Defects and Building Contracts

An owner of a single-family home encounters at times need to renovate. Sometimes it might be a big and through renovation from floor to the ceiling, or it can be all about a minor facelift to refresh the interiors or exteriors. Renovations having done by a private person are regulated by the Consumer Protection Act. The Act exist mostly to protect the consumer and is mandatory law. This is why the consumer in most occasions has the right to invoke to the Act, no matter if there is a contract between the parties which states otherwise. This contrasts to discretion based legislation, also common in Finland, which is only applied to a case if the parties have not agreed otherwise.

A renovation project starts with putting the request out for tender and choosing the contractor afterwards. Oftentimes no written contracts are made between the contractor and the buyer, even if it would be beneficial to the buyer. Spoken contracts and deals are in Finland as valid as written ones before the law. Should there be a conflict of interests between parties a written contract can be used to examine what the deal has been in terms of price, content and delivery time. If the contractor wishes to use standard terms and conditions within the contract the buyer should carefully check them through.

What must buyer do in case of a defect or misconduct?

A defect can be a building defect. It is also possible that the outcome of the renovation cannot be regarded complying with the terms agreed. It is important that the buyer reacts in timely manner and make a written complaint to the contractor. In the complaint the defects must be defined and explained as accurately as possible. If the consumer is unsure of the outcome of the building contract it might be wise to get an expert to see the outcome and tell their own opinion.

As per the Consumer Protection Act, the consumer cannot invoke to a defect if they fail to inform the contractor in a reasonable time after the consumer detected the defect or should have noticed it. The consumer must act swiftly in regards of the complaint, for the deadline for complaint runs even when the buyer is unaware of the defect if the buyer should have been able to detect the defect with careful examination. The consumer must examine the outcome carefully immediately it has finished. Should defects or misconducts be detected  during the contract itself they must be informed to the contractor with no delay.

Reasonable time is open to interpretation. Reasonable time can be regarded being weeks rather than several months. A complaint can be filled out later, should defects be detected over time.

In case of a defect the buyer is entitled to refuse of the payment unless the remaining contract price exceeds the claims to which the buyer is entitled due to the defects. In addition, the buyer is entitled to demand for rectification of the defect. The contractor is also entitled to rectify the defect out of their own act. The common practice is that the contractor may attempt to rectify the defect should they offer to do that immediately after receiving the complaint. The buyer is entitled to reject attempts to rectify the defect should such attempt cause detriment or a risk of the expenses not being compensated to them. The buyer is also entitled to reject should there exist other particular reasons.

If rectification of the defect is out of question the buyer is entitled to claim a refund or in the last resort cancellation of the contract. A refund must meet the severity of the defect. Usually, when determining the sum of a refund, the repairing costs of the defect can be used to draw conclusions. If the contract is canceled both sides must return their fulfillments and payments. When it comes to renovations however, there exists a problem due to a renovation contracts being services, which cannot be returned to the contractor. The components of the contract that have already been fulfilled can only be canceled in case no other reimbursement methods are considered fair. In terms of fulfillments the buyer must compensate the contractor the amount the fulfillment is worth. The buyer can also be entitled for damages, if they the defects caused damage. The contractor is responsible for indirect damage only if the defect was due to their negligence.

Arbitration with the contractor is highly recommended, for taking the case up to the Court is slow, expensive and its outcome uncertain.

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