Late damage claims by real estate buyers up in recent years
In recent years, more homebuyers have filed claims long after closing to cover defects missed or unmentioned during the sale, prompting sellers to list all known issues.
Under Estonian law, a buyer has up to three years after a real estate purchase to claim compensation from the seller for defects that come to light post-sale — something buyers are increasingly taking advantage of. For example, if mold or dry rot is discovered during renovation, buyers have demanded tens of thousands of euros in compensation.
"Technical problems, heating systems — anything that's not visible on inspection. Then there's documentation — missing permits, unauthorized renovations. These are all things that can lead to claims. And in our climate, you can't ignore mold. Any kind of moisture issues can raise red flags," said Ardo Lepp, a board member of the Estonian Association of Real Estate Agencies.
The amounts being claimed vary widely.
"I'm currently handling a case where the claim is €30,000 and the property sold for about €250,000," said Alar Voogla, a consultant at 1Partner.
There have been so many problem cases that agents now try to build trust between the parties before they even reach the notary's office.
"Three weeks ago, we called off a deal the day before closing because the buyer suddenly started demanding various construction guarantees. But there were no guarantees available. The seller had hired a friend for the renovation, not a professional contractor, so we couldn't guarantee anything," Voogla said.
While real estate agents and lawyers have noted a sharp rise in claims in recent years, the Ministry of Justice says the spike in lawsuits began after a 2015 Supreme Court ruling. The court found that "it would be practical, necessary and fair to include clauses in notarized apartment sale contracts specifying which defects the seller is aware of."
"Today, notaries and judges agree the wave has passed. The situation is clearer now and notaries are well equipped to advise people on how to draft proper contracts," said Minister of Justice and Digital Affairs Liisa Pakosta (Eesti 200).
"Since 2015, court practice has evolved to the point where any issues a seller could reasonably be expected to know must be listed in the contract. And if something truly couldn't have been known, then the buyer doesn't have the right to claim compensation," she added.
Lepp said the law clearly favors the buyer, meaning sellers need to be extremely cautious.
"We try to prevent problems by gathering as much information as possible from the seller about potential trouble spots, so we can disclose them to the buyer and include them in the sale contract. These contracts can get long, but there's no way around it," Lepp said.
"The law has been in place in this form for more than 20 years. The problem isn't just the law — it's that buyers have become more informed. They know they have the right to file claims and they do, often with no basis, or they inflate the issues," said real estate lawyer Evi Hindpere.
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Editor: Marcus Turovski, Marko Tooming
