A purchase agreement for real estate records the sale of immovable property. It creates only an obligation to transfer; ownership passes at a later stage, on execution of the notarial deed of transfer and its registration. Where a consumer buys a home, the agreement must be in writing to be valid.
Statutory basis
The general rules on sale are in title 7.1 of the Civil Code. Article 7:2 requires a written agreement for the sale of a dwelling to a consumer buyer and grants a statutory cooling-off period. Article 7:3 allows the purchase to be registered in the public registers, and article 7:17 sets the conformity standard. Most transactions use a model deed drawn up by the estate agents’ associations and the consumers’ association.
How it works in practice
The model deed follows a fixed pattern: description of the property, price and completion date, guarantee of normal use, transfer of rights and obligations, and a set of conditions. Standard elements are a deposit or bank guarantee of ten per cent of the price, a penalty of ten per cent for non-performance after notice of default, and one or more conditions precedent, usually financing and sometimes a structural survey.
Where it goes wrong
Age and non-occupancy clauses cause the most disputes. They shift the risk of hidden defects to the buyer, but only within their own wording: a clause about the age of the installations does not cover asbestos or a leaking foundation. Second, the guarantee of normal use protects intended use as a dwelling, not the buyer’s plans for an extension or a rental unit; that requires an express provision. Third, buyers who let the agreed completion date pass without a proper notice of default lose the right to the penalty.
Related terms
Statutory cooling-off period, financing condition and transfer of title.
Further reading
More on this subject: Dutch Real Estate Purchase Agreement Explained.
Are you buying or selling and do the clauses need checking before you sign? Our real estate lawyers review the deed and the conditions.
