Estate agents in Germany: the § 34c permit

What an agent does in a German purchase

A Makler introduces a buyer to a property, or brokers the contract. The agent does not draw up or sign the sale. A contract to transfer ownership of land must be made before a notary: § 311b paragraph 1 of the Civil Code (Bürgerliches Gesetzbuch, BGB) says such a contract “bedarf der notariellen Beurkundung”. The agent’s work therefore ends at the introduction and the negotiation, before the notary’s role starts. A notary may not broker land deals: § 14 paragraph 4 BNotO forbids a notary to “Darlehen sowie Grundstücksgeschäfte zu vermitteln”, apart from the intermediary tasks the law gives to the office.

How the trade is regulated

§ 34c paragraph 1 GewO makes a permit (Erlaubnis) compulsory for anyone who, as a trade, “den Abschluss von Verträgen über Grundstücke, grundstücksgleiche Rechte, gewerbliche Räume oder Wohnräume vermitteln oder die Gelegenheit zum Abschluss solcher Verträge nachweisen” wants to. The same paragraph covers other trades under the same article: some loan intermediaries, developers acting as Bauträger, construction project managers and managers of homes (Wohnimmobilienverwalter). The permit can be limited in scope and tied to conditions.

Paragraph 2 lists when the permit must be refused. These include facts suggesting the applicant lacks the reliability needed, which as a rule is missing for someone convicted within the last five years of a felony or of theft, embezzlement, extortion, fraud, breach of trust, money laundering, forgery, handling stolen goods, usury or an insolvency offence. It also covers applicants whose finances are in disorder, which as a rule is the case after insolvency proceedings have opened or an entry in the debtors’ list. The compulsory professional liability insurance in paragraph 2 number 3 applies only to managers of homes. The 20 hours of continuing training in three calendar years (paragraph 2a) apply to those managers too, not to agents who only broker sales or lettings.

Paragraph 5 sets exceptions, notably for credit institutions and certain investment firms holding their own licence. A mortgage broker has its own rule: see mortgage brokers.

How to check an agent yourself

There is no public register of § 34c permits that we could find. § 11a GewO sets up the Vermittlerregister, run by the chambers of industry and commerce, but only for those obliged to register under ”§ 34d Absatz 10 Satz 1, § 34f Absatz 5, § 34h Absatz 1 Satz 4 und § 34i Absatz 8”. § 34c is not on that list. Pages from a chamber of commerce that say otherwise were behind a security filter when we tried and we did not read them, so we do not rely on them.

What you can do:

1. Ask the agent, in writing, for a copy of the permit under § 34c paragraph 1 number 1 GewO, with the name of the authority that issued it.
2. Ask that authority, which the state designates, whether the permit exists for that name and covers brokerage of the kind you need. Payotte has not checked what any authority will tell a third party.
3. Compare the name, the address and the business name on the permit with those on the brokerage agreement.

Because there is no register, there are no register terms of use to quote for this trade. A permit shown to you is a document to read, not a status Payotte can confirm.

What the commission depends on

The sources we read set no legal scale, ceiling or percentage for a purchase commission, and we give none. What the law does set:

• Form. A brokerage contract for a flat or a single-family house needs Textform (§ 656a BGB), a text on a durable medium, not necessarily a signed paper.
• Both sides. If the agent has a commission promised by both parties, they must commit “in gleicher Höhe” (§ 656c paragraph 1). If the agent works free for one party, nothing can be asked of the other, and a waiver also benefits the other party. A contract that departs from this is void (paragraph 2). These rules apply where the buyer is a consumer.
• One side only. If only one party signed a brokerage contract, an agreement making the other party pay is valid only if the first party stays liable for at least the same amount (§ 656d paragraph 1). The claim against the other party falls due only once the first party has paid and shown proof.
• Lettings. Under § 2 paragraph 1a WoVermRG an agent may not ask a home-seeker for a fee, unless the agent obtained the landlord’s instruction solely because of the contract with the seeker. A fine of up to €25,000 applies (§ 8 paragraph 2 WoVermRG). Read who pays a letting agent.

For other costs of buying, use the purchase costs calculator.

Which professional to consult

For the contract itself, a notary is the official you will meet. For financing, see mortgage brokers. For the value of the home, see property valuers. A lawyer can read a brokerage agreement before you sign.