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The owner’s purchase of an apartment in Oslo was canceled. Significant information was omitted from the package insert.
The house lacked a permit for use as an independent dwelling. The corridor thought it was not problematic and that it is common in Oslo.
In a ruling in the Oslo District Court, the buyer has been confirmed that the entire purchase of the house must be canceled. The court concludes that a price reduction is not relevant, because it is not possible to know how much must be paid to repair the apartment.
– The verdict is exhaustive and the result is as expected. The case has been a heavy burden on my client, who invested $ 3.7 million in what turned out to be a worthless object, says attorney Edvin Berger Rasmussen, the buyer’s legal counsel.
The verdict states that the seller had thought that she lived in a normal legal apartment, until she was about to sell.
The apartment is located on the third floor of a villa from the early 20th century, which over the years has been divided into several residential units, without these units having been approved by the municipality.
Expensive remodel
In 2019, when he was going to sell the apartment, he realized that there was no certificate of completion for the apartment. There was no use permit for the apartment as a separate living unit. It did not match the information he had received when he bought the apartment.
He had filed a lawsuit against the real estate company that sold him the apartment and demanded compensation for the insufficient information.
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He had also hired consultants to help with the apartment approval application. It turned out that major changes to the apartment building were required for the house to be approved. Among other things, an escape route from the apartment was missing.
I wanted to sell apartment with problems
The process with the municipality was long and expensive, so the owner wanted to sell the apartment. In an email to the other Sami people in the building, she wrote:
“We have been working for a while to get the apartment approved as a separate dwelling unit. This triggers completely insane requirements to upgrade to the tek17 standard, so now we are trying to sell it as is with information in the sales statement on the situation ».
Two brokers were contacted: one broker thought the apartment was not for sale because it could not be inhabited. The other thought there was no problem.
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Broker so clearly “no”
First, the seller’s husband contacted Sem & Johnsen Eiendomsmegling. An email indicates that he wanted to sell the apartment and that his lawyer wanted text on the prospectus stating that the housing unit is registered, but that ‘the municipality on file does not yet have a certificate of completion or temporary use permit for this apartment. The plan that the municipality of the house has does not fully correspond to the current plan.
The real estate agent replied: “Unfortunately, your text will not be kept if we take over the task. In that case, a text must be added indicating that the property cannot be inhabited, as the apartment has not been approved. This seems something not very salable, unfortunately ».
The real estate agent also wrote to the seller: “The seller cannot give any kind of guarantee that the house will be approved and possibly what requirements the municipality will establish for it to be approved. The municipality can demand the eviction of the house for having been used illegally.
In court, the broker explained that he naturally wanted the assignment, but had refused after consulting with other members of the company.
“It was noted that the apartment was suitable for first-time buyers, who generally do not have the competence to familiarize themselves with these issues. It is not surprising that the apartment was sold and believes that it was” played “that interested young people they would not understand the consequences, “the Oslo District Court reports from the certificate.
DNB Eiendom took over the assignment
DNB Eiendom, on the other hand, took over the sales assignment. The DNB broker had sold another of the third floor sections the previous year, also without a certificate of completion. The DNB broker did not perceive that this implied any risk for the buyer and considered that it did not affect the value of the apartment.
In court, DNB Eiendom representatives explained that there is often a lack of a certificate of completion for older houses.
The online newspaper wrote in November about such an apartment in Alexander Kielland Square. It was clearly stated in the announcement: “There is uncertainty about how long the application process will take, what the final cost will be, and what the result of the application will be. As a last resort, the municipality can demand that the apartment return to its original state, which means that it is incorporated into the neighboring flat ».
It was not so clear from the DNB Eiendom information. In the status report and sales statement, it was stated that there were no requirements or public orders, but that the apartment lacked a certificate of completion.
After viewing and bidding, the apartment was sold for NOK 3,725,000. Already on the same day, the buyer asked critical questions about the lack of a certificate of completion for the apartment. The runner then replied:
“The whole house lacks certificate of completion, it was built in 1890 and the 3rd floor apartments were set up from 1 to 3 residential units in 1969 and as mentioned in the prospectus, bathroom and kitchen plans were approved. There are no other certificates of completion available. People have lived here since the year of construction, and several of the apartments have been sold many times 🙂 »
The next day, the buyer replied that she had received information that the lack of an escape route was the reason for the lack of a certificate of completion and referred to the fact that there could be a repair order with significant costs. During the acquisition, NOK 350,000 was retained. A few months later, a subpoena was issued.
Oslo District Court: minimum information
In the ruling, the Oslo District Court writes that in the corridor information, a minimum of information about the problematic aspects of the apartment was added.
The Oslo District Court writes, among other things:
- “Based on the information that (the seller) knew, the statement of sale gives the impression that it was more designed to provide a minimum of information than an open and honest presentation of the problematic aspects of the property.”
- “It says there is a certificate of completion for furnishing the kitchen and shower room on the third floor, but not that this applies to an apartment other than the one for sale.”
- “In addition, appropriate formulations have been used to give the impression that there is no drama in the lack of documentation in the municipality files on building permits and changes in the use of the property, such as that ‘there may’ be deviations from the permits construction approved “, and that the seller has applied to the municipality for a” formal “approval of his housing unit.”
- “Otherwise, it is reprehensible that no information was given that an escape route was missing.”
The result of the dispute in the Oslo District Court was that the sale of the house was canceled and the buyer received almost NOK 660,000 in compensation and legal expenses.
Owner responsible for the sins of others
Communications consultant Trude Lucie Nedregård Isaksen in the Oslo Municipality, the Planning and Construction Agency, says that homeowners are responsible for ensuring that homes are legal, even though previous owners have been held accountable for the illegality. In the worst case, you must move out of an illegal home.
She says there are illegal conversions in Oslo, and before 2018 there was no connection between the Landlord Section Law and the Planning and Construction Law. Therefore, the municipality could not reject the division of houses, even if the houses were not homologated according to the Urbanism and Urbanism Law.
– Fortunately, this was changed by the change of law in 2018, so the legislation was coordinated, he says.
The consequence is that homeowners may have homes that are not approved by the Planning and Construction Act and therefore it is illegal to live in them.
– If a home is not approved and people still live in it, it is considered illegal. Then it is the owner’s responsibility to provide an application to the Planning and Construction Agency so that we can evaluate the case, he says.
Homes must be fire retardant, meet requirements for light and noise conditions, and more. If they are not approved, you must move out of the house.
– We emphasize that it is the responsibility of the owners to ensure that the building in which they live is legal, even though the previous owners or promoters may be responsible for the illegality, he says.
– Building control has been significantly strengthened
The seller of the apartment, who thus lost the case completely, was insured through Claims Link. Therefore, Mille Haslund Mellbye, who is the company’s head of claims in the Nordic region, comments on this case. She says the verdict will not be appealed.
– Are apartments without a certificate of completion and without approval as a housing unit a new problem in Oslo?
The lack of a certificate of completion is a challenge if the buyer is not specifically informed of it in the sales documentation. In some cases, we see a temporary use permit being granted so that the property can be used before a certificate of completion has been issued. It is usually a formality to obtain a certificate of completion. In this specific case, it has proven to be more challenging.
– What is the reason why the problem comes to the fore now and not many years ago when the apartments on the third floor of this house were built?
– In previous sales processes, no attention has been paid to the fact that there was no certificate of completion. The apartment was converted into a separate housing unit many years ago and the practice of building control by public authorities has likely tightened significantly since then, she says.
DNB Eiendom: – We have conducted a thorough evaluation
The online newspaper asked DNB Eiendom the following questions about this case.
To the question of whether we have made a mistake, we have the following comment: DNB Eiendom has made a thorough evaluation of the text in the statement of sale before the property was put up for sale, and we believe that we have provided information in accordance with what to expect based on the broker’s knowledge and research. about the home, replies communications consultant Vidar Korsberg Dalsbø at DNB Eiendom.
He says the company won’t say much about the case at this time.
– This is a conflict between buyer and seller, and the verdict is also not final. As a broker, DNB Eiendom has not been a party to the case and therefore it does not seem natural for us to comment at this time, he says.
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