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12 Jan 2024 Does the requirement of Article 7:2(1) BW in writing apply to the purchase of a building plot by a consumer?

The court in Overijssel heard a case in which a seller claimed damages from a buyer for attributable breach of contract. The court referred a preliminary question to the Supreme Court as to whether the requirement of written form in Article 7:2 paragraph 1 of the Civil Code applies to the purchase by a consumer of a plot of land intended under public law for the construction of a dwelling. Last month, the Supreme Court ruled.

What was at stake here?

A seller had offered a plot of land for sale on Funda in August 2021. The advertisement stated "building plot for building a detached house with outbuilding(s)." The plot was zoned (in part) under public law for the construction of a house.

A few days later, the plot was viewed by the buyer. On the same day, he made an offer of €550,000 for the plot by e-mail. The bid was accepted by the seller. A draft purchase agreement was then sent to the buyer by the estate agent.

Subsequently, the buyer informed the seller's broker that he waived the purchase of the plot. The plot was subsequently sold to a third party in March 2022 for a purchase price of €465,000.

The procedure

The seller initiated proceedings against the buyer and claimed an order against the buyer to pay, inter alia, €85,000. According to the seller, a purchase agreement had been concluded between the parties and Article 7:2 paragraph 1 of the Civil Code did not apply to it because there was no dwelling on the plot. The buyer imputably failed to comply with this purchase agreement, resulting in damages in the amount of €85,000.

The buyer argued, inter alia, that the plot was a residential property and therefore Article 7:2 paragraph 1 of the Civil Code applied. According to him, the written requirement of this provision was not met and therefore no purchase agreement was concluded.

By interlocutory decree, the court put the following preliminary questions to the Supreme Court:

Is a plot of land zoned residential (Planning Act) an immovable property or component thereof intended for habitation within the meaning of Article 7:2 paragraph 1 of the Civil Code? And if so, under what conditions or circumstances?

Supreme Court ruling

The Supreme Court's answer is as follows:

The preliminary questions raise the issue of what is to be understood by "the purchase of an immovable property or component thereof intended for habitation" in Article 7:2 paragraph 1 of the Civil Code.

Article 7:2 of the Civil Code reads as follows:

  1. "The sale of an immovable property intended for habitation or part thereof shall, if the buyer is a natural person not acting in the exercise of a profession or business, be entered into in writing.
  2. The deed drawn up between the parties or a copy thereof shall be delivered to the purchaser, if requested against submission to the seller of a dated receipt. During three days following this handover, the buyer shall be entitled to dissolve the sale. If, after the purchaser has exercised this right, a new purchase is concluded between the same parties within six months with regard to the same goods or parts thereof, the right does not arise again.

.

According to the parliamentary history, "an immovable property intended for residential purposes" is to be understood as a building or part thereof that serves residential purposes, which is hereinafter, following the parliamentary history, referred to simply as "a dwelling".

To answer the question of whether there is a sale of such an immovable property, the decisive factor is whether the seller has committed himself in the contract vis-à-vis the buyer to deliver ('give' in the wording of Article 7:1 of the Civil Code) a dwelling, or whether the buyer has a right vis-à-vis the seller to delivery of a dwelling. After all, for the qualification as a purchase contract within the meaning of Article 7:2 of the Civil Code, the rights and obligations agreed by the parties are decisive.

Whether at the time the sales contract was concluded there was a dwelling - the actual situation at the time the sales contract was concluded - is an important point of view in answering the question of what the object of the sale is, but it is not decisive for answering the question of whether this contract must be qualified as a sales contract within the meaning of Article 7:2 of the Civil Code.

It follows from the foregoing that if, in the contract, the seller undertook vis-à-vis the buyer - a natural person not acting in the exercise of a profession or business - to deliver a dwelling, the requirement in writing of Article 7:2 paragraph 1 of the Civil Code and the cooling-off period of Article 7:2 paragraph 2 of the Civil Code apply.

In contrast, if the seller has undertaken towards the buyer to deliver a plot of land (without a dwelling), Article 7:2 of the Civil Code does not apply. This also applies if that plot has the public-law destination 'residential', if the plot has been sold as a building plot, or if the seller knows that the buyer intends to build a house (or have a house built) on the plot.

On the basis of the foregoing, the preliminary questions must be answered as follows: a sales contract in which the seller undertakes vis-à-vis the buyer to deliver a plot of land with the public-law destination 'residential' is not a sales contract within the meaning of Article 7:2 paragraph 1 of the Civil Code.

Conclusion

Thus, when selling a plot of land intended for residential development, there is no requirement in writing and no cooling-off period. The seller's claim for damages will be awarded in this case because a purchase agreement did come into being between the seller and the buyer and the buyer imputably failed to fulfil his obligations.

Would you like to know more or do you have questions about your position as a buyer or seller? If so, please feel free to contact one of our lawyers without any obligation. We will be happy to assist you and keep you informed of further developments!

SPEE advocaten & mediation Maastricht