Judgment on the fee dispute: BGH: Planners can make additional claims

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    Binding architect fees no longer exist. With some old contracts, however, planners can make additional demands after a judgment. What that means for affected home builders is open.

    Supreme court final stroke under a long dispute: Architects and engineers can demand additional claims for contracts concluded before 2021 if the agreed flat-rate fees with customers were below the minimum rates applicable at the time.

    The Federal Court of Justice (BGH) ruled on Thursday that German courts can continue to apply the former fee schedule for architect and engineering services (HOAI) in disputes between planners and private individuals.

    The issue was hotly contested among courts. They had suspended numerous proceedings. They are likely to face many “top-up lawsuits” from planners.

    Lawsuit sparked controversy

    The owner of an engineering office from North Rhine-Westphalia was successful before the BGH. He had asserted an open claim of more than 100,000 euros and justified this with the HOAI. A flat fee of around EUR 55,000 was originally agreed for a construction project. From the point of view of the Hamm Higher Regional Court, the additional demand was justified because the flat rate in the engineering contract violated the minimum price character of the HOAI as a mandatory pricing right. The BGH dismissed the appeal directed against this.

    The basis for the BGH judgment is a decision of the European Court of Justice. The Karlsruhe judges had submitted the matter to the EU’s highest court. The surprising decision on January 18 of this year: German courts can continue to apply the fee schedule in disputes between private individuals – for example architects and home builders. EU requirements have no direct effect on private individuals, but are instructions to a state.

    Earlier cost regulation contrary to European law

    The judgment only applies to old contracts. What solid house planning should cost was fixed for many decades. Then the ECJ saw the HOAI 2019 as contrary to European law: it prevents providers from other EU countries from settling in Germany because they could not compete on price. There has been a new HOAI since 2021, which only gives recommendations instead of prescribed minimum and maximum rates.

    As in other countries, the Federal Chamber of Engineers is threatened with a price war up to and including dumping as a result of the omission of the obligation. Managing Director Martin Falenski fears that this could result in a loss of quality. You can see it similarly at the Federal Chamber of Architects. Their legal advisor Volker Schnepel pointed out: Fees within the HOAI fee ranges are those that the legislator considers appropriate in any case. “This should give a starting point that no ruinous price competition takes place.”

    The effects of the judgment on home builders with old contracts are open – for example if they, as “fee law laymen”, could not see that the old mandatory minimum rates were not met. The Association of Private Builders also points out that, according to the case law of the ECJ, customers who are ordered to make additional payments are entitled to a claim for damages under European law, which is directed against the federal government as the legislator of the HOAI. However, it remains to be seen whether such an approach has any chance of success. The lawyer of the engineer, who was successful before the BGH, pointed out that some claims for damages could already be time-barred.