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Liability Law

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Contractor’s liability after sale

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Purchasing a property is a drastic affair that can come with numerous problems.

In previous blogs, we have discussed topics ranging from hidden defects to insurance issues.

In today’s blog, we will elaborate on a particular issue particularly the relationship between the new owner and the contractor.

Issues:

Suppose you purchase a property in 2021.

At the time of sale, the property is inspected and no problems present themselves.

The notarized deed is signed and You move into your new home.

Two years later, YOU are faced with a leak in the attic.

You have a professional come and they determine that the roof has serious defects.

You find that odd now that at the time of the sale the owner informed you that the roof was completely renewed.

This is also true now that YOU received all the information about this at the time of the sale, such as the written offer, the invoice,…

What should YOU do now?

Seller’s liability:

Your first reflex will probably be to turn YOU against the seller.

Although this reflex is perfectly understandable, the seller bears no responsibility.

After all, you can only declare the seller in default for hidden defects if you can prove that this buyer knew about them and nevertheless failed to inform you about them.

In our case, however, this is not the case.

After all, the roof had recently been renewed and the seller never experienced any inconvenience.

Although there is effectively a hidden defect, You cannot hold the seller liable for it.

Contractor’s liability:

You should not panic in such a case.

After all, you can hold the contractor who did the roofing work accountable without any problem.

After all, all claim rights of the previous owner against his contractor are transferred to the new buyer along with the property.

This therefore means that the contractor has the same duties to the new buyer as to the seller/builder.

However, this also means that the contractor could raise the same so-called exception against the buyer as against the seller.

For example, the contractor may have had advance warning of a particular problem and informed the seller that there would be no warranty for certain work.

In that case, the contractor will also be able to raise this against the new buyer.

Do you have questions about contracting or construction law?

Contact Peterfreund & Associates, your attorney in ANTWERPEN.

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Fire insurance: a flag that covers many loads

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Is fire insurance mandatory?

Purchasing fire insurance as a property owner is not mandatory.

However, as will be shown below, YOU would do well to purchase fire insurance.

Even as a tenant, it is best to purchase fire insurance.

We have already discussed the particular issue of waiver of recourse in a previous blog post.

Misleading name:

Contrary to what the name suggests, fire insurance often covers much more than the mere risk of fire.

For example, fire policies usually also provide coverage for water damage, and by law, they also include natural disasters.

Legal Aid:

A very interesting option as a policyholder is legal expenses coverage.

If You take out this option, in the context of a dispute relating to a covered claim be it fire, theft, water damage, the insurer will ensure that You receive legal assistance.

Initially, the company itself will take the necessary steps to represent your interests e.g. against liable third parties.

If the company fails to have a satisfactory outcome, You will be allowed to consult an attorney at the insurance company’s expense.

Theft:

Theft coverage is also usually optional.

If You choose this option, in case of theft, the insurance company will also intervene for the damage suffered to the extent that the stolen goods cannot be recovered.

However, as the insured, you would do well to read the policy carefully.

After all, the general or special terms and conditions will often dictate what duties YOU have to avoid theft.

It usually involves locking all windows and doors when You are not home, possibly providing an alarm system, etc.

If you often have valuable goods in your home (such as jewelry) or large sums of cash, you will have to declare this to the insurer and pay a higher premium for theft coverage.

What on the sale of the property:

An interesting case involves the situation where a property is sold.

Many people do not know this, but according to Article 111 of the Insurance Law, the individual fire insurance policy taken out expires three months after the date on which the notarial deed was executed unless this policy was already terminated earlier.

This means that the seller’s insurer may have to intervene for claims up to three months after the execution of the notarial deed.

However, this does not apply if the policy was previously terminated.

However, it is recommended that the buyer of a property take out their own fire insurance this is to avoid all discussions.

Do you have questions about insurance law?

Contact Peterfreund & Associates, your insurance law attorney.

huurrecht en verzekeringsrecht

Waiver of recourse: Intersection between rental law and insurance law

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Those who rent property as tenants do not assume that the property will ever be damaged.

Nonetheless, the tenant is well advised to go over all possible scenarios to hedge against any claim for damages from the owner or third parties.

Legally, tenants must insure their tenant liability.

This means that the tenant must purchase their own fire insurance.

However, the owner and tenant can agree that this is not necessary and the tenant will be covered by the owner’s fire insurance.

In that case, we speak of waiver of recourse.

Waiver of recourse in fire insurance:

If the landlord’s insurance policy includes a waiver of recourse clause, the insurer will not be able to proceed against the tenant in the event of a claim.

This is an exception to the general principle that the insurer paying out a claim is stepping into the rights of the insured.

Suppose a property burns out as a result of arson.

In that case, the insurance company will pay compensation to the owner and then the insurer will turn against the arsonist.

However, such a right of recourse is rendered impossible by a waiver of recourse clause.

There is one exception to this.

If the liable third party has its own insurance, the owner’s fire insurer will deal with the insurer of the liable third party.

If there is a waiver of recourse clause in the insurance policy then you cannot.

Liability of recourse in the lease:

Now suppose there is a waiver of recourse provided in the owner’s insurance contract but the owner fails to pay his premium.

In that case, there is no valid insurance.

Theoretically, therefore, the owner who suffers damages could possibly turn against his tenant in person.

To avoid such a risk, it is therefore advisable to include the waiver of recourse not only in the insurance contract but also in the rental agreement.

Waiver of tenant’s recourse against landlord:

On the other hand, a waiver of recourse can also be agreed upon in the other direction, specifically from the tenant to the landlord.

After all, suppose a fire starts due to the poor condition of the electricity and damages the tenant’s belongings.

In that case, the tenant will be able to turn against the landlord or the tenant’s insurance company against the landlord’s insurance company.

Then parties may choose to include a waiver of recourse.

Careful with the premium:

At first glance, a waiver of recourse for parties seems to have only advantages.

Thus, the owner will not have to worry about whether the tenant has their own insurance on the one hand, nor will the tenant have to fear any recourse in the context of any claim.

However, nothing is free.

If the owner includes a waiver of recourse in his insurance policy, the premium will be increased by the insurance company.

In general, one can assume that a premium with a waiver of recourse is 15-20% more expensive than an insurance policy without a waiver of recourse.

As a landlord, the difference in premium can possibly be absorbed by charging a higher rent.

For questions about rental law and insurance law, Peterfreund & Associates is happy to assist.