When buying an apartment in a new building, one of the most common problems that buyers face is the delay of investors with the construction of the facility. It often happens that the investor exceeds the expected deadline for construction, and in exceptional situations this delay can be inappropriately long.
The earlier the facility is in the construction phase, the greater the risk that there will potentially be a delay in construction, since it is impossible to predict all the circumstances that may affect the deadline. The reasons for the delay do not have to be only on the side of the investor, but it can also be a consequence of various objective circumstances that the investor himself cannot influence, slow administration or reasons that can be considered force majeure. The situation caused by the corona virus is the best example of how “life stopped” for a relatively short time, which led to the temporary suspension of many construction works.
Already during the negotiations with the investor, it is important to inquire about the planned deadline for the construction of the facility, and in the (pre) contract to define the deadline for the completion of works and handing over the apartment as a functional part of the facility to the buyer.
Institute of contractual penalty
A possible form of protection of customers from potential delay is the institute of contractual penalty. The contractual penalty is defined by the Law on Obligations, the provisions of which stipulate that it can be agreed that a party late in fulfilling the obligation may pay a certain amount of money, which the contracting parties may determine at their discretion in one total amount or as a percentage for each day of delay. in some other way (e.g. for each month of delay).
The practice is that the amount of the contractual penalty is agreed in the amount corresponding to the market price of the rent, although it is important to note that the seller and the buyer are free to determine its amount, and that it depends solely on their agreement.
At this point, we point out to the buyers that there are also investors, noting that they are in the minority, who do not agree to agree on the obligation to pay a contractual penalty in case of delays in construction.
The problem with delays in construction is especially big for credit buyers, because it happens that buyers start repaying loan installments and at the same time continue to pay rent for the apartment they rented because the apartment they bought is not finished, even though they planned to set aside money. for rent divert to loan installment.
The difference in an apartment in a new building and old building
at the end is important to note that no contractual provisions on contractual penalties customers the same will not be able to demand from investors, which is why it is important that the (pre) contract find provisions that will define the obligations of investors. Buying an apartment in a new building requires additional attention to details that are missing when buying an apartment that has already been built, and in case of such a purchase, keep in mind this important legal institute that can provide you with some protection to relax and look forward to your new home.