Practical tips for “house builders” and purchasers of apartments

Everyone has heard about it: the lawsuits and tales of woe of well-known builders. If a problem occurs, it often appears as if, with some house building projects, the “streaks of bad luck” and the problems facing the builder can no longer even be dispelled.

Luckily, the law provides for various provisions that support and protect the purchaser/builder. One of the most important ones is the statutory guarantee. “Guarantee” means that the producer of a work or the seller of an item is liable for the work performed or the object of purchase being free of defects when it is handed over, independently of fault. A property is free of defects if it shows the explicitly assured or usually assumed properties, and can be used as agreed.

It is also important to be aware of the difference between the statutory guarantee and any warranty assumed. Based on the statutory guarantee, essentially the respective contractual partner is always liable in line with the statutory provisions. The scope of the guarantee is legally precisely regulated. The scope of any warranty assumed is subject to the respective contract, and may contain the most diverse exclusions. A contractually assured warranty may, in any event, not limit the statutory guarantee, and therefore exists alongside the latter in parallel.

Practical tips for builders and purchasers

  • When concluding contracts, pay attention, right from the outset, to detailed provisions which unmistakably lay down what services have to be provided, how, by when, at what price and on what terms and conditions (e.g. Austrian standards (ÖNORMEN)). The more precisely the scope of services has been laid down, the less potential for dispute exists.
  • Try to contractually agree a guarantee period that is longer than the statutory one and/or a financial retention (e.g. part of the purchase price is retained until the guarantee period has expired).
  • If you are building yourself and do not have the necessary expertise, consider commissioning a site manager, who will check the building progress on an ongoing basis for adherence to all the standards. The contract with the site manager should also be formulated with legal precision, so that the site manager is also co-liable.
  • The building works should, in any event, be inspected regularly, and documented in photographs as well. It is advantageous to keep a building diary.
  • When the property is handed over, it is necessary to look out for any defects which may exist with painstaking precision. Should you notice any defects, you should complain about them immediately and verifiably, and establish them in a record of defects.
  • In the case of immovables, the guarantee period is three years. However, liability is only accepted for defects which already existed upon the property being handed over. Should a defect come to light within six months of the property being handed over, the statutory presumption that the defect already existed when the property was handed over applies.

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