Limitation of the claim of a property developer for payment
> December 2016

The question which time limit applies for the limitation of the claim for payment of a property developer towards the buyer is controversially in jurisdiction and literature. Apart from the construction work, the property developer also owes the acquisition of title so that the property development contract includes aspects of sales and service contract law. Regarding the payment, the prevailing opinion in literature assumes a unified claim for payment which lapses after 10 years (article 196 BGB). In contrast, the higher regional court OLG Munich decided with the order dated 16.02.2015 that the claim for payment of the property developer in regards to the limitation has to be divided into a sales contract part and a service contract part with the service contract part lapsing after three years. Now, the district court Munich I has opposed this opinion with an order dated 02.11.2016 with reference to a decision of the OLG Hamm dated 27 March 1990.

Both courts share the opinion of the literature that a division of the claim for payment is not possible and that a unified claim for payment of 10 years has to be assumed. Unfortunately, the German Federal supreme court BGH has not decided on this question yet so as a precaution a time period of three years should be considered.

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