Defect in the co-op apartment – what can I do?

Latent defects in a property - keep this in mind

• A buyer should always inspect the apartment if asked to do so.

• If you discover a latent defect, you can make a claim against the seller. You can make a claim about a latent defect for up to two years from the date you took ownership of the real property.

• You can insist that the seller rectifies the defect or alternatively reduces the sales price for the property retrospectively. If the defect is substantial, you may also have the right to rescind the purchase.

What can you complain about ?

Inspect the apartment

Duty to investigate when buying a condominium is not enshrined in law. But always inspect the apartment if you are asked to do so by the seller or broker. If you do not examin it when asked to, you cannot get compensation from the seller for errors you should have discovered.

Latent defects

As a buyer of a condominion you can make a claim against the seller if you find what are referred to as a latent defect. The defect must have been present in the property at the time of purchase, but could not be detected via a thorough inspection. To be able to assert a claim, the defect must also not be anticipated. This means that you should not be able to expect the defect in relation to the propertys:

• age

• condition

• construction.

Examples of latent defects

In condominions, the most common issues often occur in wet areas, such as the bathroom. Moisture, mold and rot are common causes. Other examples may include incorrectly installed spotlights that can lead to burnt wiring, insulation issues or pest infestations.

Sold in existing condition

If the condominion was sold with the proviso “as is,” then in addition to the defect being deemed to be hidden, one of the following three preconditions must also be met:

• The apartment does not correspond to the information provided by the seller before the purchase.

• the seller has failed to inform the buyer of a material fact of which the seller is presumed to have been aware of and of which the buyer would have expected to be informed of.

• The condition of the co-op apartment is substantially worse than the buyer had reason to expect, taking the price and other circumstances into account.

How much time do I have to lodge a complaint?

Contact the seller as soon as you become aware of a defect. You can lodge a complaint about a latent defect for two years from the date ownership of the property was transferred to you, but you must lodge a complaint within a reasonable period of time from the date you first became aware of the defect. It is best to lodge your complaint in writing, for example by e-mail or registered post. Then you will have documentation that you lodged the complaint and when.

What can I demand from the seller in the event of a latent defect?

You can insist that the seller rectifies the defect or reduces the sales price for the property retrospectively. If the defect is substantial, you may have the right to rescind the sale, i.e. the ownership of the property will be returned to the seller and you will have your money returned to you. Rescission is less common.

Disclaimer of liability for latent defects

A seller can disclaim liability for latent defects by including a disclaimer (non-liability clause) in the purchase and sale agreement. This means that you, as the buyer, will not be entitled to receive compensation for a latent defect that is detected at a later date. A disclaimer of liability for latent defects often results in that the purchase price is lower.

Obtain the advice of a real estate lawyer

Disputes about defects or deficiencies in residential property are often complicated. You should contact a real estate lawyer for advice, especially if it will be costly to rectify the problem.

Settling the dispute in court

If you and the seller have a dispute that you cannot resolve, a court, primarily the district court, can hear the dispute.

In such a situation, it may be worthwhile to contact a lawyer who can advise you to determine your rights and what you can make a formal claim or demand for. You should check to see if you have any legal expenses coverage via an insurance policy. Sometimes legal assistance insurance can cover certain costs such as legal fees for representation.

Further information about settling a dispute in court

If you have an issue with the building’s co-op association

If you cannot reach a mutually agreed solution with the condominion association about membership or liability in the event of water damage, as examples, you may have the possibility to have the matter examined and settled. The regional Rent and Tenancies Tribunal (Hyresnämnden) may be able to mediate between you and the co-op association.

The regional Rent and Tenancies Tribunal's website (in Swedish)

If the issue is not resolved you may want to consider seeking advice from a lawyer to help clarify the issues and circumstances in your case and your options if you proceed further. Before engaging a lawyer, you should check the legal assistance cover you might have in your home insurance.

If the dispute persists you have the option of filing a lawsuit at the local district court.

Further information about settling a dispute in court

You can also contact Bostadsrättsnämnden to have the dispute heard. The decisions of the Bostadsrättsnämnden are not binding on the parties.

Bostadsrättsnämnden