Defects and deficiencies in property

What is a defect if you have bought or sold a property?

Defects and deficiencies in a property exist when the property is not in accordance with what has been agreed. The starting point for the assessment is what is stated in the agreement. 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.

What is a mistake if you have bought or sold a property?

Even when the sales documents do not state anything in particular, there may be a defect. The question of whether a «defect» in the property is a deficiency in the legal sense is often difficult to determine.

If the buyer discovers a defect in the property, the seller will often reply that he was unaware of this defect and that it is therefore not a defect.

When assessing whether or not there is a defect, the starting point is that the seller's good faith or ignorance of a defect is not decisive. But there are important exceptions.

What is not considered a defect?

Defects or damage caused by wear and tear or normal degradation of materials over time are unlikely to constitute a defect. The fact that something wears out over time is normal, and thus rarely a defect in the legal sense.

What are typical errors and omissions when buying a home?

Mice, rats, bearded dragons, water damage, mould and fungus are examples of common faults and defects after buying a home. You can read the entire the list of typical faults and defects when buying a home here. 

Can damage to the property be considered a defect?

Damage is often a defect if the damage occurred when the seller owned the house. Examples include moisture damage, damaged foundations, large cracks in floors, walls, foundations and so on.

Design defects, construction defects and construction weaknesses will often also be defects. It is important to realise that the standard is assessed in relation to when the house was built.

If the house is old and nothing has been done to the drainage around the house since it was built, this is not normally a defect if the drainage suddenly becomes blocked.

Equipment and machinery that does not work will normally be a defect. However, if the fault occurred during the buyer's period of ownership, there will not normally be a defect.

What are the most common examples of faults and defects in property?

We can divide errors and omissions into three categories:

1. Errors and omissions when buying and selling a home
2. Errors and omissions when remodelling a home
3. Defects and deficiencies in the construction of housing

1. Examples of faults and defects when buying and selling a property:

• There are longhorn beetles in the home
• Water leaks from pipes in the home
• The property has less area than stated
• There are drainage problems in the home

Disputes about defects in the purchase and sale of property are regulated by Act on the disposal of real property, also called the Disposal Act or Disposal Act.

2. Examples of defects and deficiencies when remodelling a home:

• There is moisture in the home
• There is a fault with the electrical system in the home
• There is a bad odour in the home
• The panel has been installed incorrectly and consequential damage has occurred in the home

Disputes about defects and deficiencies in home remodelling are often governed by Act on craftsman services, also called for Craftsman Services Act. You can read more about dispute about craft services here.

3. Examples of defects and deficiencies in the construction of housing

• The house is incorrectly constructed
• There are cracks in the tiles in the bathroom
• Incorrect slope towards the drain in the bathroom
• There is a fault in the ventilation system in the home

Disputes about defects and deficiencies in the construction of a new home are governed by Act on contracts with consumers for the construction of new housing, also called for Housing Listing Act.

What does it mean that the property is «sold as is»?

When a second-hand home is sold «as is», responsibility for any faults and defects is shifted to the buyer. However, provisions in the Sale of Goods Act mean that the seller can be held liable for faults and defects in the property.

What must the seller disclose?

The seller must provide correct information about conditions in the property that are relevant to you as a buyer. If the seller has had pests or water leaks in the property, they are obliged to disclose this. The seller cannot be held responsible for faults or defects that he or she is not aware of.

What can I complain about?

The buyer cannot complain about faults and defects that he was aware of, or should have been aware of, when the agreement was entered into. This is regulated by the Sale of Goods Act.

Who can I complain to?

You can complain to Financial Complaints Board if the seller has change of ownership insurance and you cannot reach an agreement with the insurance company. You can also send a written complaint to Housing Disputes Board or The Consumer Council in cases where this is relevant.

If the owner does not have title insurance, you will need to contact a lawyer who is an expert in property law and take the case through the legal system, with Conciliation Board as the first instance.

What are the deadlines for complaints about faults and defects in property?

If you discover faults and defects in the property, you can make a claim against the seller. Such a claim is often referred to as a complaint, and in practice it involves notifying the seller that there are faults and defects in the property and that it may be necessary to make a claim against the seller. If you do not make a complaint in time, you may risk losing your claim against the seller.

Section 4-19 of the Norwegian Sale of Goods Act distinguishes between the absolute and relative complaint periods. This means that the five-year warranty period does not apply unless the buyer notifies the seller of the fault or defect within a reasonable time. In this context, «reasonable time» means two to three months after the defect was discovered or should have been discovered.

It is the relative deadline for complaints that is the most important deadline to adhere to of these two.

How do I complain about faults or defects in my property?

The law firm Halvorsen & Co has the following advice:

1. Get in touch with the seller

If you discover faults or defects, you should contact the seller or the seller's insurance company to complain about the conditions you have discovered. This should be done in writing. You can download the complaint letter from the Consumer Council here.

2. Advertising within a reasonable time

The main rule is that you must complain within a «reasonable time» after the defect has been discovered or should have been discovered.

3. Take action right away

It's important that you don't remain passive in a potential dispute. If you discover a fault, you should address the issue immediately. It's unwise to wait to accumulate a list of faults and defects that you'll have to deal with later. In that case, important complaint deadlines may have expired, and your chances of getting compensation or a price reduction will be reduced.

4. Get in touch with an appraiser

An appraiser is important for assessing faults and defects in the property. That's why it's important to choose an independent appraiser in such disputes. It is also a good strategy to choose an appraiser who has the expertise to assess the defect or deficiency you have discovered in the property.

What rights do I have in disputes about faults and defects in property?

As a buyer, you have several options vis-à-vis the seller in a dispute.

• Withhold the purchase price. You can withhold the amount it will cost to rectify the defect.
• Require rectification. The seller must, at its own expense, rectify the defect within a reasonable time and without significant inconvenience to you.
• Demand a price reduction. You have the right to demand a price reduction corresponding to the costs you incur in having the defect rectified.
• Cancel the agreement. If the defect constitutes a material breach of contract, you can cancel the contract.
• Claim compensation. You can claim compensation for the financial loss you have incurred as a result of the defect. This compensation is in addition to rectification, price reduction or cancellation of the contract.

Is it possible to mediate disputes about defects and deficiencies in housing?

In a property dispute, mediation can often be a good alternative to a harrowing and costly court case. One alternative is to use a lawyer to mediate between the parties. 

Do I need a lawyer in a dispute about faults and defects in my home?

The answer is yes. Such disputes are often characterised by a high level of conflict and poor communication. It is also difficult to know which laws and regulations apply. You should therefore contact a lawyer who is an expert in property disputes.

What constitutes a defect or deficiency is not always easy to determine on your own.

It may therefore make sense to contact a lawyer who is an expert in property disputes, such as Line R. Petersen or Benjamin Nordhaug.

Do I have to pay for a lawyer myself?

In the event of a dispute, your home insurance or villa insurance will normally have a 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 such cases. 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 locations:

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

We always offer a free consultation. Get in touch with us today.