Reporting requirement

Duty to Disclose - The duty to disclose is the legal or contractual obligation of one party to a contract to promptly notify the other party of certain circumstances. In real estate law, it primarily applies to tenants, landlords, policyholders, and building owners, who must report relevant changes-such as defects, damage, or changes in use-in a timely manner.

Duty to Disclose in Tenancy Law

The most important duty to disclose under tenancy law arises from § 536c BGB: The tenant must notify the landlord immediately if a defect in the rented property arises during the lease term or if a measure to protect the property becomes necessary. This applies, for example, to water damage, defective heating systems, mold growth, or burst pipes. If the tenant fails to comply with this obligation, they are liable for any additional damage caused by the delay and may lose their right to a rent reduction-at least for the period during which they culpably failed to provide notice.

Conversely, the landlord has a duty to notify the tenant if he plans modernization measures (Section 555c BGB). The notice must be given in writing no later than three months before the start of the work and must specify the nature, scope, start date, and expected duration of the measure. In the absence of proper notice, the tenant may refuse to tolerate the work.

Termination for personal use is also subject to specific notice and justification requirements: Landlords must explain in detail in the termination letter for whom the personal use is being claimed and why that person is dependent on this apartment. Insufficient justification renders the termination formally invalid.

Duty to Disclose in Insurance and Construction Projects

In the case of building insurance, there is a duty to disclose both at the time of contract conclusion (pre-contractual duty to disclose pursuant to §§ 19 ff. VVG) and during the term of the contract (post-contractual duty to disclose). The policyholder must report circumstances that increase the risk-for example, long-term vacancy, a change of use (residential building becomes a commercial property), or major renovation work. If they fail to do so, they risk the insurer’s exemption from liability in the event of a claim or termination of the contract.

In building law, there are disclosure obligations toward the building authority: The start of construction, completion, and commencement of use must be reported for projects requiring approval (Art. 68(5) BayBO in Bavaria). A change in the construction manager or the designer must also be reported. Violations may result in fines or lead to a prohibition on use.

Duty to Disclose in Real Estate Purchases

There are also real estate-related disclosure obligations under sales law. According to § 444 BGB, the seller may exclude liability for defects-but not for defects that they have fraudulently concealed. In effect, the seller is thus obligated to disclose to the buyer all defects known to them. For the buyer, in turn, the tax reporting obligation applies: real estate purchase agreements must be reported by the notary to the competent tax office so that the real estate transfer tax can be assessed.

Overview: Important Disclosure Obligations in Real Estate Law

Area of Law	Party Required to Disclose	Content	Deadline	Legal Basis
Tenancy Law (Defects)	Tenant	Defects in the leased property	Immediately	Section 536c BGB
Tenancy law (modernization)	Landlord	Planned modernization measures	3 months prior to commencement	§ 555c BGB
Insurance law	Policyholder	Circumstances increasing risk (vacancy, change of use)	Immediately	§§ 19, 23 VVG
Bavarian Building Law	Building Owner	Start of construction, completion, commencement of use	Before start/after completion	Art. 68(5) BayBO
Bavarian Building Law	Building Owner	Change of construction manager or designer	Immediately	Art. 53 BayBO
Tax Law (Real Estate Transfer Tax)	Notary	Submission of purchase agreement to tax office	Automatically via notary	§ 18 GrEStG
Sales Law	Seller	Fraudulently concealed defects	Before notarization	§ 444 BGB

Practical Tip for Property Owners in Nuremberg and Franconia

We recommend that landlords in the Nuremberg metropolitan area inform their tenants in writing of the duty to report under § 536c BGB upon signing the lease and set up an easy-to-use reporting system-such as a dedicated email address or an online form. This ensures that defects are identified early on, before major consequential damage occurs. A simple water leak that goes unreported can quickly escalate into five-figure mold damage.

Landlords who have their own insurance should check annually whether the use or condition of the property has changed and proactively report any changes to the insurer. Especially when the property is vacant-such as during extensive renovations-landlords should inform the insurance company to avoid jeopardizing their coverage.

Frequently Asked Questions

What happens if the tenant fails to report a defect?

If the tenant culpably fails to report the defect, they are liable to the landlord for compensation for the additional damage caused by the delay. Furthermore, they lose their right to a rent reduction for the period during which the report was culpably withheld. In cases of gross negligence-such as when obvious water damage is ignored for weeks and leads to mold growth-the tenant also risks extraordinary termination for a persistent breach of tenant obligations.

Are there deadlines for reporting?

The law requires “immediate” notification, i.e., without culpable delay (Section 121 of the German Civil Code). In practice, this means: As soon as the defect is detected, the report should be made within one to three days. In cases of acute danger-such as a gas leak, a burst water pipe, or roof damage after a storm-immediate action is required, if necessary by taking your own measures to minimize damage while simultaneously notifying the landlord.

Does the report have to be in writing?

No specific form is required by law; a verbal or telephone report is also valid. However, for evidentiary purposes, we strongly recommend the written form-via email, messenger with read receipt, or registered letter. Additionally, document the defect with photos and the date of initial discovery. In the event of a dispute, the tenant bears the burden of proof that they reported the defect in a timely manner.

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