Two purchasers of a holiday property claimed a price reduction and damages after the municipality decided, following completion of the sale, to construct a public footpath across the property. The sellers rejected the claims and ultimately prevailed before the Supreme Court.
The Supreme Court began by referring to the general principle that the purchaser assumes the risk associated with the property at the time of completion. At the date of completion, neither a formal consultation process nor a final decision regarding the proposed footpath had taken place. The purchasers therefore had to bear the risk of a possible future decision to establish a footpath across the property. The fact that the footpath had been contemplated in an adopted zoning plan did not alter this conclusion. Accordingly, the property was not in a materially worse condition than the purchasers had reason to expect.
The Court further held that the sellers had fulfilled their duty of disclosure. At the time of the sale, the municipality’s planning process was still at an early stage, and it was not possible for the sellers to provide more information about the potential footpath than was already contained in the sales prospectus. Nor had any inaccurate information been provided.
The judgment provides guidance on the assessment of defects where a public-law decision adversely affects a property after it has been sold.
The judgment also clarifies the scope of a seller’s duty of disclosure in real property transactions.
Source: Supreme Court
Bjørnar Oust
boust@melo.no
+47 480 42 931
