Buying a house is a very important investment, perhaps the biggest of your life, and hidden defects or faults may appear after the purchase. In this post, we explain what hidden defects are, how to detect them, what precautions you can take before buying, how to make a claim against the seller, or what to do if you are claimed against as a seller.
What are hidden defects?
Hidden defects are faults that are not visible and can seriously affect a property. For example: structural defects, water leaks, unsafe electrical systems, or serious problems with thermal insulation.
For a defect to be considered a hidden defect, it must meet three conditions:
– Be serious, meaning it must significantly affect the property to the extent that it cannot be used or its value is reduced.
– The defect must not be obvious. The buyer must not be able to detect it before the purchase through a normal inspection.
– It must exist prior to the sale, although it may be discovered afterwards.
Can they be detected before the sale?
They are not visible defects, and it is necessary for an expert (architect or technician) to inspect the property to detect this type of problem. Therefore, it is advisable to visit the property before purchasing, carry out all necessary checks, and be accompanied by a technician who can assess the condition of the property.
Hidden defects in new-build and second-hand properties
Hidden defects in second-hand properties are regulated under Articles 1,484 and following of the Civil Code, which establish the following:
– The seller must be held liable for hidden defects in the item sold if they make it unsuitable for use or reduce its value to the extent that the buyer would not have purchased it had they known.
– The buyer can choose between:
º Terminating the contract and recovering the expenses incurred.
º Reducing the price.
º If the seller knew about the defects and did not disclose them, the buyer may seek compensation for damages if they opt for contract rescission.
– The claim period is 6 months from delivery of the item.
In the case of a new-build property, the Building Regulation Act (LOE) applies, which establishes different deadlines depending on the defect:
– For defects in finishes, the deadline is one year.
– For habitability problems, three years.
– For structural problems, the deadline is ten years.
Process for claiming hidden defects
The first thing you should consider is that an expert report is necessary to determine:
– What hidden defects exist.
– What the cause is.
– How they can be repaired.
– The cost of the repair.
Next, a process can be initiated to try to reach an amicable solution with the seller. To do this, you should gather evidence (in addition to the expert report), such as photos, videos, or repair invoices.
The next step is to contact the seller and discuss the situation. In these cases, it is important to seek the advice of a solicitor specialised in claims for hidden defects in properties. If an agreement cannot be reached, it is advisable to send a burofax to the seller, with acknowledgement of receipt and certified content, in which you demand the repair, set a deadline, and indicate that if this is not complied with, you reserve the right to take the appropriate legal action.
If the seller does not do anything, the seller will have to file a claim for latent defects and seek either repair, contract termination, or compensation.
Is it worth making a claim for latent defects in a property?
It is a difficult question to answer because it depends on several factors:
– The seriousness of the defect. As mentioned earlier, it must be a defect that truly affects the habitability of the property.
– The cost of the repair. If it is high (which you will know from the expert report), it may be worth making a claim.
– The evidence available. The expert report is the most important piece of evidence and must be well-prepared for the claim to succeed. Additionally, there should be photographs, videos, and witness statements supporting the claim.
Another element to consider is that legal proceedings are often lengthy and costly, so you should check various expenses before making a decision:
– Solicitors’ fees for managing the proceedings.
– Barrister’s or legal representative’s fees.
– Cost of the expert report.
What should you do if the buyer makes a claim for latent defects?
It may happen that you sell a property you own and the buyer discovers a serious defect in the house, which you were unaware of, and wishes to make a claim for latent defects.
Some important tips you can follow are:
– Read the sale contract or deed you signed to check if there are any limitations to your liability for latent defects in the property.
– Ask the buyer for a technical report certifying the existence and cause of the latent defect.
– Review the report with a trusted technician and solicitor to determine whether it is genuinely a latent defect and meets the legal requirements.
– Gather evidence proving that the defect does not exist, is not serious, or that you were unaware of it.
– Attempt to reach an amicable solution. It is important to avoid a long and costly trial. Speak with the buyer and, if the defect is confirmed, cooperate to identify its origin and quantify the repair.
– If no agreement is possible and you receive a claim, it is essential that an expert solicitor in such cases handles the proceedings and advises you. Remember that an agreement can be reached with the other party at any point.
Why is legal advice necessary in these cases?
Claims for construction defects or latent defects are highly technical and require the assistance of expert solicitors and surveyors experienced in these types of cases.
A solicitor will help you to:
– Analyse the case and assess whether the claim is viable.
– Contact an expert surveyor to assess the damages, causes, and consequences.
– Draft and send a pre-action claim to interrupt the limitation period for the claim.
– Negotiate with the other party, defending your interests and attempting to reach a satisfactory agreement for both parties to avoid a trial.
– Manage the court proceedings: drafting the claim, preparing the evidence, attending the hearing, and lodging appeals if necessary.
Ultimately, these are complex processes where it is crucial to assess whether it is possible to make a claim in the specific case and whether it is worthwhile considering the costs and timescales. Contact our team of advisors if you need assistance with the sale or purchase of your property. They will help you carry out all the necessary inspections to avoid claims for latent or hidden defects.
