Home Buyers Insurance - What does it actually cover?

Have you bought a house with defects and want to make a claim against the seller? Buying a home is one of the most important investments most of us will ever make. That's why it's crucial that the property meets our expectations and is in the condition we expect.

‍

If you as a buyer discover defects in the property after the purchase, it may be a good idea to contact a lawyer for guidance in the claims process. If you have home contents insurance, it will probably cover the cost of a lawyer up to NOK 100,000. 100 000. As a rule, the policyholder only has to pay a deductible of between NOK 2,000-5,000, plus 20 percent of the expenses incurred in excess of the deductible. In other words, the insurance company covers the lion's share of the legal expenses. The threshold for contacting a lawyer should therefore not be high, especially if you fear high legal costs.

‍

Example: if the total legal costs are NOK 60,000 and the deductible is NOK 2,000, in addition to the NOK 2,000, you must pay 20% of NOK 58,000 (NOK 60,000 - NOK 2,000). In this case, you must therefore pay a total of NOK 13,600 yourself. In other words: your home contents insurance will potentially cover a large part of your legal expenses.

‍

The insurance company may also cover expenses in connection with the preparation of a valuation report or expert report.

‍

The insurance contract regulates the conditions that must be met in order to obtain legal aid coverage through the home contents insurance. As a general rule, legal aid is granted from the time a dispute arises. A dispute arises if you submit a claim and the other party refuses, i.e. at the time the disagreement arises. A lack of response from the other party (inaction) may also mean that a dispute exists under insurance law.

‍

ATTENTION: The insurance contract must have been concluded before the dispute arises. If the insurance was taken out after the dispute arose, the insurance will probably refuse legal aid coverage.

‍

It is also good to know that the insurance generally does not cover expenses greater than the financial interest in the case.

‍

If you have questions or need help with your case, book a free consultation with us here.

Buying a home is a big investment and for most people the biggest financial decision of their lives. Unfortunately, for some, the home turns out not to be what they expected. There may be serious defects or deficiencies that were not disclosed in advance. In some cases, these deficiencies may be so serious that you have the right to cancel the home purchase. But what does canceling a home purchase actually mean, and what does it take to be able to claim it?

‍

What does it mean to raise a home purchase?

When a home purchase is cancelled, it means that the purchase agreement is terminated. The home is transferred back to the seller, and you get the purchase price back. The parties should initially be treated as if the purchase had never taken place – you should receive compensation for any enrichment you have caused to the home through renovation work, but deductions for the benefit you have had from the home. However, a cancellation settlement is an intrusive legal action, and strict requirements are therefore imposed for your claim to be successful.

‍

When can you request to cancel your purchase?

In order to cancel a home purchase, there must be a defect that constitutes a material breach of contract. That is, the defect must be so serious that it constitutes a clear breach of the contract and makes it unreasonable to expect you, the buyer, to be bound by the contract.

‍

When is a defect considered a material breach of contract?

A specific assessment must be made to determine whether the threshold for "material" has been reached. The assessment emphasizes, among other things, the following points:

• The defect's significance to the buyer : Does the defect have a major impact on the use of the home?
• Financial scope : How much is the shortfall in value, compared to the purchase price?
• Buyer's reasonable expectation : What could you, as a buyer, reasonably expect from the home? This can vary, among other things, depending on whether the property is new or old, has been marketed to a high or low standard, or has cost a lot or little in relative terms.
• Whether a price reduction is an adequate alternative : If a price reduction will restore the financial consequences of the breach of contract, and function as full financial compensation, it will take a lot to demand rescission.

Typical examples of defects that may provide grounds for an increase include extensive moisture and rot damage, illegal construction or construction defects that significantly shorten the life of the home.

‍

How are you progressing?

If you are considering raising your home purchase, it is important to act quickly and document everything. Follow these steps:

‍

1. Complain in writing : Notify the seller as soon as you discover the defect. This must be done within a reasonable time – normally within 2–3 months. If you wish to cancel, you must notify this within the same period. This is not necessary if you are only requesting a price reduction or compensation .

‍

2. Document the defects thoroughly : Use professionals, such as appraisers or building consultants, to document the damage. Photos, reports, and emails can be important evidence .

‍

3. Seek legal assistance : Revocation is a demanding process. An attorney experienced in property disputes can assess whether the conditions are met and represent you, if necessary in court. The earlier the attorney is involved, the better advice you will be able to get to navigate the case.

‍

Do you need legal assistance?

Canceling a home purchase is possible, but only when there is a defect that constitutes a material breach of contract that makes it unreasonable to expect you to abide by the agreement. If you are unsure of your rights, it may be a good idea to contact a lawyer with experience in home purchases .

‍