of Section 128 HGB , even if they have not effectively personally committed to repay the loan . The investor is also denied the right to invoke the trustee's lack of power of representation if, when joining the fund company, he committed himself to the immediate enforcement of his personal liability amount of the immediate foreclosure on his personal assets.

Important decisions

See also

literature

  • Carsten Schäfer: The dispute over loans for scrap real estate continues . In: FAZ . March 2, 2005, p. 25.
  • Jürgen Schmidt-Räntsch: The current legal situation with so-called scrap real estate. In: Monthly for German Law. (MDR), year 2005, issue 1, p. 6 ff.
  • Caroline Meller-Hannich : Doorstep selling, real estate purchases, loan agreements and the disappointed investor - the limits of guideline-compliant interpretation and the limits of the interpretation of guidelines . In: Journal of Commercial and Banking Law. (WM) year 2005, issue 25, p. 1157 ff.
  • Ansgar Staudinger : The future of “scrap real estate” after the ECJ rulings of October 25, 2005 . In: New legal weekly . (NJW) year 2005, issue 49, p. 3521 ff.
  • Klaus Richter , Thorsten Käseberg: Doorstep cancellation policy and “scrap real estate” . In: EuzW . Vol. 2006, pp. 46-49.
  • Martin Häublein: Legal consequences of neglecting instruction on the consumer right of withdrawal after the rulings of the ECJ of 25.10.2005 . In: New legal weekly . (NJW) year 2006, issue 21, p. 1553 ff.
  • Christian Schmid: The legal position of the consumer in the event of deficiencies in debt-financed real estate investments (“junk real estate”). 2009, ISBN 978-3-428-13002-3 .
  • Alexander Stöhr: Liability of the banks due to failed real estate financing. 2009, ISBN 978-3-8329-4906-8 .

Web links

Individual evidence

  1. Schimansky, Bunte, Lojewski: Bankrechts-Handbuch. 3. Edition. 2007, § 81 Consumer Loan Law, Rn. 112.
  2. BGH , judgments of April 25, 2006 Az. XI ZR 29/05 , Az. XI ZR 106/05 , Az. XI ZR 193/04 and Az. XI ZR 219/04
  3. ↑ Junk Real Estate. Midnight Notary has been jailed for more than three years. Morgenpost.de, accessed on October 31, 2014
  4. second consistent statement of warning signals , anwalt24.de
  5. ECJ, Az. C-481/99
  6. ECJ, Az. C-229/04
  7. BGH, judgment of September 17, 1996 ( Memento of July 31, 2012 in the web archive archive.today ), Az. XI ZR 164/95; Full text = BGHZ 133, 254.
  8. BGH, judgment of April 25, 2006 (PDF; 141 kB), Az. XI ZR 193/04; Full text
  9. ^ BGH, judgment of May 9, 2006 , Az. XI ZR 119/05; Full text.
  10. ^ BGH, judgment of March 24, 2009 , Az. XI ZR 456/07; Full text.
  11. ECJ, Az. C-350/03 and ECJ, Az. C-229/04
  12. Directive 87/102 / EEC, new version: Directive 2008/48 / EC
  13. BGH, judgment of June 20, 2006 , Az. XI ZR 224/05; Full text.
  14. ^ BGH, judgment of January 23, 2007 , Az. XI ZR 44/06; Full text.
  15. ^ BGH, judgment of May 27, 2008 , Az. XI ZR 132/07; Full text.
  16. ^ BGH, judgment of April 7, 2003 , Az. II ZR 56/02; Full text.
  17. ^ BGH, judgment of December 2, 2003 , Az. XI ZR 429/02; Full text.