tape measure NVM

Realtors in the Netherlands must not apply double standards

The Supreme Court recently ruled that an NVM broker (NVM is the Dutch organsation for realtors) can be held liable for mentioning an (incorrect) living space in a sales brochure that has not been measured according to a measurement instruction laid down by the NVM. A clause in the sales brochure stating that no rights can be derived from information in the brochure does not detract from this liability.

 NVM measurement instruction

Since 2010, NVM brokers are obliged to measure the house according to a special uniform NVM measurement instruction.  In this way, the NVM wants to promote that customers know exactly where they stand in case an NVM broker gives an indication of the surface area. Despite this measure, unfortunately not all NVM brokers comply with this measurement instruction. The disciplinary board of the NVM therefore regularly reprimands members for mentioning a larger quantity of square metres than would be the case if the measurement instruction were properly carried out. The question is whether the broker has also acted unlawfully towards the buyer under civil law and if he can therefore be held liable.

Unlawful (also with standard exclusion clause)

In answering this question, the Supreme Court concurred with an earlier judgment of the Amsterdam Court of Appeal. The Court of Appeal ruled that an estate agent acts unlawfully if he states a larger living area than would be the case if he followed the measurement instruction, because the buyer of a dwelling may rely to a large extent on the fact that the measurement instruction was carried out in accordance with the measurement instruction. The measurement instruction, which the NVM has made compulsory for its members, is specifically intended to protect the interests of prospective buyers. An NVM broker cannot, therefore, simply use a different measuring method. The fact that a broker states in the sales brochure that no rights may be derived from measurements mentioned in the sales brochure is set aside by the Court of Appeal and the Supreme Court. “Such a standard statement is in itself not specific enough to undermine the confidence that the prospective buyer may derive from the mandatory nature of the measurement instruction”.

Exceptions

Although the starting point is that an NVM broker acts unlawfully if he does not comply with the established measurement instruction, this may be different when;

  1. the buyer had to understand from statements or behaviour of the realtor that a different measurement method was used;
  2. there are specific circumstances that should have led the buyer to doubt the stated area.

Did the buyer suffer any damage?

Finally, there may have been unlawful conduct, but there can nevertheless be no damage. In a case before the Court of Appeal of Arnhem-Leeuwarden, the real estate agent had also failed to comply with the measurement instructions used by the NVM. However, despite its smaller size, the house turned out to be worth more than the price originally paid for the house. Furthermore, the buyer could not prove that he had not bought the house for the same amount of money as he had known that the house was smaller. Therefore, the court of appeal rejected the claim for compensation now that there was in fact no question of damage.

Does your home not comply with what the real estate agent had measured? Then please feel free to contact M2 advocaten for free advice.

 

Paralegal Arjan Ang (ang@m2advocaten.nl)

Lawyer Ginio Beij (beij@m2advocaten.nl)

checklist

Duty of care mediator. Control tenant. Damage due to loss of rent?

This question was recently raised in a case before the Arnhem-Leeuwarden Court of Appeal. The case was as follows.

A number of heirs offer the house of their deceased parents for sale through a mediator. After some time, the mediator let them know that no candidate buyers have presented themselves, but there is a candidate who would like to rent the house. Initially the heirs do not really feel for this opportunity, but eventually they agree and through the intermediary a rental agreement is made.

After this, things start going wrong. The police discover a hemp plantation in the house and by order of the mayor the house is closed. It is also established that electricity has been stolen. For the damage of over Eur. 7.000,– that Liander suffers as a result, the heirs are sued.

The heirs then take the mediator to court and claim compensation for the damage suffered by them. As a basis for their claim, the heirs argue that the intermediary has failed in his duty of care because he did not sufficiently investigate the tenant.

The Court of Appeal goes along with this. The Court of Appeal considers that the mediator should check the identity of the potential tenant and whether the tenant is able to pay the rent due, by obtaining information about his income.

The intermediary has fulfilled the first obligation – although the identity card handed over had already expired when the lease was entered into – but has not fulfilled the second obligation. The tenant submitted a payslip – which was later found to be forged – which raised numerous questions and which should have been a reason for the intermediary to obtain more information (copy of the employment contract, employer’s statement, etc.) and, if necessary, to contact the alleged employer. By contenting himself with the pay slip, the mediator violated his duty of care.

The question remains as to which damages are eligible for compensation. First of all, the heirs claim compensation for repairs to the house of more than Eur. 17,000. This is awarded because it is directly related to the presence of the hemp plantation in the house. In addition, compensation of the evacuation costs and compensation of Liander’s claim of over Eur 7,000 will also be awarded.

But what about compensation for missed rental income? That will be rejected. After all, the Court of Appeal considered that if the mediator had recognised that the tenant had submitted a false pay slip (i.e. had been careful), no rental agreement would have been concluded and the heirs would not have had any rental income.

The ruling shows once again that a mediator is obliged to screen candidates properly. If not, he violates his duty of care. If this is the case, not all damages are eligible for compensation, but only damages that are (causally) related to the violation of the duty of care. This is not the case for lost rental income.

Would you like to know more? Feel free to contact us.

Marius Rijntjes (rijntjes@m2advocaten.nl)