Dream home near an airport, Part one: buyers beware
Looking for a new home in the Netherlands in a quiet neighbourhood? Beware of things that might disturb the peace and quiet in the vicinity.
If you think that telling the seller you are looking for calm is enough your dream home may turn into a nightmare.
Buyers looking for a house in the south of the Netherlands during the covid pandemic experience this first hand. They live in the centre of Eindhoven. There is no air traffic due to the airport in the vicinity there. They find a home nearby. Air traffic is barely noticeable at the time.
The buying agreement is signed. The buyers visit the property again and find out they would be facing noise nuisances due to air traffic after things get back to the pre covid state.
They claim cancellation of the buying agreement due to error. The judge rejects this claim. The result: a contractual fine for the buyers of almost a hundred thousand Euros.
The buyers live in the centre of Eindhoven. They are looking for a property in the same region and find one. The sale occurs about two weeks after the first viewing. The conditions are standard.
In the weeks after signing the buying agreement the buyers visit the property again. The real estate agent of the seller and the buyers have a telephone conversation, in which the buyers say:
“Indeed so it would be really helpful if we had this information before deciding to buy the house, because we also come from the center of Eindhoven. There are no flights there. So we did not have this information that sharp and we basically trusted the information we got from you. And when we were there in the house and we visited the house, it was two times we visited with you, one other time in the afternoon. In the evening we went to assess the area. We talked with neighbors. We visited another house – we told you, no? – to get more information. Still we did not hear a single plane passing by. And knowing that at the moment and at the time we were visiting the house, the traffic from the Eindhoven airport was much much much less than a normal time that what will be in a month or two months from now. In a few months from now, it will go back to normal. I think we deserved to know that information because it is considered as environmental noise and when we asked if it’s quiet or not, I think this conversation should have happened then, not now.”
The same day the real estate agent of the seller sends the following message to the buyers on WhatsApp :
“Good afternoon, I talked to the seller and you are welcome to visit the house and the garden next Wednesday and experience it for yourselves. If you have doubts I advise you to still buy the property and see if it suits you. If needed you could resell it and avoid the 10% fine.”
The buyers visit the property again. Shortly afterwards the buyers inform the real estate agent of the seller that they do not wish to buy the property. They cancel the buying agreement due to error. Their lawyer writes the following to the real estate agent of the seller:
“Indeed, the buying agreement was signed under the influence of error and if the information had been presented in a fair way the buying agreement would never have been entered into. Either you as a selling agent or the seller should have informed my clients adequately about the exposure to noise in the vicinity, as this was a crucial factor for my clients.”
But the seller puts the buyers in default for not paying the guarantee of 10% of the purchase price. Eight days after the notice of default the buyers still do not pay the guarantee. After that, the seller cancels the buying agreement and asks the buyers to pay the 10% contractual fine – almost hundred thousand Euros. They do not pay it.
The court proceedings
A brief summary:
- The seller claims payment by the buyers of the contractual fine of almost a hundred thousand Euros.
- The buyers claim a statement that the buying agreement was rightly cancelled in virtue of error and claim damages from the seller.
- The buyers claim damages from the selling agent due to wrongful behaviour.
First, the court considers the appeal on error.
Should the seller have informed the buyers about the air traffic near the property and the noise that goes along with it?
To answer this question one has to take into account the so-called duty of notification.
Did the seller know or should the seller have known that this was a crucial factor for the buyers?
No, deems the court. If this factor is considered so crucial by the buyer it can be expected from him to let the seller know this explicitly. Therefore, the fact that the buyers asked the real estate agent in general terms if the property had quiet surroundings does not suffice.
Moreover, the court considers the fact that the viewing occurred during the covid pandemic when air traffic was barely noticeable does not make any difference. Also, the court considers the fact that the buyers did not call upon a real estate agent for the purchase to be their own risk.
The appeal to error fails. The buying agreement is not null and void in virtue of error.
The selling agent did not behave wrongly and is therefore not liable for paying damages.
The dissolution of the buying agreement was valid.
The buyers have to pay the fine of almost a hundred thousand Euros.
How could this result have been prevented?
If the aerial noise nuisances had been discussed before the buying agreement was signed the case would have had a different outcome.
Do you think national legislation in the European Union is uniform in this respect? The answer is no. The buying process is different depending on the member-state, which complicates matters, especially for internationals. In France a seller must inform a buyer about air traffic in the vicinity and the noise this entails. Given this obligation this case would never have had the same outcome in France. I will get back to this issue next time.
Advice: use the withdrawal period
My advice to consumers-buyers of real estate is to take the legal withdrawal period of three days after signing the buying agreement into account which is applicable in the Netherlands. Within this time frame a consumer-buyer can cancel the purchase without having to provide any reason. In that case a contractual fine of 10% is out of the question.
Please feel free to contact me for more information on this topic.
(Image: Unsplash, documerica*, merely for illustration purposes)
(*Running from 1972-75, the DOCUMERICA project’s remit was to “photographically document subjects of environmental concern” in the USA.)