Right of withdrawal when buying a home
When you buy a home in Denmark, it has been determined by law that the buyer must have the right of cancellation when purchasing a home that the buyer must use for living. It follows from the Act on consumer protection in the acquisition of real estate etc. (better known as LFFE).
It is therefore the relationship between the buyer and the buyer that determines whether the buyer gets the right of withdrawal. The right of withdrawal means that you, as a home buyer, have the option to cancel the purchase and withdraw from the agreement, even if both you and the seller have signed the purchase agreement. Read below for an in-depth look at the subject of the right of withdrawal when buying a house.
Note that the right of withdrawal only applies to the buyer and not to the seller!
When do you have the right of cancellation?
The buyer has the right of withdrawal if an agreement has been entered into for the purchase of a property that is mainly intended for residential use by the buyer. In LFFE's sense, you are therefore a consumer when you need to use the property for living. The different property types covered by the right of withdrawal are:
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Ideal share
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Disused agricultural property (Property where the agricultural obligation has been removed)
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Allotment hut
If you have the right of withdrawal when buying a house, the estate agent will ask you to sign a document on the right of withdrawal together with the purchase agreement. It is also the estate agent's job to tell you when your right of withdrawal begins and ends.
If you wish to make use of your right of withdrawal, you must do so in writing to the seller or the seller's estate agent before the expiry of the withdrawal period. See more about the details below.
How many days of cancellation do you have?
When you buy a home, you have a 6-day right of cancellation when buying a house. Your cancellation period starts the day after you have been notified that the seller has also signed the purchase agreement.
If you receive notification of the seller's signature on a Monday, your cancellation period starts the following day - on Tuesday. Your cancellation period then runs for 6 working days. In the calculation, Saturdays, Sundays and Constitution Day are not counted as weekdays. However, you should be aware that Christmas Eve and New Year's Eve count as weekdays if they fall on a weekday! In the example before, your right of cancellation therefore expires on the following Tuesday at 23.59. To use the right of withdrawal, there are 3 things you must fulfill:
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That the message that you want to cancel the purchase has been received before the expiry of the deadline
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That the message that you want to cancel is sent in writing to both the seller and the seller's estate agent
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That you have paid the compensation to the seller before the expiry of the deadline
If you fulfill the above, it is said that you have used your right of withdrawal and that the transaction has been cancelled. However, you must be aware that your cancellation period starts earlier if it is the seller who signs the purchase agreement first. If the seller only signs the purchase agreement, your right of withdrawal starts already the day after the day on which you are made aware of the seller's sales offer. However, this rarely happens in practice.
What does it cost to regret a house purchase?
If you use your right of cancellation on the house purchase, you must pay a compensation to the seller. This compensation must be paid before the expiry of the period of 6 working days after the conclusion of the agreement.
As a buyer, you must pay a compensation of 1% of the purchase price to the seller. If you, as a buyer, regret your house purchase within the 6 weekday cancellation period, the calculation looks like this, if you have bought a house for DKK 3 million. kroner.
Compensation to seller = 1% * 3,000,000 = 30,000
In practice, you must pay the compensation to the seller's estate agent. The estate agent sends the money on to the seller. The property has not been sold if you regret it, and then the estate agent is not entitled to a fee.
You must be aware that you do not have to pay compensation to the seller in the following situations:
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If we use the advisor reservation in the purchase agreement to cancel the deal
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If you have agreed to buy a house that the seller has built with a view to selling
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If the seller's main occupation is to sell real estate, and the seller has acted as part of this occupation
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If you have purchased a plot of land
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If you have bought a newly built house
If you are in doubt as to whether you should take advantage of your cancellation period or not, you are welcome tocontact Nicolai Vinumfor a non-binding review of your trade.
Can you cancel a house purchase after 6 days?
You can get out of your house purchase after the 6 weekday cooling-off period has expired. However, this requires that a valid advisor reservation has been inserted in the purchase agreement. If there is a valid adviser reservation in the purchase agreement, this is not finally binding on you as the buyer until your adviser has approved the agreement. You can read more about what a buyer's advisor is in our blog post entitled:What is a buyer advisor?
Therefore, you should always make sure that a consultant reservation is entered in the purchase agreement. You and your adviser decide together whether the purchase can be approved. If your adviser, in consultation with you, cannot approve the purchase agreement, he can use his adviser reservation to "cancel" the deal. It is thus a free way to regret your house purchase. The adviser's reservation was formerly called the lawyer's reservation.
Most often, the buyer advisor has 5-8 days to approve the transaction on your behalf. The reservation for your buyer's adviser's approval is concurrent with the right of withdrawal. If you together with your buyer's advisor decide not to approve the purchase agreement, no justification is required and it's free!
You can also use your adviser reservation to have the terms of the purchase agreement changed, if there is anything in the purchase agreement that has not been negotiated before signing. The seller's estate agent often inserts clauses in section 11 of the purchase agreement which regulate the transaction. Often these clauses are not reviewed with you as the buyer before signing the agreement.
Your buyer's adviser subsequently has the opportunity to discuss the legal consequences with you before the agreement is finally approved. If the seller can approve any changes to the terms of the purchase agreement, the deal is maintained. If the seller cannot approve your buyer's adviser's changes, this means that you are free to withdraw from the deal.
It is always a very good idea to have a close dialogue with your buyer's adviser if you are not quite sure whether you are about to buy the house of your dreams. There are several factors which are crucial for whether or not you can use your adviser reservation to regret your home purchase. ContactNicolai Vinumviawour contact form for clarification of your situation.It's FREE and non-binding.
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