Let’s imagine a horrible situation that you have bought a house in the Netherlands and later after you signed the purchase agreement, you discover defects and deficiencies. For instance, a fault occurs to the existing equipment like bathtub, lavatory and the existing internal damages of the wall, etc. So then, how could you protect self-interests under such circumstances?
- The importance of the purchase agreement
According to Dutch Civil Law Article 7:1, the purchase and the sale of real estate property must be recorded in a written agreement, i.e., the purchase contract. The purchase agreement can either be drafted in Dutch or in English. You can propose to apply a NVM agreement, or a custom agreement drafted by the (private) seller, as long as it is operated under Dutch Law. It is worth noting that the legal rules on defects are not compulsory, which means the parties can agree on extra promises upon the contract. In many situations, the model agreement is used when considering buying or selling existing homes. On the basis of the purchase agreement, all defects to the delivered house are in principle for the account of the buyer, however, an exception is made for defects that can prevent normal use of the home.
The content in the agreement is crucial because they can provide you certain rights to the prospective property. Additionally, if you make extra documents including written communications for example, they can be used as ancillary evidence in case a dispute is risen.
- After the transfer of the ownership for a pre-existing house
In general, when the buyer owns the house, all the accountability relating to the house is assigned to him or her. The buyer and the seller are respectively required to fulfil relevant obligations towards latent defects.
(1) For the seller – the obligation of an exhausted disclosure
Dutch Law prescribes that the seller is responsible to disclose all the information and details about the purchased property to the buyer, including an overall summary about the status thereof. Any non-disclosure or proved false information, in this case, will lead the seller to be responsible for the defects and deficiencies.
(2) For the buyer – the call for a full examination
After the full examination of the house conducted by the buyer, the seller is not liable for defects if somewhere or something is too obvious. Moreover, the age of the house amounts to certain influences for the buyer about whether he or she could complete a thorough examination of the house. It has always been suggested to have a structural inspection and a report conducted by independent professional. It would be difficult for the buyer to further hold the seller responsible if the buyer fails to fulfil such examining obligation.
(3) Hidden defects cause the difficulty to a normal use of the house.
III. When the ownership of a newly built house transfers to the buyer: who will be liable for the defects?
In case there was no previous inhabitant, the party who will be liable for defects and/or deficiencies is the building contractor or real estate developer. The building contractor is required to precisely direct and advise the buyer to conduct a relevant examination. Also, the buyer should sign delivery documents to declare the acceptance of the property after the examination. It is always advisable and important to the buyer to have an independent professional to inspect the premises and make a report.
After the new house is transferred to the buyer, the building contractor is obligated to fix every deficiency that the buyer noted and informed him or her during the guarantee period. It is better to carefully preserve every relevant record of written documents and inform the building contractor about all the potential problems as soon as possible, to acquire the best interests for the buyer.
In addition, for hidden defects of a newly built house, the building contractor is responsible up to five years; for those seriously significant problems, this obligation extends to 20 years.
- What to do in case of a hidden defect and what does the law say?
When the buyer discovers a hidden defect of the house, he or she has to alert the previous owner or the building contractor within a reasonable time after the moment of the discovery. If the latter does not seem to fix the defects or provide restitution of the damage, the buyer is advised to file a suit. According to Dutch Civil Code Section 7:17 (1) and (2), it states that the delivered house must have the qualities that the buyer could have expected on the basis of the agreement. This is a so-called ‘conformity requirement’. The law states that a buyer can assume in any case that the house should be suitable for a ‘normal use’, which means the house can be seen as a house with some durability in a usual way. If the delivered house is not suitable for normal use, the seller is liable for the defects that prevent the normal use. However, if the buyer fails to fulfil the obligation to perform an examination over the house, the seller will not bear any liabilities to any kinds of defects to the house. For this matter, the seller cannot claim the buyer for not having fulfilled his obligation to investigate if he or she, as a seller was aware of the defect, but did not inform buyer properly on time. This duty of notification of the seller weighs heavier than the obligation to investigate.
All in all, if you find significant defects regardless of the house is newly built or an old one, when considering taking legal action, a real estate lawyer can scrutinize the purchase agreement for you and can help you determine whether your findings are counted as legal defects under the purchase agreement with the (private) seller. The lawyer can later set up a negotiation meeting with the seller to reach a mutual settlement agreement or represent you before court if you wish to file a suit.
If you have questions in this field of real estate law, we are pleased to discuss with you by phone or email. You can reach out to us via email firstname.lastname@example.org or email@example.com, or call us by +31(0) 30 23 00230 or +31 (0) 85 48 35230.
 NVM stands for the Dutch Association of Real Estate Brokers and Real Estate Experts NVM. The NVM is the largest association of real estate brokers in the Netherlands, with more than 110 years of experience. When you buy a house you want to be certain that everything is being done properly.
 An existing house means the buyer is not the first inhabitant