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Sale of used dwellings

Latent defects

A used dwelling or property is not new and the effects of age should be taken into account when housing is purchased. The buyer cannot complain about a matter that should have been noticed during the normal inspection of a used dwelling before a contract was signed. It is not necessary to have a condition inspection performed, but a consumer cannot file a complaint concerning a matter that should have been noticed with normal care and information.

This includes such things as natural wear of surface materials or loose tiles. When a house is inspected, the age of pipes, electrical wiring and the heating system must be taken into consideration, for example. In general a consumer cannot demand compensation from the seller for any defects that arise at the end of their normal life, provided correct information has been supplied concerning them or the age of the building.

Complaints concerning the sale of used dwellings most often involve a latent defect.

A latent defect is one that the seller has been unaware of and the buyer has not observed while inspecting the dwelling.

Not every deficiency in a dwelling is a defect. The deficiency must be significant before claims can be presented to the seller.

The age of the dwelling is an important factor in this respect. Natural wear is not a defect. Other factors must be taken into account, however, such as the price and the information supplied by the seller.

Within certain limits a buyer can also complain about an original defect in a dwelling to the founding shareholder, which first sold the dwelling.

False or inadequate information

A defect may also exist if the seller has provided false information or has concealed information concerning a dwelling. If this information would have had an influence on the conditions of sale, such as the price, this constitutes a defect.

Additional information on the sale of used dwellings is available on the Consumer Agency's website.

Making a complaint to the seller

The buyer should not delay in complaining about a defect to the seller. According to the law, a defect in a used dwelling must be reported to the seller within a reasonable period after it is detected. In deciding what constitutes a reasonable period, one must remember that it often takes time for a buyer to determine the significance of a defect.

No absolute rule can be given as to what constitutes a reasonable period. It depends on the case.

Complaints about housing transactions between private persons must be filed within two years of delivery. Complaints cannot be filed after this period even if a defect is only detected later on. The time limit for real estate is five years.

The deadline for complaints can only be extended in cases where the seller has shown gross negligence or acted dishonesty or in bad faith. These deadlines have, however, no effect on the buyer.s duty to report the defect within reasonable period.

Consequences

The buyer of a new dwelling can demand that the seller correct a defect. On the other hand, the seller has the right to correct the defect before other forms of redress are taken.

The buyer of a used dwelling cannot demand that the seller correct a defect. The most usual consequence is a reduction in the price.

If a defect has caused damage and has been due to the seller's negligence, the buyer is also entitled to compensation for damage.

In some cases the sale can also be cancelled. This requires a major breach of contract on the part of the seller. A sale may not be cancelled because of defects that can be repaired. Nor may a sale be cancelled if a defect is not very significant, even if it cannot be repaired. In this case the buyer must accept a reduction in the price.

 
Published 15.7.2013