The Federal High Court decided with judgement of 22.03.07 over the complaint against an investment mediator of the BHW, which had mediated a closed participation. Attorney Johannes Fiala, Munich, www.fiala.de, has sent in the BGH ruling with the BGH judgment, to which reference is also made in the reasons for the judgment, and has discussed it for us.
Excerpt from the judgment brief:
In the prospectus, 6% of the contribution was shown as advertising costs – while the share of the intermediary in the total commission of the sales organisation had already amounted to 8%. The court recognized that the investment intermediary is obligated to provide correct and complete information, and that this also includes the obligation to point out undisclosed commissions. For the plaintiff/investor it was not recognizable from the prospectus that further parts of the total commission were “hidden” in other items of the use of funds (something land acquisition). The intermediary is therefore obliged to counter the risk of error in the context of the plausibility check with the investor. It is irrelevant whether parts of the commission are paid by third parties (e.g. co-initiator, property shareholder). In addition, an obligation to disclose the total commission without asking the investor may also be given if the critical limit of 10-15% internal commission (cf. BGH ruling of 28.07.005 > Doc. No. 05.7485.02) plus 6% distribution costs of the fund company is exceeded: In this consideration, the distribution costs of the fund company and the internal commission (also from third parties) are to be cumulated. The lack of disclosure of the total amount of commission can lead to reversal as soon as one of the two case variants applies. This is because in these cases the Federal Court of Justice assumes on the basis of life experience that an investor would have decided against joining if the total amount of the provisions had been revealed.
On the duty of the investment intermediary to disclose an internal commission paid for the distribution which was not listed in the prospectus for joining a real estate fund.
(DA No. 18B.07 of 07.05.2007, p. 6)
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About the author
Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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