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When the apartment is smaller than the contract states

The demand for real estate is getting higher and higher and so are the various situations that can arise when buying a flat. Recently, our solicitors have encountered a case where it was discovered that the flat purchased was 20m2 smaller than stated in the purchase contract. There can be many problems when buying a property, not only in the form of errors in the purchase contract, but also in the form of hidden defects.

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When purchasing a property, the area and condition are expected to match what is stipulated in the contract. However, the reality can be very different, and not only in the case of a smaller apartment.

Smaller property size in reality than in the contract

Although the law does not directly provide a rule for the situation where a smaller apartment would be purchased, we can find such a rule in the case of land. Thus, Section 2129 of the Civil Code states that the buyer is entitled to a reasonable discount on the purchase price if the land does not have the area specified in the purchase contract. So, if the correct acreage is not in the contract and if a different acreage is specified, the buyer is entitled to a discount.

In the case of a flat, it will be no different and it will be the case that the buyer of the flat should get a discount in case of lesser area.

However, whether the seller has assured the buyer of the larger area either in the advertisement or in the contract of sale will still be decisive for the assessment of such a case. It will therefore be better if the wrong size is stated in the contract of sale and this difference against the reality will constitute a defect in the flat.

If everything is proven, the buyer of the apartment will be able to claim a discount on the purchase price or even the possibility of withdrawing from the contract. The discount on the purchase price should correspond to the price of the missing meters.

Real Estate Purchase or Sale

We provide a complete package of legal services related to real estate sales and purchases, including reservation contracts and escrow services. We will also help you with all tax and land registry issues. Our work is fast and accurate, ensuring a worry-free transaction. You’re also welcome to pay after services are provided.

If the seller is found to have known about the smaller acreage, then he would have misled the buyer. For this reason too, a discount or reasonable compensation could be claimed, or the contract could be invalidated if there was a more substantial difference in the size of the flat.

Other common mistakes in the contract of sale

Another common mistake when buying a flat is the incorrect listing of the co-ownership of the common parts of the house, which must be correctly defined. When you buy a flat, you often buy, for example, a cellar, a loggia or part of it, or a parking space in the garage. All of this must be spelled out and clearly defined in the purchase contract.

Another important part of the purchase contract is the purchase price. This must be precisely specified. The contract should not only state the amount, but also the method of payment, the due date and a specification of exactly what you are paying for. The purchase price is also related to the escrow. When buying a property, you should always choose an intermediary in the form of an escrow for the purchase price. This protects the buyer by not transferring the money for the property to the seller until the title has been transferred, and protects the seller by ensuring that once the buyer sends the required amount into escrow, they are assured that they will actually receive the money once everything is settled.

Tip: Let our solicitors arrange the escrow of the purchase price. Quickly, flawlessly and from the comfort of your home.

Hidden defects in real estate

The next big chapter is hidden defects. These are defects that could not be detected during a conventional inspection of the house and the buyer had no way of knowing about them. They were only discovered over time when the property was used. Such defects can be, for example, rotten beams, poor statics or mouldy walls that have been covered with wallpaper.

If a hidden defect is discovered, the buyer should report it to the seller as soon as possible. This report should be in writing and sent by registered mail with delivery note. The buyer must also prove that the defects he discovered were actually hidden and that they already existed before he bought the property (i.e. that they are not, for example, the result of flooding of the house caused by the buyer).

In our practice we met Mr Kolář. He had inherited his parents’ house, which was in a terrible state and Mr Kolar had no money to repair it. So he decided to sell the house. He informed the buyer in detail about all the defects in the house and we also included them in the purchase contract. In this case, everything went as it should – the defects were not hidden and the buyer had no possibility to ask for their correction or withdraw from the contract in the future.

In the case of hidden defects, the buyer is entitled to their removal by the seller, or a reduction of the original purchase price corresponding to these defects. However, if there are irremovable defects that prevent the normal use of the property (such as problems with the statics and the risk of the property collapsing), then the buyer is entitled to withdraw from the purchase contract.

Tip: If the seller does not respond to your requests, we will send a pre-action notice on your behalf. A pre-suit notice is the most effective and least expensive way to protect your rights. It serves mainly as a last warning before you sue, without having to pay court fees and, in the last resort, risk paying the other party’s litigation costs. If the pre-action notice does not work, we will file a lawsuit for you and represent you in court.

If the buyer decides that he wants to withdraw from the purchase contract, he must notify the seller of this fact. Again, the best solution is to send the notice of withdrawal in writing and by registered letter with acknowledgement of receipt. The notice must state who is giving it and to whom and what it concerns. You should also describe the problem properly and give reasons for the notice.

Buying a home can be a complicated process, full of pitfalls and ambiguities. Therefore, it is very important to check all the details carefully and not to get carried away by the increasing demand in the real estate market. In particular, legal advice and a careful study of the purchase contract are key to minimising the risks and unwanted consequences of buying a flat. In the world of real estate, prevention is better than cure.

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Author of the article

JUDr. Ondřej Preuss, Ph.D.

Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.

Education
  • Law, Ph.D, Pf UK in Prague
  • Law, L’université Nancy-II, Nancy
  • Law, Master’s degree (Mgr.), Pf UK in Prague
  • International Territorial Studies (Bc.), FSV UK in Prague

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