Nonconformity? AMS lists the criteria!
When buying property, the buyer can assume that the property has the features required for normal use. This conformity requirement is a legal regulation, but still often leads to discussion. Because what does “normal use” mean? Dutch construction lawyer Marco Guit explains the principle of nonconformity based on a recent ruling.
Purchase contract for commercial premises with a hall
This case concerned the following. A municipality purchased commercial premises with, among others, a hall, from a horticultural business. This hall collapsed after the property had been transferred. Investigation showed that the hall had a construction error. The municipality held the seller liable based on nonconformity.
Step 1: what is the agreed use?
The first discussion focused on the type of use to which the purchase contract applied. In this case initially there were municipal plans to demolish the buildings for redevelopment. However, according to the court, the municipality proved that the possibility to retain the buildings on the premises (including the hall which the litigation concerns) and use these as such, was discussed with the seller. This was eventually the starting point in concluding the purchase contract. This means that the purchase contract also applied to a (normal) use of the hall and not just the demolition of the hall.
Step 2: is there nonconformity?
The next question was whether the construction error meant that the collapsed hall did not have the properties required for normal use when it was transferred. The conformity regulation entails that the buyer of a building can assume, in principle, that the construction was executed taking into account the (building) stipulations in effect at that time. However, the roof did not comply with the requirements in effect at the time that the hall was built in 1997. This means that there was in fact nonconformity.
Step 3: cause-and-effect between error and collapse of the hall?
The seller stated that there was another reason for the collapse than the construction error in the roof. This was allegedly caused by insufficient maintenance to the roof by the municipality. However, the court found that the existence of a possible second cause does not in principle mitigate the cause-and-effect between the collapse and the construction error.
Step 4: allocation of damage / own fault?
The court did, however, take the overdue maintenance into account in allocating the damage, because this contributed considerably to the damage. The municipality had partially dismantled the hall and removed essential facilities, exposing the hall to all weather circumstances. Based on their own fault, the municipality remains responsible for 60% of the damage.
Step 5: extent of the damage?
The municipality primarily claimed the rebuilding costs of the hall as damage. The court dismissed this claim, because the municipality did not buy a (virtually) new hall from the seller – and is therefore not entitled to a new hall. Assuming the depreciation of the premises (as there are now no usable buildings) the court awarded an amount of damages of EUR 237,375. Because the municipality remains responsible for 60% of damage, the seller was sentenced to pay EUR 94,950.