1. Overall
Deficiencies and how they are handled is an issue that is primarily raised after the home has been taken over by a consumer.
In this article, we review the rules on complaints, the contractor's obligation and right to redress, as well as the rules on price reduction and compensation, respectively.
Several contractors use the term “aftermarket” regarding the complaint period. This is especially true for larger housing producers who at any given time have many hundreds of apartments for follow-up, and who have therefore organized themselves with their own departments dealing only with “aftermarket”.
However, the issues are the same whether you are a large housing producer, or an individual housebuilder who builds a few homes or cottages per year.
2. What is a deficiency?
2.1 Introduction
It follows from section 25, first paragraph of buofl, that there is a deficiency if the result “does not comply with the requirements arising from the agreement”.
In other words, the starting point is the agreement of the parties.
If it has been agreed that the house will be supplied with solid walls, a coat of primer and two coats of paint, there will be a deficiency if the walls are not fully primed.
Bufol § 25 also refers to what is supposed to accompany the dwelling if it is built in a turnkey contract or the agreement includes property rights, cf. buofl § 13 which we have written about in the article “The Agreement” paragraph 4 which can be read here. It also refers to the law's provision on amendments and additional work (buofl § 9) and the justification is that ordered changes and additions must of course also be carried out in order to avoid shortages. We have written about this provision in “Project implementation” point 4 that can be read here.
The Bust Registration Act also contains its own provisions that are relevant when deciding whether there is a deficiency, or not. These are dealt with below.
2.2 “Professional good” work and materials of “vanleg good quality”
When advertising a work, the complaint is often rooted in Section 7 of the Buofl.
In this provision it is established that the work shall be carried out on “professional good sense”, while the materials should “have good quality”.
We have written a little about this provision in the article on “Project implementation” item 3 which can be read here. In that article we also refer to what we have written about requirements for the subject of the contract in NS 8407 paragraph 4 with a link to it.
Here we will go a little deeper into the determination since the angle becomes somewhat different when we write specifically about shortcomings.
The condition that the work must be carried out on “professional good sense” refers to a general and objective norm of what is generally considered to be a professionally good, work done.
One cannot agree that the work should not be carried out in a worse way, but of course there is an opportunity to agree on far better work than is usual.
It can be agreed that the building should be secured against moisture penetration by using two alternative methods of moisture protection. Another example is that it is agreed that all joints between walls, ceilings and floors should be so well executed purely artistically that there is no need for moldings to hide any cracks.
Where nothing is specifically agreed with regard to the standard, it shall be “vanleg” and then the question becomes how this is decided.
If you ask an experienced craftsman with good professional education and extensive experience with Norwegian construction practices and requirements, you will be able to get good input and answers on what is “usual good standard” within the respective subjects.
At the same time, different craftsmen may have different perceptions — either because it is purely subjective judgment or because one has different references or examples.
More objective evidence of what is “usual good standard” will be found in, for example, the manufacturer's laying instructions, tolerance classes in NS 3420, the building detail sheets of SINTEF Byggforsk or other manuals published by, for example, SINTEF.
The law requires that the materials must “have good quality” is stated in buofl § 7, second paragraph.
This provision opens the possibility that the parties may have agreed otherwise, and it must be understood that one may have both agreed on a lower quality than what is “vanleg”, but also a better one.
What is meant by materials can probably be discussed in the sense that a kitchen is something different and more complex than, for example, wood of various types and dimensions. We nevertheless perceive “materials” to encompass everything that is delivered, and built into, a dwelling.
Often the parties will have agreed on a very specific brand and type when it comes to larger building parts such as kitchen fittings, fireplace inserts, type of flooring, stairs, etc.
On the other hand, it is rare to agree on anything special when it comes to building materials in general such as wood used in beams or masonry, moldings indoors or the type of wood to be used for outdoor work such as balconies, gangways, stairs, ramps, etc.
In such cases, the contractor must use materials of “usual good standard”.
If you buy new materials from a Norwegian building materials store, you will normally get materials that meet the requirements. However, it does not exclude that the contractor may have ordered and assemble/ used materials that should not be used for the particular task for which they have been used.
It may be that a vapor barrier with too thin dimensions is used, or unimpregnated wood has been used when erecting balconies, stairs and ramps outdoors with the consequence that the wood will rot.
A third example is the use of something that appears to be impregnated materials, but which turns out to be of foreign origin and where the impregnation is significantly inferior to what is “usual” when purchasing impregnated materials at a Norwegian building materials store.
A fourth example is where untreated chipboard has been used for indoor use in wet areas of wet rooms or on siding.
Since the provision to use materials of “usual good standard” can be waived by agreement, we must point out that inferior materials may have an unintended consequence by not complying with public law requirements. In this case, there may be a defect even if the parties had agreed otherwise, but it will normally depend on whether the contractor has made the consumer aware that in that case there is a consequence, cf. buofl § 25, second paragraph.
Finally, it is mentioned that today it is becoming more and more common to reuse materials and building materials that have previously been used on other buildings (circular economy). It will be possible to agree to use such materials even if the standard is lower than what is “usual” for new materials. Examples include the reuse of older windows or used bricks or paving stones, etc.
2.3 Public law requirements
It is stated in section 25, second paragraph of buofl, that the final result shall be “in accordance with the requirements of the public prosecutor (...)”.
We have written about this provision in the article “Project implementation” point 3 that can be read here.
It is worth noting that execution contrary to public law requirements is to be regarded as a defect unless the consumer had an understanding that this would be the result.
One can imagine, for example, a situation where the consumer has a desire for execution that the contractor states is in violation of, for example, TEK17 or in violation of the building permit. As an example of the latter is that the consumer insists on having a window mounted on a wall where it is not overlaid.
2.4 Incomplete or incorrect information
There may also be a deficiency if it turns out that the contractor has provided incomplete information (buofl § 26) or incorrect information (buofl. § 27).
The focus will then be whether the contractor has failed to provide information about work, materials or property he knew of, or provided incorrect information about any of this, to the consumer.
The prerequisite for such incomplete or incorrect information to be considered as missing in the final result is that the missing or incorrect information “I have entered into the agreement.”
If it can be assumed that it did not matter to the consumer whether one or the other was correct, or whether the consumer knew or did not know of the relevant relationship, there would be no shortage.
Such assessments are of a distinctly discretionary and judicial nature. It is not this type of deficiency that primarily creates challenges in practice, and we therefore do not go into more detail on these provisions here.
3. Timing of the Deficiency Assessment
It is the situation at the time of the takeover that is central when it comes to clarifying whether the final result has a deficiency or not, cf. buofl. § 28.
A practical example is scratches in window glass.
If the takeover business was conducted in the usual way, protocol written and it says nothing about scratches on window glass, then the probability will be high that there were no scratches on the takeover itself.
If so, this speaks in favor of the fact that the scratches were applied to the glass after takeover.
A few months later, however, the situation occurs that consumers advertise scratches in windows located on the third floor, the scratches are applied from the outside and they are also not allowed to open.
If so, it is more likely that the scratches were on the windows at the time of the takeover but were overlooked, than that they have been inflicted after the takeover. If so, the scratches represent a deficiency for which the contractor has a deficiency liability.
It would have been different if the scratches were advertised several years after the takeover and/ or they have appeared on the inside of the windows.
This type of assessment often has to be done when faced with deficiencies that are incurred after the residence has been taken over.
Another example is sewer pipes that run clogged four years after the residence was taken over.
If investigations show that the drain pipe was clogged by diapers that must have been flushed down the toilet, the cause will obviously be improper use, and then there is no shortage of the contractor's works.
It can be different if the drain pipe has become clogged as a result of backlash on the drain line.
A loss on a sewer line will usually be due to defective work that was available at the latest at the time of the takeover, but which is not discovered until long afterwards. We are then talking about a hidden defect or deficiency.
In section 28, second paragraph of buofl, a provision on so-called warranty liability is included.
If the contractor has guaranteed certain properties for, for example, ten years from the date of the acquisition, it is normally sufficient to establish that the properties are no longer fulfilled in order for liability for defects to be asserted. There is no need to probabilise that the shortfall existed at the time of the takeover.
4th. Complaints
4.1 Overall
If the contractor is to be held responsible, the consumer must advertise, and the complaint must be filed in a timely manner.
The rules on complaints are contained in buofl section 30, and there are two types of complaint rules.
One has the relative complaint deadline and the absolute complaint deadline.
4.2 The absolute deadline for complaints
The absolute deadline for complaints is five years and the deadline begins to run at the time of the takeover, cf. buofl § 30, first paragraph, second sentence.
If, for example, a dwelling has been handed over to a consumer on 1 June 2024, the claim liability will expire by the end of 31.5.2029.
From this there are two exceptions.
If a guarantee has been given that, for example, the ventilation system will last for 10 years, the absolute deadline for complaints for this facility will be 10, and not 5, years, cf. buofl § 30, first paragraph, third sentence.
The second exception applies to defects resulting from gross negligence on the part of the contractor, or that the contractor has acted in violation of “heider and good tru”, cf buofl § 30, fourth paragraph.
Often, this type of quotation is made when a consumer has made a complaint after the absolute complaint deadline has expired.
It normally takes a lot of time to make such representations to the Court because there is a rather strong reproach in such characteristics as this. It is the person who puts them forward (consumer in this case) who must also make the likelihood that the entrepreneur has behaved in such a way.
If a consumer claims gross negligence against a contractor, our advice is that the contractor contact a lawyer for assistance.
4.3 The Relative Deadline for Complaints
The relative time limit for complaints implies that it must be advertised “before a reasonable period of time after the consumer discovers or should have discovered the defect”,cf buofl § 30, first paragraph, first sentence.
A similar rule applies in contracts between professionals, see for example NS 8407 paragraph 42.2. first paragraph which establishes that the builder must advertise “within a reasonable time”.
Although “reasonable time” used in both sets of rules, there is a big difference between them.
In NS 8407 paragraph 42.2.2, first paragraph, “reasonable time” is considered to be a maximum of 1-2 weeks. We have written a part about this in the article on defects and complaints, subsection 4.3 which can be read here.
In the Consumer Relations Act, on the other hand, the consumer is granted more time to lodge a complaint, and there is support in case law that 2-3 months is accepted as “within rimeleg time”.
A developer who receives a complaint from a consumer must therefore turn around quickly and advertise further to his general contractor.
You cannot invoke the rules of the Bust Registration Act against your professional party - unless otherwise specifically agreed.
4.4 Complaints in connection with the takeover
In professional matters governed by, for example, NS 8407, the rule is that the builder's right of complaint falls away if he does not advertise conditions that he discovered, or should have discovered, at the time of the takeover itself, cf. NS 8407 paragraph 42.2.1.
Such a rule is too strict in consumer relations.
Accordingly, the rule is that the consumer must complain about errors and deficiencies that were or should have been discovered at the takeover business “as soon as advice is”, cf buofl § 30, second paragraph.
The premise is that a takeover business was conducted.
What is “as soon as advice is” It may vary depending on the type of error involved, but this is a time limit that is significantly shorter than “within a reasonable time”.
Since this rule applies in cases where a takeover transaction has been carried out where the starting point is to advertise the takeover business itself, it is assumed that the consumer must advertise relatively soon after the takeover transaction. It might seem right to say within a few days of the actual takeover business.
If a takeover business is not conducted and the takeover occurs by use there is no specific rule, but it is assumed to be shorter than “within rimeleg time”. We believe a lot of advocates that the deadline should be “as soon as advice is” Which only involves a few days. Should there be a situation where you have let the consumer take over when using it and complaints begin to come in long after, you should contact a lawyer for assistance if you are considering contesting the complaints.
4.5 Complaints in connection with the one-year inspection
If the parties have agreed that a one-year inspection shall be held, cf. buofl § 16 “Seinare synfaring”, the consumer must advertise “as soon as advice is” after the one-year examination has been held, cf. Section 30, third paragraph.
“As soon as advice is” must be understood in the same way as when advertising over deficiencies discovered on the takeover business.
5. Relationship with the statute of limitations
It is very important to pay attention to the rules of the statute of limitations.
It follows from Section 3 (2) of the Limitations Act that claims are subject to a limitation period of three years from the date of the takeover.
This means that claims that are advertised more than three years after the takeover as a starting point are obsolete.
If there are so-called hidden errors and deficiencies, an additional one-year grace period applies, cf. Section 10 of the Statute of Limitations.
One does not cancel the limitation period by advertising, nor by discussing possible liability for defects.
We have written a detailed article about the statute of limitations in the article “Obsolescence and Complaints” that exists here.
6. Remediation
6.1 Overall
When there is a defect, the contractor has — as a starting point — an obligation to remedy, but also a right to remedy it.
Such is the rule in the bust entry law, and it is also this that is the rule in the professional standard contracts.
We have written quite extensively about the rule in NS 8407 (paragraph 42.3.1) and that article can be read here.
Section 32 of the Bust Registration Act is the relevant provision, and it deals with both the contractor's obligation to rectify, and — right.
6.2 The contractor's duty to rectify
When a defect is advertised (on time), the entrepreneur is given an unconditional duty to correct the relationship.
Normally, remediation is initiated reasonably quickly after the defect has been advertised on a takeover shop. Then the contractor normally has his rig on site, the various subcontractors are prepared for a round of remediation work, and the remediation works can normally be carried out without unnecessary additional costs.
It is different when new defects are advertised after the takeover, and usually it is during the first year of use that most defects are discovered.
For this reason, it follows from section 16 of buofl that the parties may agree that a one-year examination be held.
When the parties have agreed that a one-year inspection is to be carried out, it follows from section 32, third paragraph of buofl, that a contractor may postpone the correction of defects until after the one-year inspection, provided that it does not disadvantage the consumer.
The rationale of the rule is that contractor should be able to carry out his remedial works in a rational manner. There will always be costs associated with going out and then it will be appropriate and rational to collect and repair everything in the same operation.
Usually this will also be a benefit for consumer who is given a set period of time during which the housing must be made available to contractor.
What then becomes the rule if the parties have not agreed on a one-year inspection, or deficiencies arise after the one-year inspection with subsequent remedial works has been completed?
In that case, one must refer to the main rule in section 32, third paragraph, first sentence of buofl, which states that the defect must be corrected “before rimeleg time”. In the same provision, it is established that the time limit is calculated on the basis of the complaint itself and when the consumer has enabled the contractor to correct.
It is therefore incumbent on the consumer to contribute so that the entrepreneur receives income.
What is meant by reasonable time will necessarily depend on the type of defect, how significant it is for the consumer's use of the home, whether the lack of remediation may result in damage to other parts of the dwelling (e.g. water leaks), etc.
In a good number of cases, the contractor will also need to align their remediation work with multiple consumers. This will be the situation in which larger apartment buildings are concerned and where remedial works have to be carried out in a number of apartments.
In order for entrepreneurs to carry out their remediation work in a rational and efficient manner — overall — entrepreneurs are advised to establish a good dialogue with consumers so that a good plan is created that everyone can agree on.
However, the contractor's remedial obligation is not unlimited.
If a remedy proves to be prohibitively expensive, or demanding, and this is not commensurate with what the consumer obtains, the contractor may refuse the remedy, cf. the first sentence of the first paragraph of Buofl 32.
For example, should there be a wall with a minor solder deviation that is barely visible and of little practical significance, it will be prohibitively expensive to demolish the wall and then rebuild the wall. The fact that the consumer “knows” that the wall is somewhat out of place, or for aesthetic reasons does not want to see that there is a greater slip between a cabinet and wall at the top compared to the bottom, is not sufficient to impose a repair obligation on the contractor.
6.3 The right of rectification of the contractor
It is very important to maintain the right of the contractor to correct the advertised defects himself, cf. buofl § 32, second paragraph.
If the remediation works are given away to a third party, the cost of remediation is usually higher than if the contractor repairs himself, and the consequence can then be an unnecessarily high demand for price reduction or compensation.
Accordingly, a contractor who receives a complaint should arrange himself in such a way that he does not lose his right to rectification.
One should offer to rectify and then comply with the rules applicable to the deadlines for remediation, ref what we wrote in paragraph 6.2.
With that said, we would like to highlight two conditions that must be met for a contractor to have the right to rectify, cf buofl § 32, second paragraph.
First, the correction must be able to be carried out 'without significant detriment to the consumer', Secondly, there must not be a “special reason” for the consumer to oppose rectification.
Experience-wise, these types of situations do not occur very often, but when they do occur it is usually because the consumer has lost confidence in the entrepreneur. It can happen, for example, if the contractor has made several attempts to repair, but without success. Or entrepreneur has promised to come to consumer to remediate, but without following up. However, this rarely happens and we do not devote any more space to this here.
The opposite situation can also occur. You have a consumer that makes it virtually impossible to remedy because you are denied access. If this happens, it is important to ensure documentation that it is the consumer who is obstructing the remediation work — it is not the contractor who is defaulting.
In fact, there is a risk that a consumer ends up leaving the remediation work to a third party, and then it is important that the contractor can document that he himself has done everything he can to get the remedy.
If the contractor can reasonably believe that he has offered to repair and has nevertheless been refused, then the contractor is exempted from both his obligation to repair and cannot be required to pay the consumer's remediation costs, cf. buofl § 33, first paragraph.
6.4 Remediation costs
The contractor is responsible for all costs involved in establishing the deficiency, the supply, the repair itself, etc., cf. buofl § 32 last paragraph.
This includes costs for returning the contract work to its original condition — for example, because you had to demolish something to make ends meet.
In addition, costs come for cleaning, cleaning, etc.
An example of costs for finding a deficiency is the expenses of expert witnesses. It happens that the consumer engages expert to investigate very specific conditions. Usually it results in a report where deficiencies are described.
Depending on who the consumer uses as an expert, the costs can be significant, and the starting point is that these are the responsibility of the contractor.
Usually, it is only when complaints are disputed and the consumer does not feel that they are getting anywhere in their dialogue with the contractor that external experts are involved.
Costs to experts that the consumer engages to attend a takeover business, on the other hand, are not a cost the contractor is obligated to pay. This also does not apply where the expert has discovered errors or deficiencies that must necessarily be enshrined in the takeover protocol.
7. Price reduction
If the contractor unlawfully refuses to repair, the consumer is entitled to a price reduction, cf. buofl § 32, first paragraph.
The price reduction shall correspond to the cost of correcting the defect, cf. the second paragraph of the provision.
There is no condition that the deficiency is actually remedied. A price rejection claim will often be based on a calculation or assessment carried out by an expert at the behest of a consumer, ref what we wrote about experts in the point above.
It follows from section 33, second paragraph, second sentence of buofl that the consumer cannot claim a price reduction corresponding to the cost of the repair if it is “preposterous hawk” in conjunction with “that shortage has to mean for the consumer”.
In this case, the consumer is only entitled to a reduction in price corresponding to the reduction in value represented by the defect, or the savings obtained by the contractor by not delivering defect-free.
Earlier in the article, we used an example of solder discrepancies on a wall. Presumably it is difficult to determine a reduction in the value of the dwelling due to a single case of a soldering discrepancy, nor is it likely that the contractor saved money on the wall being erected outside the lot.
Other examples can of course be made, but the point is that these assessments are very concrete and discretionary.
The most important advice for an entrepreneur is that you do not think that consumers have to go the wrong way about a price rejection claim because it usually involves a legal process with the costs and risks that this entails.
8. Replacement
It follows from section 35 of buofl that a consumer may claim compensation for his financial loss if the loss is not covered by a price rejection claim.
With that said, we clarify that consumers need not first go the route of a price rejection claim. The consumer may make a claim for compensation directly, possibly in combination with a price rejection claim.
The claim for compensation does not assume that the contractor has done anything negligent.
It is sufficient to establish that there is a shortage and that the consumer has suffered a financial loss as a result of it.
In practice, enough claims for compensation will be reserved for losses that cannot be covered as price reductions.
As an example, lost rental income on a dormitory that the consumer has not had the opportunity to rent out pending the correction of deficiencies.
In such a situation, it would be natural to demand that the remediation costs be covered in the form of a price reduction, while lost dormitory income would be required to be replaced.
9. Concluding comment
In Chapter IV of the Bust Entry Act “Shortcomings of the contractor's performance” are there several provisions we have failed to comment on.
This applies to the provision on raising (buofl. § 34), claims against the underlying clause (buofl. § 37) and lack of justice (buofl. § 39).
We have also failed to comment on the provision on the scope of liability (buofl. § 36) where the contractor is liable for damages under buofl. § 35.
The rationale is that these provisions regulate situations that either rarely occur or because they are of a distinctly legal nature. In these cases, the entrepreneur should seek the assistance of a lawyer.
