Regional Court of Nuremberg-Fürth Rules in Favor of Consumer Center Baden-Württemberg
Investors in the UniImmo Wohnen ZBI suffered significant financial losses in the summer of 2024 when the value of the open-ended real estate fund plummeted by 17 percent. Now, a ruling by the Regional Court of Nuremberg-Fürth on February 21, 2025, offers hope to affected investors. The court determined that the risk of the UniImmo Wohnen ZBI fund had been underestimated, misleading investors about the actual financial risks they faced (Case No.: 4 HK O 5879/24).
Investors Misled About Risk
For investors, the risk of losing their invested capital is a crucial factor in their investment decisions. However, the risk indicator for the UniImmo Wohnen ZBI open-ended real estate fund was only rated at level 2 and later at level 3 (following the devaluation) on a seven-point scale in the fund’s Key Information Document (KID). This classification suggested that the fund was a low-risk or medium-low-risk investment. As a result, investors were led to believe they were making a safe capital investment, according to MTR Legal Rechtsanwälte, a law firm with extensive experience in capital markets law, which consistently supports investors in protecting their interests.
UniImmo Wohnen ZBI Suffered Massive Losses
Launched in 2017, the UniImmo Wohnen ZBI is managed by Union Investment, the investment arm of Volks- and Raiffeisenbanken, in collaboration with ZBI (Zentral Boden Immobilien Gruppe). The shock for investors came in late June 2024 when a special valuation led to the fund’s real estate assets being devalued by almost 17 percent. As a result, investors lost approximately €860 million.
Such a severe loss would not typically be expected with a risk indicator of 2. The Consumer Center Baden-Württemberg argued that the assigned risk indicator of 2 (later adjusted to 3) was too low, misleading consumers about their actual financial risk.
According to the consumer center, funds with a risk indicator of 2 must have their real estate values reassessed at least once per month. However, in the case of UniImmo Wohnen ZBI, valuations were conducted only on a quarterly basis. Given this, the correct risk rating should have been 6, rather than 2 or 3. The consumer center demanded that UniImmo Wohnen ZBI no longer be marketed with the low-risk classification.
Consumer Protection Lawsuit Successful
The Consumer Center Baden-Württemberg filed a lawsuit to prevent the fund from being marketed with a misleadingly low-risk classification—and won. The Regional Court of Nuremberg-Fürth ruled that ZBI must not continue to classify UniImmo Wohnen ZBI as a low-risk investment since this does not comply with legal requirements.
The purpose of the risk classification scale (1 to 7) is to transparently inform investors about the risks associated with their investment. A level 1 rating represents the lowest risk, while level 7 represents the highest risk.
For investment products aimed at retail investors, such as the UniImmo Wohnen ZBI, a risk indicator of 6 must be assigned if valuations are not conducted monthly or if no appropriate benchmark is applied. Since neither condition was met for UniImmo Wohnen ZBI, the court ruled that a risk rating of 6 was necessary.
Risk Classification as a Decisive Factor for Investors
The risk indicator is essential for investors as it reflects the likelihood and extent of potential financial losses. According to the court, this information is critical for consumers when making investment decisions. Simply calculating daily redemption prices on stock exchanges is insufficient to determine risk exposure.
The classification of risk level is a key criterion for investors to assess their exposure accurately. If the risk level is rated too low, investors are misled about their actual risk, which constitutes a violation of the German Unfair Competition Act (UWG). The court explicitly stated that ZBI must no longer promote UniImmo Wohnen ZBI with an incorrectly low risk classification.
The ruling is not yet legally binding, as ZBI still has the option to appeal.
Potential Compensation Claims for Investors
Despite the possibility of an appeal, this ruling strengthens potential compensation claims for investors. In cases of proper investment advisory services, investors should have been fully informed about existing risks. Furthermore, risk-averse investors should not have been advised to invest in high-risk financial products.
If advisors or fund managers failed to meet their disclosure and information obligations, investors in UniImmo Wohnen ZBI may be entitled to compensation claims.
MTR Legal Rechtsanwälte advises investors of the UniImmo Wohnen ZBI open-ended real estate fund.
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