Six months have passed since the Federal Court of Justice issued its landmark ruling on September 15, 2023 – V ZR 77/22 – establishing that real estate sellers can generally satisfy their disclosure obligations by providing data rooms. There's a critical caveat, however: this approach only works if buyers can reasonably be expected to discover the relevant information within those rooms. In practice, this means sellers may still be required to actively disclose certain material facts, even when comprehensive data rooms are in place.
The decision sparked immediate and widespread reaction throughout the real estate industry. Consultants and advisors largely predicted that sellers would face significantly greater costs in structuring and managing data room processes. The consensus seemed to be that detailed protocols and usage agreements with buyers would become standard practice. Yet upon closer examination of the court's reasoning, this outcome isn't inevitable. The ruling actually emphasizes that sellers cannot assume buyers will automatically conduct due diligence investigations. There is no legal obligation for buyers to undertake such reviews, nor any requirement to engage expert consultants. Consequently, sellers aren't expected to populate data rooms with every conceivable document or piece of information related to a property. That said, when selling existing properties with standard warranty disclaimers, sellers do bear the responsibility of disclosing all circumstances required by law.
Where the fundamentals are sound, experience suggests that rarely more than a handful of matters warrant intensive scrutiny. What we've witnessed in recent years—the escalating complexity of data room management and due diligence procedures—increasingly resembles an excessive arms race, driven more by consultant workloads and scope creep than by genuine necessity. Given today's concerns about rising transaction costs, the court's decision offers an opportunity to streamline the process: simplify negotiations, eliminate unnecessary layers, and refocus on what truly matters—the disclosures the law actually requires.

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