Housing Construction Act

What is the Residential Property Listing Act?

The Residential Property Construction Act is a law that regulates rights and obligations when building a new home or holiday home for private use. The Act regulates most cases where the seller is a business and the property is a new build.

The Residential Property Listing Act is also known as the Residential Property Listing Act. The full name of the act is Act on contracts with consumers for the construction of new housing etc..

What is regulated by the Housing Construction Act?

The law regulates agreements between consumers and contractors for the construction or remodelling of real estate, and also applies to owner's sections and housing cooperative shares.

The law only applies in cases where work on the property has not yet begun at the time of the agreement, or the construction has not yet been completed. However, there are exceptions to this. The complete remodelling of a property can also be regarded as construction. This is assessed in each individual case.

The law also applies to agreements that regulate the purchase of land and the construction of housing on the land, as long as the work to be carried out by the contractor has not yet been completed.

What is not regulated by the Building Construction Act?

The law does not apply in cases where the home or holiday home is purchased second-hand. This is regulated by Disposal Act, or Act on the disposal of real property.

The law does not apply to the construction of garages or outbuildings that are not suitable for residential purposes. This is regulated by Craftsman Services Act, or Act on craftsman services etc. for consumers.

What is a defect when you have bought a new home?

Defects and deficiencies in property is when the property is not in accordance with what has been agreed, or is not in line with rules and regulations. The starting point for the assessment is what is stated in agreements. If it is stated in the agreement or in the prospectus that the house should have certain properties that it turns out not to have, there is normally a defect.

See the list of typical faults and defects when buying a home here.

What is a delay when buying a new home?

If the property is not completed by the deadline agreed between the parties, there is a delay on the part of the contractor. This applies even if the buyer does not pay by the time agreed with the contractor.

What claims does the buyer have in the event of a delay by the contractor?

If the property is not completed by the agreed deadline, the buyer can:

• Withhold the purchase price
• Demand that the defect be rectified
• Demand a price reduction
• Cancelling the purchase
• Claim compensation
• Demand daily fines

The most common solution in such cases is to charge a daily penalty for a delay. This is a daily fine, also known as a daily penalty, for each day of delay.

Daily penalties shall be one per cent of the total payment due to the contractor, but it is also possible to agree on daily penalties that are higher than this. It is not possible to demand daily penalties for longer than 100 days.

What claims does the seller have in the event of a delay by the buyer?

The Building Construction Act also gives the seller rights. If the delay is due to the buyer, the contractor can stop the work, demand extra payment, terminate the agreement, claim compensation, as well as claim interest and compensation for loss of interest.

How much can the seller require me to pay in advance?

The Building Construction Act limits how much you are obliged to pay in advance when buying a new home if this has not been agreed.

If the contractor does not provide the guarantees required by law, you are not obliged to pay anything upfront at all.

What is a takeover transaction?

In a takeover transaction, the buyer and seller will sign a takeover protocol or takeover declaration. This is documentation that the takeover has been completed. This process is called a takeover transaction.

The contractor shall send a written notice convening the takeover meeting at least seven days before the takeover date.

What do I need to think about before a takeover transaction?

A takeover transaction is important to ensure that the terms of the agreement are fulfilled and that the buyer and seller avoid a potential dispute afterwards.

As a buyer, you may lose important rights if you discover faults and deficiencies in the property without the handover process being completed, or if it is completed without your objections.

The law requires both the buyer and the seller to attend. If one of the parties fails to attend, the other party can demand that the takeover is considered completed. The property is also considered transferred if the property is completed and the buyer has started using it.

What happens at the takeover?

At the time of taking possession, the buyer and seller go through the property together, both inside and out. It's important that the buyer checks all the details thoroughly to point out any faults or defects. It's a good idea to bring along an experienced professional or an appraiser who knows the requirements set out in regulations on materials and craftsmanship.

What is a takeover protocol?

In the event of a takeover, a takeover protocol must be written and signed by both buyer and seller. This should contain the following:

• Date and time of takeover
• Who is present at the takeover
• Whether the property has been cleared and cleaned
• Whether keys have been handed over
• Whether electricity and water meters have been read
• Any defects and deficiencies in the property
• If the buyer and seller agree on the defect
• Deadline for rectifying the defects

What happens if I discover faults and deficiencies during the inspection?

At the time of takeover, the risk for the property will pass from the seller to the buyer. If you as a buyer discover faults and defects during the takeover, the Housing Construction Act gives you the right to:

• Withhold part of the purchase price
• Demand rectification of the defect
• Claim compensation

All defects and deficiencies should be noted in the handover protocol as precisely as possible. It is important that all faults and defects are reported. If the buyer chooses to withhold part of the purchase price until the situation has been rectified, it is important that the buyer instructs the estate agent to do so, so that the purchase price is not transferred from the estate agent's client account to the seller until the defect has been rectified.

Remember that you as the buyer can only withhold a sum commensurate with the cost of rectifying the defect.

What happens after the takeover transaction has been completed?

As a consumer, you lose any rights you had before the takeover when the takeover transaction is completed:

• You can no longer cancel or rescind your purchase
• You must insure the building yourself
• Any daily penalties stop running
• Complaint deadlines start to run
• The seller is entitled to payment for the sale

What rules apply to complaints under the Building Construction Act?

The Building Construction Act provides a five-year deadline for complaints. However, it is important that you complain within a reasonable time of discovering the defect. In practice, this means as soon as possible, and preferably during takeover. You can read more about complaints here.

Is there a statute of limitations when buying a new home?

Your claim will become time-barred if three years pass without repairs being made. This applies even if you have made a complaint within a reasonable time and within the complaint period of five years. That's why it's important to ensure that any faults and defects are rectified.

If you discover a defect after three years, there will be an additional period of one year from when you discovered the defect or should have discovered the defect.

If the seller fails to rectify the defect, you can interrupt the limitation period by taking the case to court. It is also possible to interrupt the limitation period by appealing the case to Housing Disputes Board.

How do I complain about buying a new home?

You must complain in writing to the seller if you want to complain about faults or defects when buying a new home. The Consumer Council has created a standard complaint letter to the seller that you can download here.

If the seller is bankrupt, you can submit a claim to the guarantor. A guarantor is normally a bank or insurance company with which the contractor is legally obliged to enter into an agreement. Such a guarantee must be in place when a contract is entered into.

Do I need a lawyer?

Disputes about the Building Construction Act are often characterised by a high level of conflict and poor communication. It is also difficult to know which laws and regulations apply.

It may make sense to contact a lawyer who is an expert in property disputes, such as Jørgen Bugge.

Do I have to pay for a lawyer myself?

Your home contents or house insurance will normally include legal expenses insurance, which covers up to NOK 100,000 of your legal expenses in the event of a property dispute. You must cover a deductible under the insurance. The lawyer will then continue the dialogue with the insurance company on your behalf.

Why should I choose Advokatfirmaet Halvorsen & Co?

For almost 30 years, we have assisted many clients in cases concerning the Residential Property Listing Act. Our lawyers are experts in property law and have extensive experience.

Advokatfirmaet Halvorsen & Co helps clients with faults and defects in housing in the following regions:

Oslo, Drammen, Asker, Bærum, Ringerike, Hønefoss, Ski, Follo, Ås, Kolbotn, Vestby, Nordby, Moss, Enebakk, Indre Østfold, Hurum, Drøbak and Nesodden.

We always offer a free consultation about your property dispute. Get in touch with us today.