Dual agency in an apartment-building sale: disclosure, commission and conflicts of interest

In an apartment-building sale, a broker may first speak for the seller and later answer questions from a buyer. This can amount to dual agency. It is not merely a commission detail: the parties need to know who acts for whom, how information is passed on and whether a statement can safely support a purchase decision.

Section 3 of the Austrian Broker Act requires a broker to safeguard the principal's interests honestly and diligently. Under section 5, acting for the third party at the same time or accepting remuneration from that party generally requires the principal's express consent unless a different trade usage applies. Once the broker acts as a dual agent, both principals must be informed. Roles, remuneration and communication rules should therefore be settled before the buyer's detailed review begins.

Keep dual agency and protection of interests distinct

A brokerage agreement does not automatically make the broker a comprehensive adviser to both transaction sides. The duty to safeguard the principal's interests honestly and diligently under section 3 of the Broker Act nevertheless remains, including when the broker also acts for the third party. In an apartment-building transaction, price, income assumptions, leases, building records and pending proceedings can pull the parties in different directions.

The parties should therefore define the actual service: market approach, viewing coordination, forwarding approved records, managing questions or assistance with negotiations. Legal review of the data room and drafting of the purchase agreement remain separate. The apartment-building sale topic page places these steps in the wider sale process.

Disclose dual agency before the buyer review

As soon as the broker acts as a dual agent, section 5(3) of the Broker Act requires notice to both principals unless the broker may assume from the circumstances that both already know. In practice, a clear and attributable notice is safer than an assumption about what the other party may know. It should identify the broker's role and the basis on which remuneration is agreed.

Disclosure of the broker role does not replace disclosure of the property. Differences in rent, area, permits or proceedings must still be handled through a reliable questions process and, where necessary, the contract documents. The article on the disclosure letter in an apartment-building sale covers this second level. The broker role and property information should not be mixed into an unclear email trail.

Link commission to the instruction and meritorious activity

Under section 6 of the Broker Act, commission is generally due where the broker's contract-compliant, meritorious activity causes the transaction with a third party to be concluded. Mere identification of the third party is generally insufficient under section 6(2), unless a different trade usage applies. In a transaction, not only the amount but also the agreed service therefore matters.

Neither seller nor buyer should infer a legal position merely from an invoice. Instruction, possible dual agency, the broker's contribution, the trigger for due payment and VAT treatment must be assessed separately. Consumer-law rules may apply depending on the parties involved; in a professionally structured acquisition, their application should no more be assumed automatically than a particular trade usage.

Organise buyer questions and bid processes by role

A conflict does not usually appear only as an explicit price recommendation. It may also arise where a broker answers questions only orally, gives documents to individual bidders earlier or forwards a management statement as a contractual assurance without review. A central question log, approval by the responsible seller side and a traceable data room prevent contradictory information.

The bid-process article explains process letters, exclusivity and equal information access. These rules do not replace the broker role. They do show who answers a question, who approves an additional assurance and which document reaches all bidders.

Separate broker communication clearly from the purchase agreement

A broker brings parties together and can coordinate the process. Legal risk allocation arises in the purchase agreement: through precise descriptions, warranties, knowledge qualifications, exclusions, liability limits, conditions and effective-date rules. Statements from the brochure, a viewing or the questions process should therefore be checked before signing to determine whether they become contract terms, remain documented information or require correction.

Early role clarity is commercially sensible for buyer and seller. It prevents data-room issues, commission discussions and contract negotiations from remaining unresolved at the same time. BRANDAUER Rechtsanwälte reviews transaction records and links data room, disclosure, broker communication and purchase-contract mechanics into a coherent structure.