Articles

Oftentimes real estate disputes manifest in the buyer’s expectations when they buy an old property. The buyer might have bought a property advertised being in good condition in the listing, yet later problems are discovered. The seller might hold onto their view that not even substantial needs for repairs are unexpected due to the property being decades old, even approaching a century.

Property condition inspections do not usually include tearing any structures apart to find defects. A good inspector is able to pinpoint any particular structures and points of greater risk, but possible material defects such as leaks or dysfunctional structures like old wiring cannot usually be detected on the outside. Many sorts of condition inspectors also exist and often the condition inspection is left too superficial.

On the other hand, the contracting parties unfortunately rarely conduct inspections within the structures before closing the transaction, even when the condition inspector had recommended them. The seller’s incentive is to get the property sold and any extra holes used for inspections may hamper the sale or lower the asking price. The buyer might be so thrilled of the property that they forget their caution and do not inspect the property well enough. Material defects and other problems usually are discovered only after closing the transaction, when the buyer for a reason or another begins to inspect the property in more detail.

A material defect requiring repair measures might be e.g.

– a microbial defect
– a dysfunctional property drainage system (French drains)
– a leaky roof

A fact having great significance is what kinds of renovations have been conducted on the property during the property’s lifetime. Should drainage system be replaced five years ago the buyer is entitled to expect that the drainage system functions as it should. On the other hand, if the drainage system was built 40 years before the closing of the sale the need for its replacement cannot be consider unexpected similarly.

 A Latent Defect

Usually defects burdening real estate disputes manifest as latent defects, which cannot be discovered before the sale, and as such, cannot be disclosed by the seller. As a general rule we can say that the older a part of the property is the more likely it is in need of be repairs in the foreseeable future. If such a part of the property breaks down is not necessarily considered a defect. On the other hand, if the building has been renovated thoroughly the buyer may rightfully have high expectations of such a property.

When a defect is discovered the buyer gives a notice of the defect to the seller and usually claims a price reduction. The seller often denies the claims. The vital justification of the seller to deny any liability is that due the latent defect has no significant, adverse impact on the value of the property and such the buyer is not entitled to receive any compensation. The essential dispute is what the buyer is entitled to expect of the building on the property.

The parties of the dispute often appeal to an RT Report Card concerning the structural life span of a part of a building (RT 18-10922) to credit their claims. When the structural lifespan of a part of the building or an appliance is over they should appropriately be replaced. The RT-report is merely meant to instruct, often structures last significantly longer than the lifespan in the card. The building site and maintenance measures affect the lifespan greatly.

Certain parts of a building are not given a technical lifespan. These include skeletal structures, which are expected to last for the entire service life of the building. Buildings as a whole have no technical lifespans and researchers disagree on how long a building should last until it is demolished and a new one is built.

To summarize, we can state that the older and poorer in condition a building is at the time of closing the transaction the more difficult it is to claim a defect. If the building is renovated and in good condition the chances are better that a claim succeeds. It must be noted though that a property sold for residential use should be suitable for this purpose without major renovations. Should there exist substantial and wide microbial damage which causes health risks in the building, it is usually a defect which makes the buyer entitled to be compensated.

English translation by Lasse Jelekäinen