Threatening to end the HOAI’s maximum and minimum rates?

Testing maximum and minimum rates for engineers and architects: why February 28 is an important day for HOAI.

Photo: panthermedia.net/alfexe

Photo: panthermedia.net/alfexe

Due to the fee structure for architects and engineers (HOAI), an infringement procedure is currently under way EU Commission against the FRG. The main issue is the binding maximum and minimum rates. Thomas Senff, who heads the building law practice group of the law firm GvW Graf von Westphalen, explains the background to the proceedings and the consequences for the HOAI of overturning.

hota.info: Dr. med. Senff, what is the conflict about the HOAI actually?

Thomas Senff: Since 1977, the fee regulations for architects and engineers, or HOAI, have applied in Germany. The law sets binding fees that architects and engineers are only allowed to undercut or exceed in a few exceptional cases.

The legislator wants to prevent architects and engineers from being driven into ruinous price competition. Because that would eventually lead to the quality of performance likely to suffer significantly. In my view, the HOAI is also consumer-protective in nature.

The European Commission, however, believes that the fee structure conflicts with the EU Services Directive. Directive 2006/123 / EC of the European Parliament and of the Council on services in the internal market of 12 December 2006, the full title of which states that every EU citizen within the EU is free to offer its services. For this reason, the European Commission initiated infringement proceedings of the EU Treaty in 2015 and, on 23 June 2017, brought an action before the European Court of Justice against the Federal Republic of Germany. The file number is C-377/7. The last hearing was on 7 November 2018.

To what extent is the freedom of establishment affected by the HOAI?

The European Commission argues among other things about the price differential within the EU. It argues that foreign suppliers can not take advantage of their cheaper cost structure because of the HOAI in Germany. Freedom to provide services means for the European Commission first and foremost that every market player can offer unlimited services without having to be forced into a price corset. Any kind of restriction would be considered a violation from this point of view.

From the German point of view, such an argument is of course difficult to understand. The Federal Government, the Federal Ministry for Economic Affairs and Energy, has stated that there is a direct correlation between minimum rates and the quality of the architects ‘and engineers’ performance. However, the EU Commission is unable to recognize this connection. Here, EU law meets good German practice.

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