28 October 2024
When a residential property is sold, this can be done verbally or in writing. If the parties agree on the so-called 'essentials' of the purchase, such as the price and the object, then they are in principle bound to the purchase. However, for a private buyer, there is a written requirement that stipulates that the buyer is only bound to the purchase when it is documented in writing.
In this article, I will further elaborate on the written requirement and which parties can (not) invoke it. I conclude with an interesting recent ruling from the District Court of The Hague.
Before elaborating on the written requirement, it is important to note that the starting point is that an agreement is reached through offer and acceptance (Article 6:217 Dutch Civil Code (‘DCC’). When one party makes an offer and the other party accepts it, there is an agreement (consensus). An (verbal) agreement is therefore binding even if it is not documented in writing.
The written requirement of Article 7:2 DCC provides an exception to this principle. It stipulates that when a private buyer (someone who does not act in his profession or business; a consumer) sells his/her house, he/she is only bound to this purchase if it is also documented in writing. The rationale behind this is to protect the private buyer against impulsive purchases.
In 2011, the Supreme Court ruled that a private seller (who does not act in his business or profession), can also invoke the written requirement when selling his house to a private buyer. If the two private parties reach verbal agreement on the essentials of the purchase agreement, but the seller refuses to sign the written purchase agreement, then the private buyer cannot compel him to fulfill the purchase (legally).
The Supreme Court explicitly stated in its ruling that the protection of the written requirement of Article 7:2 DCC is intended solely for the protection of consumers (private individuals). A professional buyer or seller, who acts in his profession or business, cannot invoke this. They are simply bound by a verbal purchase agreement.
The Amsterdam Court of Appeal ruled in 2020 that from the legislative history of Article 7:2 DCC it follows that the legislator did not intend to protect the private seller when selling his house to a professional party. A private seller is deemed to have had sufficient time and opportunity to be informed about the intended sale, so he does not require additional protection. A private seller can therefore also be bound by an oral purchase when dealing with a professional.
In a recent case (ECLI:NL:RBDHA:2024:9125) where I represented two private sellers, however, the District Court of The Hague nuanced this ruling of the court. The court ruled that a private seller is only bound by a verbal purchase agreement if it was clear to him or her that he was dealing with a professional buyer or if the purchase was documented in writing.
What was the case about? The case concerned a brother and sister who had inherited a house together. The brother had negotiated with two (professional) parties (two general partnerships) on behalf of the sister about a possible sale. No final agreement was reached with one general partnership, but it was with the other. Agreements were made with the second general partnership that were documented in a written purchase agreement, and the house would be delivered a few weeks later.
The partners of the first general partnership disagreed with this. They believed that the brother had first entered into a verbal purchase agreement with them and that the sellers were bound by it. They seized the house and demanded compliance with the verbal purchase agreement. In summary proceedings, I requested on behalf of the heirs the lifting of this seizure. The preliminary relief judge ruled in favor of the heirs and stated:
‘(…) [The seller] correctly argued that it was not clear enough for [the seller] that he was dealing with a business buyer. Only if it was crystal clear for [the seller], can a verbal agreement be invoked against him as a private seller. (…) It has not been stated or shown that [the partners] explicitly informed [the seller] during or after the viewing, at the office. Nor has it been shown that [the seller] under the given circumstances should have immediately understood that [the partners] acted on behalf of a general partnership. (…) It was up to [the partners], as professional real estate traders, to explicitly inform [the seller] beforehand that they were acting as professional buyers and that if [the seller] accepted the offer, he would be immediately bound.’
A (purchase) agreement can be reached verbally or in writing. The written requirement states otherwise; a private buyer is only bound to a purchase if it is documented in writing. For a private seller, this requirement applies only when dealing with a private buyer. However, from the aforementioned ruling of the District Court of The Hague, it appears that a private seller dealing with a professional buyer is only bound to the purchase if it was clear to him that he was dealing with a professional, or if the purchase was documented in writing.
Are you a private seller or have dealings with a private seller? And would you like to know more about the written requirement? Please feel free to contact us.
[1] HR 9 december 2011, ECLI:NL:HR:2011:BU7412.
[2] Hof Amsterdam 20 oktober 2020, ECLI:NL:RBAMS:2020:2757.
