Buying and selling a home

Many people are offered homebuyer insurance by real estate agents - but what does this insurance actually cover, and is it worth the money?

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Briefly summarized

Homebuyer's insurance is an insurance that entitles you to legal assistance in connection with the purchase of a home. You are also entitled to expert assistance, such as appraisal reports and other investigations necessary to uncover the extent of the defect. It does not cover the repair of the actual defects and deficiencies in the home, but the legal fees you incur if you have to complain or take legal action against the seller.

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This is completely different from home seller insurance, which the seller can and should have. There, the insurance protects against financial loss and covers costs related to hidden defects or deficiencies that are discovered after the sale. In other words, home seller insurance is a liability insurance, which also covers legal assistance if you are sued after the home sale.

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This is what homebuyer insurance covers:

• Legal assistance: The insurance covers legal assistance if you discover errors or defects in the home after taking possession and wish to complain to the seller.
• Legal costs and reports: If the case has to go to court, or technical documentation from an expert is required, the insurance usually covers these expenses.

There are usually no ongoing costs beyond the insurance deductible.

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This is not covered:

• Repair of defects: If you have damp in the bathroom, rot in the ceiling or electrical faults, you will not be covered for the repair. The insurance only covers costs associated with pursuing the claim.
• Loss if the seller cannot pay: Even if you win the claim and are successful, the insurance will not cover the loss if the seller is unable to pay. Therefore, it is an advantage for you if the seller has home seller insurance - it gives you security for a possible claim.

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When do you need homebuyer insurance?

Homebuyer's insurance may be particularly relevant if you are buying a home with uncertain or high risk of hidden defects. This often applies to older homes, homes with inadequate documentation, or if you feel that the condition report does not provide sufficient reassurance.

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The insurance gives you extra security if something goes wrong, and reduces the risk of high legal fees in the event of a dispute. As the insurance also covers reports and awarded legal costs, we recommend that everyone purchase homebuyer insurance - even if you have legal expertise yourself.

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Check if you are already covered

Many homeowners insurance policies include legal aid coverage , which provides legal assistance in disputes after purchasing a home. This coverage often has lower limits and higher deductibles than homebuyer insurance, but may be sufficient in some cases.

Before you purchase homebuyer insurance, you should therefore:

• Review your existing insurance policies
• Compare terms, deductibles and maximum coverage
• Assess whether the insurance coverage you already have is good enough

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The seller has home seller insurance - what does this mean for you?

Home seller insurance is an insurance policy that a seller can take out to cover their liability for hidden defects and deficiencies in the home. If a defect is discovered that was present before the takeover, but that no one knew about, you as the buyer can file a claim, and then the insurance company steps in instead of the seller.

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For you as a buyer, this means a greater likelihood that you will actually receive compensation and that the case will be handled more quickly and professionally. Therefore, you should always check in the sales document whether the seller has taken out home seller insurance. This gives you as a buyer a stronger starting point in the event of hidden defects.

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Have you found yourself in a dispute after purchasing a home? Our property lawyers can help you assess the case and protect your rights.

Contact us here for a free, no-obligation conversation.

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When you buy a home, you as the buyer have a duty to investigate. This means that you are responsible for familiarizing yourself with the condition of the home – both before you enter into an agreement and after you have taken possession of the property. If you fail to follow up on this responsibility, you could, in the worst case, lose the opportunity to complain about errors and defects later.

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In this article, we explain what the duty to investigate entails, what laws apply, and how you as a home buyer can best protect yourself against unpleasant surprises.

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Duty to investigate before purchase

As a home buyer, you are legally required to familiarize yourself with the information available before placing a bid. This is regulated in the Norwegian Sale of Property Act, Section 3-10, and means that you cannot later complain about matters that you should have discovered in advance.

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Once your bid is accepted, the contract is considered concluded. From this point on, you basically cannot make a claim for an error that you should have known about.

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What does this mean for you in practice?

• Read all documents thoroughly : Condition report, self-declaration and sales document often give clear signals about possible weaknesses in the home. You are considered familiar with all content - even what is not explained in detail. Even if there are many pages in the sales document, you are considered as if you have read all of them - there is no excuse for not having enough time before the bidding round.
• Investigate if asked : Has the broker or seller encouraged you to check something more closely? Then you must do so. If not, you may lose the right to appeal. This does not apply without exception, and in some cases you may still have a claim.
• Understand the content : If the seller has had a home sales report prepared, it should be written in language that is understandable to the average home buyer. However, you must make sure you understand what is in the sales documents, otherwise you are potentially taking a risk by bidding on the property.

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Duty to investigate after purchase

The duty to inspect does not stop at the time of taking over. According to the Norwegian Disposal Act, Section 4-9 , you as the buyer must inspect the property as soon as you have taken over it. This is important to find any defects and deficiencies that may give rise to a complaint.

The complaint period starts from the time you discover, or should have discovered, the defect. If you wait too long to investigate, you risk losing your right to complain, if you should have discovered the defect during such an investigation.

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What should you do:

• Go through the home thoroughly : Check the bathroom, kitchen, basement and other areas where damage can often occur.
• Document what you see : Take photos and notes if you notice anything that seems abnormal.
• Report quickly : The longer you wait to report, the greater the chance that you will lose the opportunity to make a claim against the seller.

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Summary: How to avoid costly mistakes

Understanding and following the inspection requirement is crucial for you as a home buyer. Failure to thoroughly inspect the home before and after purchase can have serious consequences.

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Have you found yourself in a dispute after purchasing a home? Our property lawyers can help you assess the case and protect your rights. Contact us here for a free, no-obligation consultation.

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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?

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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.

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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.

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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.

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How are you progressing?

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

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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 .

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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 .

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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.

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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 .

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