A court in Berlin has ruled on a legal battle involving two German businesspeople, one of whom is among the wealthiest people in the world, over the sale of a mansion in Calvia worth €20 million. The litigation heard in Berlin related to an option-to-purchase agreement for the luxury property. This was signed in Madrid and was expressly subject to Spanish law.
The amount in dispute matched the property's ultimate transfer value, set at €20 million. Both the buyer and seller resided in Germany, and the property was considered to be a second home for holiday use. Both parties had expressly agreed to the jurisdiction of the Berlin courts to resolve any disputes arising from the contract.
Initially, the buyer signed a preliminary sales agreement and paid one million euros to secure the transaction. The sale price had been set at 16 million euros, but the Mallorcan market went into overdrive, and the owner concluded that he could sell it for much more.
Therefore, he returned double the deposit amount and regained control of the mansion, which he put back on the market for 20 million euros. The first buyer felt cheated and then turned to the Berlin courts to recover the property.
The judge presiding over the case last week summoned Mallorcan lawyer Pedro Munar, a specialist in real estate matters, to testify as an expert witness. He focused on explaining the internal logic of Spanish civil law and interpretation of Supreme Court jurisprudence.
At the heart of the matter was the deposit contract system, a common practice in Spanish real estate transactions but virtually unknown in the German legal system. The proceedings made it clear that German courts find it difficult to understand how properties in Mallorca are bought and sold through private contracts, how contractual positions can be transferred without immediate registration, or how certain issues, such as squatting, can produce legal effects.
After hearing from both sides and from the expert witness, the judge ruled in favour of the property's owner. When Munar explained that the Spanish Civil Code recognises the full validity of verbal consent and that shaking hands can conclude a contract, the German judge, commented that "if that is how it works, Spanish lawyers must have a lot of work to do".
A German expert observed: "All of this clashes head-on with a much more written, formal, and preventative legal culture, such as the German one."