New real estate legislation in Norway meets criticism

Egersund boliger

writer icon Tormod Birch     ISB   |   City     🕐 08. Mar. 2019

A new legislative proposal to the Alienation Act (Avhendingsloven) regarding house sales, has been proposed in Norway. This new legislation will make it possible for home buyers to claim compensation for minor defects that are discovered after a house sale has gone through.

Legislative proposal
The proposal states that the buyer is allowed to make a complaint about minor defects in the house, and can demand that they be corrected at the seller's expense. It applies when there are defects which the seller has not sufficiently informed the buyer of, if they cost NOK 10 000 or more to fix. The buyer then lodges a complaint to have the seller pay for it.

Existing legislation that deal with similar concerns, state that there must be a significant problem with the house that amounts to 5 percent of house value, before it is considered a 'defect'. If a house sells for 5 million NOK, this means that any issue up for complaint must be valued at NOK 250 000 or more, in order for the buyer to receive compensation from the seller.

Not happy about the proposal
The proposed change has already met with a lot of criticism. Christian Dreyer, CEO of Real Estate Norway, argues that “the result will be the opposite of what the government wants to achieve, and it will create a less stable real estate transaction with more conflicts between seller and buyer.”

Yet, the objective of the proposal is to have fewer disputes after final transfer of ownership of a property. The Norwegian Minister of Justice, Tor Mikkel Wara, disagrees with the criticism and believes in the new legislation proposal.

"The goal is exactly that, a simpler regulation that provides a better basis of information and greater predictability of the housing market, with fewer disagreements and greater security for both sellers and buyers," says Wara.

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