Duty of disclosure of the dual broker
Real estate agents who act as dual agents - i.e. who represent both buyers and sellers - operate in a delicate field of tension between the interests of both parties. In this role, the question often arises as to how they can carefully fulfill their duty to protect the interests of both parties. A recent decision by the Supreme Court in GZ 7 Ob 208/24z once again emphasizes the central importance of the broker's duty of disclosure - particularly with regard to the purchase price of a property.
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Real estate agents who act as dual agents - i. e. Who represent both buyers and sellers - operate in a delicate field of tension between the interests of both parties. In this role, the question often arises as to how they can carefully fulfill their duty to protect the interests of both parties. A recent decision by the Supreme Court in GZ 7 Ob 208/24z once again emphasizes the central importance of the broker's duty of disclosure - particularly with regard to the purchase price of a property.
The legal framework: Audit obligation of the dual broker
The Supreme Court recently dealt with the question of whether and to what extent a dual estate agent is obliged to check the offered purchase price for its reasonableness and to inform the client in the event of a discrepancy. According to § 1299 ABGB, real estate agents are considered experts. This means that they owe a special degree of expertise and care.
Specifically, the Supreme Court states: A dual estate agent is obliged to inform both clients if the purchase price demanded exceeds the market value of the property, irrespective of an explicit mandate to determine the market value. If this obligation is breached, this can - under certain conditions - be considered a breach of due diligence. This in turn can result in contractual claims for damages. In addition, the client is entitled to demand a reduction in the broker's commission in the event of serious breaches of duty.
When is there a duty of disclosure and does a breach always constitute a breach of due diligence?
The central question remains how much a purchase price must deviate from the actual market value in order to trigger a duty of disclosure, the breach of which can constitute a breach of due diligence. In the case of property valuations, price ranges of 15 to 30 % are generally considered to be in line with the market. However, the Supreme Court clarifies that the mere deviation of the purchase price from the market value does not automatically constitute a breach of due diligence. Such a high deviation beyond the valuation range in line with the market (15 to 30 %) is only an indication of a breach of due diligence. Conversely, a valuation within the market-compliant price range cannot automatically be classified as due diligence.
Rather, the decisive factor is whether the valuation of the market value by the dual broker methodically correct and under Inclusion of market-relevant factors has taken place. If the market value is properly determined, there is no breach of due diligence on the part of the dual agent, even if the deviation is higher than the market price range.
Recommendations for practice how to act legally compliant as a dual broker:
- Calculate market value : A well-founded market value assessment should be carried out for every dual brokerage activity.
- Document evaluation the results of the valuation should be recorded in writing - also for your own security.
Clarify in case of doubt in the event of uncertainty regarding the appropriateness of the purchase price, it is advisable to take the precaution of exercising the duty of disclosure in order to avoid possible liability risks.
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