No builder's warranty in accordance with Section 650f BGB - no rectification of defects - but also no compensation for defective work!
Schleswig-Holstein Higher Regional Court, judgment of July 24, 2024 - 12 U 75/23
The Higher Regional Court of Schleswig had to decide the following case, which frequently occurs in practice (abridged version): In a construction project, the contractor demanded payment from the client after completion of the work. Due to defects, the client neither accepted the work nor paid the remuneration. Instead, the client demanded that the contractor rectify the defects. At the same time, the contractor demanded a builder's guarantee from the client in accordance with Section 650f BGB. However, the client did not provide a builder's guarantee. As a result, the contractor refused to remedy the defect, terminated the contract and sued for the remaining remuneration.
After being successful at first instance before the Itzehoe Regional Court, the contractor lost his claim on appeal before the Schleswig Higher Regional Court. Due to the existing defects, he was unable to fully enforce his claim for remuneration. The Higher Regional Court of Schleswig justified this by stating that after the end of the supplementary performance stage, the contractor's claim for remuneration only existed insofar as the service had been provided free of defects. Existing defects must be taken into account. If the service is defective in parts, the contractor is only entitled to remuneration reduced by the reduced value of the defects. This reduced value is to be determined on the basis of the remuneration attributable to the defective services on a pro rata basis.
A bitter decision for the contractor. A similar decision was made by the Higher Regional Court of Düsseldorf in its ruling of 30.11.2023 (5 U 33/23), which, however, also refers to the opposing view regarding the relationship between the claim for remuneration for work in the event of a right to refuse performance and termination in accordance with Section 650f (5) BGB in the event of defects (legal consequence for remuneration claims as in the case of free termination). It can be assumed that the last word has not yet been spoken here. The only drawback for the contractor is that the client is not entitled to an advance on costs for the substitute performance.
As a result, however, the contractor who was once willing to remedy the defect is worse off with a reduction in the remuneration for the work than if he receives the full remuneration for the defective performance less the expenses saved for remedying the defect and, if applicable, after offsetting other income.
Jochen Mittenzwey
Lawyer and specialist lawyer for construction and architectural law / Partner
MO45LEGAL - Bschorr | Warneke | Sukowski GbR
Lawyers and notaries
mittenzwey@mo45.de
