Reservation Agreement (Reservierungsvereinbarung)
Reservation agreement (Reservierungsvereinbarung) for property purchases in Germany: validity, Federal Court of Justice rulings, and risks for buyers.
Financial
BGH, Urt. v. 20.04.2023, I ZR 85/22
Also known as: property reservation, holding agreement, exclusivity agreement
A reservation agreement (Reservierungsvereinbarung) offers the prospective buyer time-limited exclusivity under German law. The Federal Court of Justice (BGH) clarified the legal situation regarding reservation fees in 2023: fees charged by brokers may be invalid depending on their structure. A reservation does not automatically oblige either party to complete the purchase.