Third-party liability

Third-party liability - Third-party liability refers to legal liability toward persons who are not parties to a contract. In real estate law, third-party liability arises when an owner, property manager, contractor, or real estate agent is liable for damages not only to their contractual partner but also to uninvolved third parties (neighbors, passersby, visitors). Third-party liability arises from tort law (Sections 823 et seq. of the German Civil Code (BGB)), the duty to ensure public safety, and specific statutory provisions.

Legal Basis of Third-Party Liability

The most important bases for liability toward third parties in the real estate sector:

• Tort Liability (Section 823 BGB): Anyone who intentionally or negligently causes injury to another person’s life, body, health, or property is obligated to pay damages
• Duty to Maintain Safety: The property owner must maintain their property in such a way that third parties are not harmed-e.g., the duty to clear snow and spread grit in winter, removal of tripping hazards, securing dilapidated structural components
• Liability of the Property Owner (Section 836 BGB): If someone is injured by the collapse of a building or the detachment of building parts, the owner is liable-unless they can prove that they exercised the necessary care (reversal of the burden of proof)
• Liability under neighbor law (Section 906 et seq. BGB): Excessive nuisances (noise, vibrations, water) can lead to claims for damages by the neighbor

Typical liability cases in practice

• Winter maintenance: A pedestrian slips and falls on the uncleared sidewalk in front of the property-the owner is liable for personal injury (medical expenses, compensation for pain and suffering, loss of earnings)
• Falling building components: A loose roof tile injures a passerby-the owner is liable under § 836 BGB if they failed to identify and repair the defective roofing in a timely manner
• Construction defects: A contractor builds a defective facade that collapses onto the neighboring property-the contractor is liable to the neighbor in tort, and the client is liable under the duty to ensure public safety
• Broker liability: A broker negligently provides a prospective buyer with incorrect information regarding living space or the condition of the building - the broker is liable to the buyer even without a direct contract, based on culpa in contrahendo or tort

Minimizing Liability Through Preventive Measures

Third-party liability can be significantly reduced through consistent personal responsibility. Important measures:

• Regular roof inspection (at least every 5 years, immediately after storms) by a specialized contractor - document the results in writing
• Tree inspection once a year by an expert, more frequently for older trees - trees that could fall onto public roads or neighboring properties must be inspected with particular care
• Professional exterior plaster inspection for older buildings with historic plaster - flaking plaster often causes personal injury
• Clearly defined and documented winter maintenance contract - document the contract in writing, keep a log of services performed

Practical Tip for Property Owners in Nuremberg and Franconia

In Nuremberg, the municipal ordinance on the maintenance and cleaning of public streets applies, which assigns winter maintenance (snow removal and salting) to property owners-on weekdays by 7:00 a.m., on Sundays and holidays by 8:00 a.m. Violations not only result in fines but also give rise to third-party liability for all personal injury and property damage in the event of accidents. We recommend that property owners take out home and property owner liability insurance (cost: approx. €50-150/year for a single-family home, €100-500/year for multi-family homes depending on size) and either reliably organize winter maintenance themselves or delegate it to a professional service. Liability remains with the owner, but the obligations can be contractually transferred-in the event of an accident, you are then jointly and severally liable with the service provider.

Frequently Asked Questions

As the owner, am I still liable if I have contracted out winter maintenance to a company?

The duty to ensure public safety generally remains with the owner. By hiring a winter maintenance company, you transfer the obligation to perform the work but retain a duty to supervise (duty to select and monitor). You must verify that the service provider is performing their work properly and conduct random checks. In the event of an accident, you are only exempt from liability if you can prove that you selected a reliable service provider and exercised sufficient oversight. A written service contract with a clear description of duties and a requirement for documentation protects you in the event of a dispute. A right of recourse against the service provider exists in any case if their breach of duty was the cause of the damage.

What insurance covers third-party liability for property owners?

Home and property owner liability insurance is the primary coverage against third-party liability claims. It covers personal injury, property damage, and financial loss incurred by third parties due to the property or building-including damage from winter maintenance, falling building components, and inadequate safety measures. For owner-occupied properties, liability is often included in personal liability insurance-check this with your insurer and note that the coverage limits for property damage must be sufficiently high (recommended: at least €5 million).

Can my neighbor hold me liable for root damage to their property?

Yes-if the roots of your tree grow onto your neighbor’s property and cause damage there (e.g., to pipes, foundations, or paving), you are liable as the owner of the tree under § 1004 BGB (right to removal) and § 823 BGB (compensation for damages). The neighbor also has a right of self-help under § 910 BGB and may cut back overhanging roots and branches after setting a prior deadline. In Bavaria, the Neighbor Law (BayAGBGB) also applies, with specific regulations regarding boundary distances and plant heights. Recommendation: Address boundary tree situations early on through dialogue with your neighbor and document the tree’s condition and any measures taken.

Is the landlord liable to third parties for the conduct of their tenants?

Generally no-the landlord is not liable for his tenants’ tortious conduct toward neighbors or third parties. However, an exception applies if the landlord knew or should have known of the harmful conduct and failed to take remedial action. A classic example: A tenant permanently stores fuel or hazardous chemicals in the basement, posing a fire or explosion hazard. If the landlord became aware of this during an inspection and took no action, they may be held liable to third parties in the event of damage. We recommend that landlords conduct regular inspections, document identified hazardous situations in writing, and remedy them immediately-proof of having acted with due care is crucial in the event of liability.

Third-Party Liability During Construction Work on the Property

When construction work is carried out on a property, temporary liability risks arise toward third parties: falling construction materials, construction noise, vibrations that damage neighboring buildings, or a lack of safety barriers for pedestrians. The duty to ensure public safety during the construction phase lies primarily with the contractor but also remains, on a subsidiary basis, with the property owner. The latter should clearly stipulate in the construction contract who is responsible for securing the construction site and verify whether the contractor’s construction performance insurance and liability insurance are sufficient. In downtown Nuremberg-where construction work often takes place in cramped urban environments-the professional securing of construction sites against third parties is particularly important and is monitored accordingly by the building authority.

Back to the Real Estate Glossary.