Who is responsible for defects or damage to the property?

What can you do if you discover defects in your property after purchasing it?
If the cost of rectifying the defects is substantial, I recommend checking whether the seller or the building surveyor can be held liable, or whether the damage is covered by the change of ownership insurance or home insurance.

The seller is generally exempt from liability

The seller of the property is generally exempt from liability if it has been agreed that the Consumer Protection Act on the purchase of real estate applies to the transaction.
The prerequisite for this exemption is that the buyer has received a condition report, an electrical installation report, an offer for change of ownership insurance, and the seller’s offer to pay half of the insurance premium for the change of ownership insurance.
If the buyer has received these documents before signing the purchase agreement, the seller cannot generally be held liable for defects in the property.

Seller’s liability for defects

However, the seller may be liable for defects in the following cases:

• If the seller has provided a warranty. For example, the seller may have guaranteed that there is no oil tank or oil contamination on the property.

• The situation violates an easement or public law, unless an electrical, heating, ventilation, or plumbing installation is illegal under public law.

• The seller acted fraudulently or with gross negligence. For example, the seller concealed mold, water damage, or other conditions that significantly affect the property.

• The seller built the building for the purpose of selling it.

In these cases, there is a possibility that the seller may be held liable for defects or damage.

Seller – proportionate reduction of the purchase price

The seller may, in certain cases, be ordered to make a proportionate reduction of the purchase price.
This may apply even if the seller was unaware of the defects and there is no basis for a claim for damages.

The building surveyor

If the condition report prepared by the building surveyor contains errors, the first step is to file a complaint with the surveyor.
The surveyor may fully or partially acknowledge the errors in the report and offer to cover the costs of rectification in whole or in part.
The surveyor may also reject the complaint. In this case, the next step would be to file a complaint with the Disciplinary and Complaints Board for Licensed Building Surveyors.

Change of ownership insurance

Change of ownership insurance typically covers the costs of repairing hidden defects that were present at the time of handover and not listed in the condition or electrical installation report. These may include settlement damage or mold.
The insurance may also cover the cost of repairing illegal electrical installations, illegal plumbing, technical assistance in investigating defects, and the costs of any necessary relocation.
Coverage under change of ownership insurance is specified in the policy terms and conditions and also depends on whether supplementary cover has been purchased.
There is a deductible of DKK 5,000 to 10,000 per claim under change of ownership insurance.
If the insurance denies full or partial coverage, you can file a complaint with the Insurance Complaints Board.
If the Insurance Complaints Board rejects the claim, legal action can be taken to obtain a judgment ordering compensation for the damage to the property.

Home/buildings insurance

You should check whether the damage might be covered by your home or buildings insurance. For example, if there is hidden pipe damage or if the damage was caused by mold or rot.
In this context, it should be noted that insurance generally only pays if the damage results from a sudden event.

Complaints

The buyer must complain to the seller within a reasonable period after discovering, or when they should have discovered, the defects. Otherwise, the buyer loses the right to claim the costs of rectifying the defects from the seller.
You must also report the defects in writing to the change of ownership insurance company as soon as possible.

Do you have further questions?

Call lawyer Anders Stig Vestergaard for a free preliminary consultation:
📞 +45 2324 3039 or +45 8613 0600