NOTARY’S DUTY TO EXAMINE VALUATION REPORTS
The BGH recently had to decide whether the notary has a duty to check the valuation of a property. The starting point for answering this legal question is § 53 BeurkG, according to which notaries must arrange for the submission of declarations of intent to be notarised to the land registry office or registry court.
Facts
The seller of a property concluded a notarised contract with the buyer. In this purchase agreement, both parties declared the conveyance. In addition, the seller approved and the buyer applied for the entry of a priority notice in favour of the buyer to secure the claim to transfer of ownership. The seller sold the property in 2019 for a purchase price of EUR 110,000. In April 2020, the seller informed the notary commissioned to execute the deed that the buyer had promised her help with relocation and finding a condominium when the purchase agreement was concluded. Despite the seller’s request, this was not recorded in writing. As a result, the notary refused to proceed with the execution of the deed. At the buyer’s request, the notary then announced in June 2020 by means of a remedial notice that she would finally execute the deed. After the seller’s appeal was rejected by the regional court, she turned to the Federal Supreme Court. She lodged an appeal against the execution of a deed of sale by the appointed notary in order to examine whether she had acted in breach of duty pursuant to Section 15 (2) BNotO and therefore had to cancel the execution of the deed
INEFFECTIVENESS OF THE LEGAL TRANSACTION
The notary initially refused to continue with the execution of the deed, assuming that the buyer’s assurance regarding assistance with the move and the provision of a new condominium for the seller was an unrecorded ancillary agreement pursuant to Section 311b BGB. In principle, such an unrecorded ancillary agreement leads to the invalidity of the entire purchase agreement in accordance with §§ 311b Para. 1 S. 1, 125 S.2 BGB. In the buyer’s opinion, however, this is neither a collateral agreement pursuant to Section 311b (1) BGB nor a usurious transaction pursuant to Section 138 (1) BGB. The assurance of his help with the move and the search for accommodation for the seller was merely a friendly favour to the seller. The buyer acted without any intention to be legally bound and also refused to record his assurance in writing. His assurance therefore had no legal effect.
THE NOTARY DID NOT ACT IN BREACH OF DUTY
In its ruling of 9 December 2021 – V ZB 25/2, the BGH found the seller’s appeal on points of law to be admissible but unfounded. Pursuant to Section 53 BeurkG, notaries are obliged to submit deeds ready for execution to the land registry. They have neither the duty nor is it part of their scope of activity to decide on the substantive validity of a notarised declaration of intent. However, they must refrain from executing a deed if it is evidently recognisable (i.e. without any doubt) that the legal transaction on which the deed is based is invalid. However, as the buyer acted without the intention to be legally bound and it was therefore not a side agreement requiring notarisation in accordance with Section 311b BGB, the purchase agreement was not evidently invalid and therefore void in accordance with § 125 sentence 1 BGB. It was also not undoubtedly recognisable for the notary that this was a collateral agreement in accordance with Section 311b BGB, meaning that she did not act in breach of duty when executing the deed, but rather in accordance with her duties.
VALUATION REPORT ON THE PROPERTY
In the further course of the proceedings, the seller submitted a notice from the tax office and a market value appraisal of the property in order to prove an usurious legal transaction in accordance with Section 138 BGB. The usurious legal transaction is immoral and also leads to the invalidity of the property purchase agreement. According to the Federal Court of Justice, however, such expert opinions or notices on the market value of a property are fundamentally unsuitable for proving an usurious transaction in accordance with Section 138 BGB. Such an expert opinion does not allow the notary to recognise beyond doubt whether the actual market value corresponds to the claimed market value. Such an examination is also to be examined by the civil courts and not as part of a complaint in accordance with § 15 Para. 2 BNotO. Therefore, notaries are not obliged to examine valuations of properties.