Concealing Defects Puts Real Estate Seller at Risk

The legislator has imposed an obligation on the seller to inform the buyer of all known defects in the property. Unfortunately, we often see how sellers become evasive when a notary asks about the defects of the real estate being sold. They don't know what constitutes defects, what to say or leave unsaid, and ultimately don't dare to say anything.

It seems that a large proportion of real estate owners are unaware that their responsibility for the property does not end with signing the purchase and sale agreement and handing over the keys. If the buyer discovers a defect within a reasonable time period, of which he was not aware when concluding the contract, the seller is liable for non-conformity of the property with the contract terms. The buyer then has the right to demand compensation from the seller for remedying the defect or even to reverse the purchase and sale agreement.

Which defects should definitely be disclosed? The rule is that residential real estate must comply with the requirements set for residential premises. Therefore, one must certainly mention heating fireplaces, heating systems, electrical wiring, roof waterproofing, and whether there are subsidence or damaged areas.

Hidden defects are those that the buyer did not know and should not have known about. For example, he moved to a new home in summer, but only when the heating season begins does it become clear that the radiators won't get warm or the stove can't be heated. Or with the first rains, it turns out that the roof is leaking somewhere near the chimney. In such cases, the previous owner who knew about the defects but remained silent bears the responsibility.

According to the law of obligations, there are three further solutions. First, the buyer can demand that the seller remedy the defect. The second option is to make the repairs himself and demand reimbursement of costs from the seller.

The last option is to cancel the purchase and sale transaction

For example, last year just before Christmas, people who had moved into a new home discovered that the concrete floor on the first floor had subsided. Although they had visited the house several times, they had not noticed it. The buyers requested compensation that the seller is not willing to pay and would prefer to reverse the contract instead. However, the new owners, who have already settled into the house, do not agree with this – they want to continue living there. If the two parties cannot reach a mutually satisfactory agreement, they must resort to legal proceedings.

To avoid such unpleasant situations, all defects must be honestly stated in the contract. If a chimney damper or stove vent is broken, then it should also be noted. When a defect appears, the buyer must notify the seller of the property's non-conformity with the contract terms within a reasonable time period. Notaries interpret the reasonable time period differently, typically it is a couple of years. In practice, the buyer should file a complaint when the defect appears. If it turns out that the heating fireplaces of a house purchased in summer cannot be used, the seller should be informed of this immediately and certainly in writing, for example by email.

Source: Arco Vara Real Estate Office