Advokat Boligkjøp

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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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.

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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.

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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.

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

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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.

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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.

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

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