A vendor of investment property with a rent pool has to state all costs and risks likely to be incurred by the investor.


Ruling:
The vendor is in violation of providing the required information if claiming to positive expectations with regard to the return on the investment. This applies when the investor joins the rent pool at the recommendation of the vendor. The risk of repairs and vacancy in other apartments has to be quantified and shown in the calculations and not only mentioned on the side.

While advising on property as an investment the expected cost is a key figure in the calculation. It has to demonstrate that the vendor not only is in the position to buy the property but also to maintain it. The investor can assume that the vendor has included all risks in the calculation. Vacancies or repairs at a normal scale should not immediately reduce the yield promised at the purchase.

BGH ruling 30.11.2007, V ZR 284/06


Recommendation
Do not let guarantees deflect you from inspecting all aspects of the apartment you are actually buying!


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