If defects come to light after a property purchase, the seller is usually faced with the question of whether they are liable and the buyer with the question of whether claims can be made due to the defect.

On the one hand, material defects come into consideration here, which means that the actual condition of the property does not correspond to the agreed condition. In this case, the seller has contractually promised something that does not actually exist. On the other hand, there could also be defects of title, for example if encumbrances are not registered in the land register or if rental and lease relationships have not been disclosed.

In the case of defects, the question must always be asked as to whether the liability for defects applies at all and has not been effectively excluded by contract. The exclusion of warranty rights is the rule for existing buildings and is possible within the limits of § 444 BGB. In the case of purchase contracts for new buildings, however, the buyer generally has far-reaching warranty claims. An exclusion is only possible here after the buyer has been informed of the legal consequences of the exclusion and the associated risks.

But what options do you have in the event of a defective property? 

If the conditions for a warranty claim are met, the buyer can invoke various rights:

• Rescission due to fraudulent misrepresentation if the seller deliberately concealed a defect of which he was aware;

• subsequent performance, provided that the existing defect can actually be remedied;

• Withdrawal from the contract if the seller has been unsuccessfully set a deadline to rectify the defect or if such rectification is impossible;

• Purchase price reduction;

• Damages. 

Please note that warranty rights typically expire within 5 years, whereas rights of rescission due to fraudulent misrepresentation expire within 2 years of knowledge of the grounds for rescission.

Have you discovered a defect after buying a property? Contact us and we will examine the facts of the case, your legal position and, if necessary, assist you in enforcing your rights. 

Of course, we also support you in the opposite case, namely if you are exposed to warranty claims from a buyer and want to defend yourself against them. Please contact us.