Real estate: brochure offers no warranty

When purchasing or leasing residential or commercial real estate the dimensions of the building are an important aspect. Can you rely on the information provided by the seller or real estate agent?

It is common knowledge that photos on real estate sites give an inaccurate impression because of the use of wide-angle lenses. But also the surface area given in the sales brochure is only an indication. Deviations do not create an entitlement to reimbursement, unless the seller has given absolute guarantees. How can you prevent to become a victim of incorrect information by the seller or the real estate agent?

Know what you are buying

“The floor plans are for promotional purposes and give an indication only. No rights can be derived from the floor plans.” (Dutch: “De plattegronden zijn geproduceerd voor promotionele doeleinden en ter indicatie. Aan de plattegronden kunnen geen rechten worden ontleend.”) This can be found in small print under many a floor plan on Dutch real estate sites. However, the unrounded figures in the floor plans often invoke the impression that the floor plan is based on actual measures and is an accurate depiction of reality.

Can the buyer of a home be confident that the house he or she has bought is as large as was indicated in the sales brochure? In case the house turns out to be smaller and the furniture does not fit, is the buyer entitled to reimbursement of part of the purchase amount? Recently, these questions were submitted to the Den Bosch Court of Appeal.

Both questions were answered in the negative by the Court of Appeal.

• The sales brochure is not part of the purchase agreement and therefore the buyer can derive no rights from it.
• As is customary, the purchase agreement expressly provides that “the parties can derive no rights from oversize or undersize, unless the seller has guaranteed the size” (Dutch: “dat partijen geen rechten kunnen ontlenen aan over- of ondermaat, tenzij de verkoper de maat heeft gegarandeerd”). Such guarantees were not stipulated by the buyer and not given by the seller.
• The buyer did not indicate that the accurate dimensions were a crucial factor for his decision to buy the house and had seen the house at least twice before the purchase. Consequently, he had seen the object he was buying.

The buyer was left empty-handed.

Therefore, it is important that buyers (whether or not via a real estate agent) communicate clearly with the seller over the features of the property that are indispensable and essential, such as the surface, the insulation value or the use. Agreements on such features must be included in the purchase agreement.

You cannot just rely on information provided in the sales brochure or on oral information by the seller or real estate agent. If the seller gives inaccurate information on issues that are relevant for you, this may constitute a ground for the purchase agreement to be declared void.

Tips for buyers

• Do not rely on information provided in the sales brochure.
• Stipulate an architectural inspection and measurement by a professional organisation as a condition for the purchase.
• Make clear and enforceable agreements on the characteristics the residential or commercial property must meet and have this established in the purchase agreement. A lawyer can help you to do so.
• Ask a lawyer to evaluate the situation, he or she can advise you on the necessary steps you have to take.

Note

After the publication of this blog in January 2017, several court decisions were made from which it is evident that real estate agents could be liable in case the surface area of a building is specified incorrectly in a sales brochure. This is the case when the real estate agent is a member of a professional association (for instance: NVM, VastgoedPRO or VBO Makelaar) and states explicitly that the building was measured in accordance with the measuring instructions of the respective association. If it turns out that the surface area deviates, the real estate agent might have to compensate potential damages resulting from the deviation. With effect from 1 January 2018, new measuring instructions are in force for the professional associations mentioned. These instructions were established in consultation with inter alia, the Association of Dutch Municipalities.

What can we do for you?

We are happy to help you by drawing up a sound purchase contract, which clearly provides the conditions the purchased property has to meet and what will happen if the agreements are not fulfilled. If the purchased property does not correspond to what was agreed upon, we will help you find an adequate solution, such as rescinding the purchase, or compensation. Please contact: