Homebuyer Insurance, Housing Market | Hanna faced the great fear of all home buyers

In February 2019, Hanna Hermstad McCrae and her husband Richard Hermstad McCrae bought an apartment in a townhouse in Trondheim’s lower Byåsen. They had borrowed up to the ceiling to win the bidding round and moved in May of the same year.

The house was bought “as is” for 4.6 million kronor, according to the seller and appraiser, with no damage requiring repair. But shortly after moving in May 2019, the unpleasant surprise came:

– We had just moved in and we continue to unpack our bags. When I moved around the drawers in a closet, I discovered moisture on the back of the closet, says Hanna Hermstad McCrae.

Also read: Warns against class division in Oslo: – Most people must live outside the city, in Ski and Drammen

Hermstad McCrae immediately contacted the homebuyer insurance company and was told to take pictures.

The seller especially mentioned the closet as newly bought and newly installed, says the buyer. But when they moved the closet, the new owners discovered that the moisture damage was more extensive than they thought.

– We saw that there was much more, and we thought they must have seen it. It was porous on the wall. An appraiser came and measured, and found there was moisture everywhere.

The damage could have been terribly expensive for the new couple. Homebuyer’s insurance covers legal costs, but not the damages themselves, when such a case ends up in the court system. In the vast majority of cases, the buyer ends up with the invoice, as long as it cannot be proven that the seller knew of the error. These unexpected costs are therefore a great nightmare for all home buyers.

– No moisture damage

Neither the sales statement nor the roof report indicated that the home had moisture damage that required repair.

– In the evaluation it was said that it was a capillary pull-up, which could give some moisture to the wall. But in the same section it was stated that this was to a small extent and that there was no need for immediate action, says Hanna Hermstad McCrae.

The couple had bought up to their maximum limit.

– If we had known, it would not have worked, because then we would have had to calculate that we could manage the drainage costs immediately, he says.

Since the parties disagreed on when the moisture had formed, the case ended in court.

Also read: Here you have to go out with a million for a garage space

While the seller’s attorney claimed that the moisture damage had occurred in the post-purchase period, the buyer’s attorney thought this unlikely and referred to technical investigations that showed moisture on the wall as a result of the drainage needs.

It was word for word, and the case ended up in court. The vendor, Knut Erik Fenstad, insisted that the moisture damage was completely recent, and for Nettavisen he insists on this, even after the case is finalized in the court system and decided in his favor:

– The case was uncomfortable for me. There was no moisture damage when we delivered the key, says Fenstad.

The expert had been there before

While in the court system, buyers collected offers for the work they had to do.

– I put the job on My Tender and General Manager Henning Becker contacted the EPS moisture protection company.

Then the insurance company made a damage report. Then it turned out that the same company had been in contact with the seller only six months before.

– I’ve been here before, he said. She confirmed it had been there and measured the humidity, says Hanna Hermstad McCrae.

Becker had recommended inserting a pipe cap to find out if the moisture on the interior wall was due to a pipe leak. This measure had been carried out by the seller. But the seller had not taken the main action recommended by Becker, according to Hermstad McCrae.

Also read: Bought his dream house for eight million – found fault in 4.5 million.

According to Hermstad McCrae’s attorney, moisture expert Becker became a decisive witness at the trial. After an inspection with the moisture expert, it was determined that the damage behind the cabinet was related to a large amount of moisture on the back wall.

The court concluded that it was overwhelmingly likely that the moisture damage had developed long before the new owner took office and that a new drain was needed to repair the damage.

A quarter of a million

The damage was assessed at about NOK 282,628. At the Sør-Trøndelag District Court, the buyer was awarded compensation of NOK 250,000 to repair the damage, while the seller was also ordered to cover all legal expenses, a total of NOK 450,000. The verdict fell in June 2020.

Seller Knut Erik Fenstad tells Nettavisen that his attorney advised to appeal the case, but that the insurance company in that case required the seller to cover half of the costs. Therefore, Fenstad has refrained from appealing.

Both the seller and the buyer describe the process as unpleasant and point out that the information available from the broker and the appraiser in a bidding round is not good enough.

Can hide major shortcomings

The house in question is located in an attractive residential area. It was sold overpriced and had three bidders, the buyer says. What you then have time to verify is limited:

– Roofing reports are difficult and can hide important errors and omissions. I took my time in the process and spoke with people I trusted before the purchase. But we were only on tour for half an hour.

She has this advice for other people considering buying a home:

– If you were to buy something large, I would consider hiring a separate appraiser that you trust before you buy and who has done a comprehensive moisture assessment.

Also read: Get 25 million for the luxury of Snarøya. Then the walls started to disintegrate

Seller Knut Erik Fenstad says he feels misled by both the brokerage firm and the insurance company.

– I wanted to review the prospect thoroughly before the sale, and I have learned that a broker cannot be trusted one hundred percent. I only lived in this house for five months, and the broker I bought from said he didn’t know about humidity. So there I was burned.

– Must do a quick follow up

If you discover an injury after buying a home, it’s important to act quickly, notes associate attorney Tonje Hovde Skjelbostad at the Legalis law firm, who represented Hermstad in this case.

– Unexpected things can appear and, as a consumer, it is not always easy to know what to do.

Also read: Bought “rat nest” – gets giant compensation

There is no withdrawal period for the purchase of a home, so after acceptance of an offer, a binding agreement has been signed. The claim rules for errors or defects do not give the right to cancel the purchase, but to compensation that you as the buyer receive for breach of contract.

– Then one must complain “within a reasonable time” after the defect was discovered. As soon as possible, for the sake of simplicity, you can say: if not, you risk losing the claim. A defect very rarely gives the right to withdraw from the purchase, so there must be a significant defect, says Skjelbostad.

The most practical thing is to promote claims for repair, price reduction and / or compensation.

– You can complain to the seller yourself, and many do. But when the seller disagrees, or there is home seller insurance from the seller, as is often the case, then the attorney / insurance meal becomes easy, she says.

According to Skjelbostad, six out of ten homebuyers now purchase homebuyer insurance:

– Then get help filing claims and take the case to the seller if something unexpected comes up. But regardless of whether you have such insurance or not, you should contact an attorney for a non-binding discussion of the case and its possible handling.