When an entanglement or undisclosed kickback invalidates the commission claim
Not every real estate agent's commission is earned. If the agent has a financial or personal connection to the seller, or if they conceal an internal commission, their claim to the commission may be invalidated or forfeited. Buyers can often reclaim a commission already paid in such cases. Rogert & Ulbrich investigates the relationships between agents and sellers and enforces your claims.
What internal commissions and kickbacks mean in real estate agent law
An internal commission is a fee paid by the seller to the real estate agent, which is factored into the purchase price without the buyer recognizing it as such. This is common with professional sellers or property developers. A kickback or rebate is a hidden payment the real estate agent receives for their services without disclosing it.
The so-called "excess proceeds agreement" is particularly problematic. In this type of agreement, the real estate agent secures a share of the sale proceeds that exceeds a minimum price agreed upon with the seller. Such hidden internal commissions affect the entire contract and must be disclosed to the buyer. If the agent conceals them, they breach their fiduciary duty.
Do you suspect that your real estate agent received a hidden commission? Have the payment flows checked.
Intertwining of broker and seller: when the claim lapses
A real estate agent is supposed to mediate between two parties. However, if they are so closely connected to the seller that they cannot provide a neutral service, they are not acting as a genuine agent towards the buyer. Legal precedent refers to this as a commission-disqualifying conflict of interest. This means the agent cannot demand a commission from the buyer.
Two forms are distinguished. A genuine entanglement exists when there is a legal or economic connection, for example, if the real estate agent has a stake in the seller or is legally identical to them. A pseudo-entity exists when the real estate agent is formally independent but, due to institutional constraints, cannot properly fulfill their duties. Typical examples:
- Participation or identityThe broker is a co-owner, partner, or economically identical to the seller.
- Power of attorney to conclude a contractThe real estate agent can conclude the purchase agreement for the seller himself and is therefore on his side.
- administrator positionThe broker is also the manager of the property, whose approval is required for the sale.
The crucial point is that a connection exists between the real estate agent and the buyer. A mere connection between the agent and their own client is, in itself, unproblematic. The decisive factor is whether the agent could still act as an independent intermediary towards the buyer.
Are there any suspicious connections between your real estate agent and the seller? We will investigate whether there is a conflict of interest that could negatively impact your commission.
Hidden kickbacks and the disclosure obligation
Transparency is crucial in real estate brokerage law. The broker must not conceal from the buyer that they receive additional compensation besides or instead of the explicitly stated commission. A hidden internal commission or a profit-sharing agreement affects the basis of the buyer's decision and must therefore be disclosed.
It is particularly serious if the real estate agent secretly collects commissions from both parties despite an agreement stipulating only one commission. The Federal Court of Justice considers such behavior a serious breach of fiduciary duty. The consequences range from the loss of the commission and claims for damages to potential criminal liability for fraud if the agent deliberately deceived the buyer. The buyer's loss can be measured by the additional profit the agent or seller gained through the concealed agreement.
Do you suspect undisclosed double payment? Have your case reviewed to determine what claims you may have.
Secret dual employment and forfeiture under § 654 BGB
In the real estate sector, it is common practice for a real estate agent to act for both parties. This is not inherently prohibited. Dual representation is permissible if both parties are aware of the agent's dual role. Only a breach of contract or a covert dual representation is prohibited.
If the real estate agent violates this provision, Section 654 of the German Civil Code (BGB) applies. According to this section, the claim to the real estate agent's commission is forfeited if the agent has acted for the other party contrary to the terms of the contract. Case law has extended this forfeiture beyond the literal wording of the law to include generally bad faith conduct. The threshold is crucial here: the claim is only forfeited in cases of gross negligence, meaning if the agent intentionally or almost intentionally harms the interests of their client. Minor oversights are insufficient.
In the event of a serious breach, the claim is completely void, potentially against both contracting parties. We will determine whether your case meets this threshold.
What a violation means for buyers
For you as the buyer, these principles have a direct impact. If genuine brokerage services are lacking because the broker is connected to the seller, or if the broker has forfeited their claim through bad faith, you do not owe a commission. You can reclaim any commission already paid because there is no legal basis for the payment.
However, the burden of proof must be considered. Anyone invoking forfeiture or a conflict of interest must present the supporting facts and prove them if a dispute arises. No actual damage needs to have occurred. Precisely because the connections between real estate agent and seller are often not readily apparent, a thorough investigation of the actual circumstances is crucial.
Do you want to know if your commission has been forfeited or was never earned? We will examine the evidence and your chances of getting it back.
What buyers should check and do
The examination of interrelationships and hidden remuneration complements other review methods such as the principle of equal division, the right of revocation, and the button solution. As we discussed in the Claim for reimbursement of broker's commission For further instructions, please see our service page. These steps will help you get started:
- Check connectionsAre there any indications of corporate, economic, or personal connections between the broker and the seller, such as shared addresses, shareholdings, or powers of attorney?
- Question payment flowsDoes anything indicate an internal commission, a profit-sharing agreement, or a double commission?
- Collect documentsBrokerage agreement, property exposé, purchase agreement, commercial register extracts and proof of payment.
- Note the statute of limitations.Claims for reimbursement regularly expire three years from the end of the year in which you paid and became aware of the circumstances.
- Have it legally reviewedA legal assessment will clarify whether there is an entanglement or forfeiture and whether you can reclaim the commission.
Because such connections are rarely disclosed, a thorough examination is crucial. Send us your documents and we will investigate.
Rogert & Ulbrich – Your lawyers in real estate law
Rogert & Ulbrich has been consistently representing consumers against unjustified demands and opaque contracts for years. The firm was founded by Dr. Marco Rogert and Tobias Ulbrich and has handled over 40,000 cases and filed more than 25,000 lawsuits. real estate law The focus is on protecting buyers, especially regarding real estate agent commissions and opaque connections between agents and sellers.
We examine whether there is a conflict of interest that could lead to a loss of commission or whether there has been a forfeiture of rights, classify your case according to the applicable review criteria, and enforce claims for reimbursement, out of court against the broker and, if necessary, in court. You can conveniently retain our services online; we operate nationwide and, if you have legal expenses insurance, we bill your insurer directly.
You have paid a real estate agent's commission and now doubt their independence? Get in touch and protect your rights.
