Most legal problems in home buying only arise after the parties involved believe everything has been settled. This overview helps you identify where the risks lie and what your rights are during each phase of the purchase process.
Lawyer AdvoPro
Buyers who have purchased or are planning to purchase a home
Sellers involved in a dispute with a buyer
Individuals wondering if their issue is legally relevant
For most people, a conflict surrounding a home purchase is stressful enough, especially if you are not originally from the Netherlands. Problems also often arise only after everything seems finalized: after signing, during financing, at the transfer of title, or even months after receiving the keys.
While Dutch law regarding home purchases is clearly regulated, it can be difficult in practice to know which rights you have and which steps are necessary. This page provides a comprehensive overview of the most common legal issues in home buying, including risks and potential solutions for each topic.
The period around the signing of a purchase agreement often feels final, but legally that is not always the case. Precisely in the first days after closing the purchase, buyers quite often get doubts about their decision. However, many people do not know that the buyer is not directly irrevocably bound after setting his signature. As a private buyer, you have the right to three days of statutory reflection period. In this period, you can still waive the purchase without giving a reason and without being liable for a compensation.
How you count this term works as follows:
Dissolving within the reflection period is form-free, but must reach the seller (or their agent) on time. Sending a message on the last day at 23:59 is therefore risky if it is read or delivered later. Therefore, email combined with, for example, WhatsApp or a registered letter is usually chosen, so that it is established that the declaration has arrived.
Please note: This statutory reflection period only applies to the buyer, not to the seller. Moreover, there is only a legally valid purchase agreement if both parties have signed the contract; a verbal agreement or a confirmation by email is not binding in a private purchase.
As soon as the three days are over, the purchase is a fact and you are in principle bound to the contract. You can then only get out of the agreement penalty-free if there are resolutive conditions in the contract that you can successfully appeal to. We discuss the most common examples below.
In practice, the financing contingency or “subject to financing” is the biggest dealbreaker in a home purchase. For buyers, it is the safety valve: if you do not manage to get the mortgage finalized in time, you can still withdraw from the purchase free of charge. The conditions to be able to invoke this are, of course, strict. After all, the seller also wants certainty.
First of all, you really have to make an effort. A buyer cannot simply rely on “the bank said no.” You must demonstrably do everything that is reasonably necessary to obtain the financing. If you do not do that, the contingency does not apply.
It usually goes wrong if you:
In such situations, the seller often states that no serious financing attempt was made and then it becomes a legal game of chess.
Invoking the financing contingency must be well-substantiated. Most purchase contracts state exactly how many rejections from lenders are needed. Only reporting that it “is not working” or forwarding an email from an advisor is usually insufficient. If you provided the wrong or too few documents and the rejection therefore occurs due to your own actions, the seller may possibly refuse the dissolution. From that moment on, you are still tied to the purchase.
The term for the financing contingency is also fatal, usually six to eight weeks after signing. One day too late is simply too late. If the mortgage is not finalized after that, the seller can generally demand the contractual penalty of 10% of the purchase price (see below).
In a tight housing market, buyers increasingly leave out the financing contingency to appear more attractive to the seller. Legally, that is a huge risk: if the bank later refuses the loan anyway, there is no longer a safety net. The bank calculates what it wants to lend based on the appraisal value. The higher you bid above the asking price, the greater the risk becomes that your appraisal value turns out lower than your bid and the more difficult the loan becomes.
The reservation of a structural inspection is one of the most important escape routes that you as a buyer can include in the purchase contract if you buy an existing or older home.
The idea is simple: if an independent inspection shows that the home is technically worse than expected, you can still get out of the purchase without costs.
In the purchase agreement, it is agreed from which amount of expected repair costs you may dissolve. That is the cost ceiling for immediately necessary repair. In practice, we often see that limit lie somewhere between €5,000 and €10,000.
Discussions usually do not arise about whether there are defects, but about what they mean. Does something fall under “immediately necessary repair” or is it normal maintenance? Think of:
If you want to appeal to this contingency, you must stick to a few strict rules:
If one of these steps is missing, the contingency often does not work and you are simply too late.
Should I leave out the reservation of structural inspection to be able to make a more attractive bid.
In a tight market, buyers increasingly leave out this contingency to make their bid stronger. That sounds strategic, but legally you then take over almost all risks from the seller. After the reflection period you are stuck – also to defects that you did not yet know.
A commonly used intermediate solution is therefore a quick structural inspection within the three days statutory reflection period. If something serious comes out of that, you can still get out of the purchase without reason and without costs. That prevents the biggest problems afterwards. Better to be very sure then that everything is finalized on time.
An inspection is not only handy for your own certainty. Legally it helps you to fulfill your duty of investigation. If you do not have an inspection carried out – certainly with older homes – you run much more risk after the transfer that defects remain for your account. The reasoning is then: you could have discovered it and you consciously took the risk by not carrying out this investigation.
Our advice: always do an investigation. An investigation is almost always worth the effort. In the worst case, you had to put some money into this but you do have a sense of certainty. In the best case, you have avoided a nightmare or you stand stronger in a procedure if you can show that you have carried out all necessary investigation. Always do it then!
Besides the financing contingency and the structural inspection, you can include more resolutive conditions in the purchase contract. Those are extra safety valves for situations in which not you, but an external factor determines whether the purchase is feasible. Without such a contingency, you could still be stuck with a home that you cannot use practically or legally as intended.
The most common forms are:
Terms and evidence are decisive with contingencies. Just as with financing, hard deadlines apply. If you do not let anything be heard before the agreed date, the contingency usually expires automatically. Dissolving must happen actively and in writing with evidence, for example, a rejection.
When one of the parties does not stick to the purchase contract, it quickly escalates legally. That often happens with a (financing) contingency invoked too late, the failure to deposit the security deposit, or not appearing at the notary. From that moment on, a legal conflict arises about the delivery of the home.
Step 1: Send a notice of default
The other party cannot immediately claim a penalty as soon as a deadline is missed. The party that is in error (whether that is the buyer or the seller) must first officially become “in default”. You do that with a notice of default. This notice of default must meet a number of requirements. You must:
Only after that term can you really appeal to these legal consequences.
Step 2: choose your preferred solution
Subsequently, you have, shortly put, two possibilities:
Dissolution and the 10% penalty
Enforce performance with daily penalty
If you no longer want to proceed with the purchase after that last term, you can dissolve. In most purchase contracts, that automatically means a penalty of 10% of the purchase price for the party that did not fulfill. With current home prices, this immediately involves large amounts. That penalty counts as compensation for damages. If the actual damage is higher - for example, because the home is sold later for less — more can sometimes be claimed.
Sometimes you specifically want the purchase to go through. Then you can demand performance and for every day that this does not take place, a daily penalty of 3 per mille (0.3%) of the purchase price per day. This then continues until delivery or until 10% of the purchase price is reached. This means is often used to put pressure on delivery and if you think it will be difficult to find another buyer. If you do find another buyer quickly, the contractual penalty might be better.
A judge can only reduce or mitigate a penalty if application turns out really excessive. That rarely happens. Usually, it is only checked whether the penalty is totally out of proportion to the actual damage, and even then a substantial amount often remains standing.
Our advice: Hire a lawyer for this.
If you are in a situation where another party demonstrably fails to meet their obligations, we strongly recommend hiring a lawyer. Of course, you can also send a notice of default yourself, but experience shows that such letters are often not taken seriously.
AdvoPro assists both buyers and sellers in claiming and contesting penalties, damages and other liabilities. In these types of cases, we act quickly to prevent further losses or to increase the pressure where necessary.
You can schedule an appointment directly with a lawyer from AdvoPro to discuss your case and possible options without obligation.
When purchasing a home, you do not only buy the house, but also the land around it and a place in an existing living environment. Precisely there lie risks that you do not see immediately. Think of a wrong boundary, an illegal extension, or structural nuisance from neighbors. Those kinds of matters can significantly limit living enjoyment — and regularly it ends in a legal conflict.
Boundaries and rights of neighbors
The factual situation in the garden does not always match the Land Registry (Kadaster). A fence can be placed just wrongly, an extension can lie partly on the parcel of the neighbors or vice versa. Additionally, there can be rights resting on your parcel without you noticing immediately, such as:
Those rights simply continue to exist after the purchase, even if they were not in the brochure.
Permits and renovations
If you see a dormer, conservatory, or extension, you usually assume that this matches the rules. In practice, it regularly turns out that no permit was granted or that building was done outside the allowed dimensions. The consequences of this can be large:
Nuisance and neighbor law
Neighbors can also sometimes be problematic. Many conflicts arise only after someone lives there. Think of:
A difficult neighbor is normally not a legal defect. But serious, structural nuisance or a long-running dispute that the seller knew and concealed, can become that. You as a buyer must also pay attention yourself, of course. Therefore, check before signing:
If you ignore clear signals, the risk often lies with you. Especially with land, boundaries, and neighbors, it applies: what you investigate beforehand usually prevents procedures afterwards. If you have a buying agent, give the explicit instruction to pay attention to this. If they do not do this (well), you can still hold your own agent liable if it goes wrong later. The agent has then, after all, perhaps breached his duty of care towards you as a client.
If you discover problems after the handover of keys that you did not have to expect, it usually legally concerns hidden defects (non-conformity). The home then does not meet what you as a buyer could reasonably assume: a house must be normally habitable, be able to be used safely, and not immediately require large repair costs.
There are a number of main “issues” that we often see coming back:
What you must do immediately as a buyer: If you wait too long, you can get into trouble. You have, after all, a duty to complain and must inform the other party about the situation as soon as possible. That does not have to be complete yet. You may, for example, indicate that you will still seek professional advice for this. The faster you act, the stronger your position. In these kinds of matters, timing often determines just as much as the defect itself. If you want to know more about what you should do in these circumstances, then certainly view our step-by-step plan to recover damages for hidden defects.
Our advice: Hire a lawyer for this as well.
If the damage appears to become substantial, it is wise to involve a lawyer as early as possible. The earlier you act, the stronger your position usually is. If you have legal expenses insurance, you should notify them immediately to avoid coverage issues later on.
AdvoPro assists both buyers and sellers in disputes concerning hidden defects. We assess your legal position, determine the right strategy and act decisively where needed.
You can schedule an appointment directly with a lawyer from AdvoPro to discuss your case and possible options without obligation.
If you buy an apartment, you legally do not buy a “home”, but an apartment right. You are the owner of your own home and co-owner of the whole building. Because of that, you automatically become a member of the Association of Owners (VvE). That membership belongs to the apartment — you therefore cannot get out of it as long as you are the owner. A well-functioning VvE arranges maintenance and insurance of the building. But precisely there, many problems arise in practice that can significantly disrupt a purchase or sale.
The biggest risk: the dormant VvE
A dormant VvE is an association that factually does nothing: no meetings, no board, and no reservations for maintenance. That sounds innocent, but has serious consequences:
For buyers, this means: the home can become unsellable or unfinanceable.
Rules within the apartment complex
As an owner, you are bound by the division deed and the regulations. In there it states what is and is not allowed in the apartment. Conflicts arise, for example, when a previous owner without permission:
The VvE can then demand restoration — and that obligation ends up with the new owner.
The joint risk of the VvE
Because all owners together own the building, they also share the liability. If damage arises due to poor maintenance (for example, a loose roof tile), every owner can be addressed. Also, mismanagement within the VvE can have financial consequences for all members.
What you must check before the purchase of an apartment: With an apartment, it is therefore essential to view the VvE documents before you sign. Pay attention especially to:
When buying a home, you rely on what the seller and agent tell you. Think of information on Funda, the sales brochure, or during the viewing. In basis, you may assume that those data are correct. Yet, it regularly turns out afterwards that the reality is different – and that often leads to substantial damage and legal discussions.
What if the indicated surface area is smaller than promised? A classic conflict is about the number of square meters. Agents must measure homes according to fixed rules (NEN 2580). If they do not do that and the home turns out smaller, that can be unlawful. Important therein:
A few square meters difference seems small, but can at current home prices matter tens of thousands of euros.
What the seller or his agent must tell on their own initiative The seller additionally has a duty of disclosure: he must give relevant information that has an influence on normal use or value of the home. That often goes wrong with:
Duty of investigation vs. duty of disclosure As already explained under the section of the hidden defects: as a buyer you must pay attention and ask questions. But in case law, the information obligation of the seller usually weighs more heavily. If the seller knew something important and did not say it, he can rarely appeal to your lack of investigation.
What can you do legally with concealed/incorrect information in the purchase of a home? If it turns out that you bought on the basis of wrong information, then there are multiple routes:
Important: report the problem as soon as possible after you discover it (often within about two months). If you wait too long, you usually lose your rights.
Our advice: Again.. Hire a lawyer for this.
In many cases, this concerns a breach of a professional duty of care or a seller who has deliberately concealed relevant information. Apart from proving that information was withheld or presented incorrectly, it is often challenging to properly substantiate the extent of the damage.
A lawyer from AdvoPro can assist you in assessing your legal position and taking the right steps in cases involving professional negligence or concealed and misleading information.
You can schedule an appointment directly with a lawyer from AdvoPro to discuss your case and possible options without obligation.
Most issues fall within the above categories, but sometimes just a deviant situation plays out that does not fit exactly under there.
If you doubt whether your problem falls under this, then it is wise to just contact us via the contact form.
