Compensation after rescission of purchase agreement

About the recent ruling of the North Holland court (ECLI:NL:RBNHO:2025:6641), three blogs have now appeared on this website. The first blog was about the dissolution of purchase agreement due to severe flooding. The buyer successfully rescinded the purchase agreement on the grounds of nonconformity. The second blog dealt with the enforceability of the judgment. More specifically, it addressed the question of whether the positive verdict now meant that the house was actually had to be delivered back to the seller. In this third (and final) blog, I address the damages claimed. Indeed, the judgment addresses several interesting aspects of damages law.

The case in brief: villa converted into six luxury apartments

For those readers who have not read the other blogs (yet), here is the case in brief. The lawsuit was filed by two buyers of an apartment in the basement of Villa Rodesteijn in Bloemendaal. This is a villa built in 1902, which was rented out for years as an office villa. Cobraspen, a well-known developer from the Haarlem region, is the seller. Cobraspen has been the owner for several decades and has recently transformed the office villa into 6 luxury apartments. One of these is located in the basement. After delivery, the buyers experienced severe flooding. Almost all the walls are soggy and leaky. The buyers therefore dissolve the purchase agreement and the court agreed. In addition, the buyers claim compensation. I discuss those damages and how the court dealt with them in this blog.

Compensation after rescission of purchase agreement

The law states the consequences of dissolution of a contract. First, the consequence is that implementing acts must be reversed. These are called undo commitments. They are obligations to undo the contract to the extent that it has been performed. Of course, these obligations only apply to the extent that it is actually possible to do so. In the case of a sales contract, this involves delivering the item back and refunding the purchase price. In addition to these undoing obligations, the party dissolving is also entitled to compensation for damages. These are the damages that this party suffers because rescission takes place instead of performance. The buyers of the apartment in Villa Rodesteijn claim compensation for various items of damage in the lawsuit.

Purchase costs, furnishing costs and pre-purchase inspection

The judgment discusses various costs incurred for the apartment. One is the cost of the structural inspection. The seller argues that these costs are not eligible for reimbursement. This is because the structural inspection did not reveal any defects. According to the seller, this means that the inspection was insufficient and that these costs therefore do not have to be reimbursed. The court makes short shrift of this argument: the fact that the defect was not revealed is only due to the fact that no destructive examination was carried out, which is not unusual. In contrast, the costs of purchasing a bathroom cabinet, a bookcase and curtains are not eligible for reimbursement. This is because the fact that these were custom-made does not mean that they are no longer usable. The cost of a patio fence must also be reimbursed by the seller, but this takes into account its depreciation. Finally, the cost of an alarm system - finally - is not eligible for reimbursement, because these costs were not necessary for the use of the apartment.

Damage from increased housing prices

It is interesting to see how the judge dealt with market conditions. Indeed, the buyers argued that if they wanted to buy back a similar home, they would be approximately 10% more expensive due to increased home prices. The judge went along with this. Which takes the average price increase since the time the home was purchased and orders Cobraspen to compensate the buyers €146,940.

Rising mortgage rates in this case no harm

On the other hand, the judge does not consider that the fact that mortgage interest rates have increased is a circumstance that should lead to compensation. Indeed, the court considers that no additional financing will be needed at a higher interest rate because the buyers are already receiving compensation related to the increased home prices. The court considers:

“The court agrees with Cobraspen that in addition to compensation for the increase in the purchase price, [plaintiffs] cannot also qualify for compensation for increased financing costs on that increase. As ruled above, of [plaintiffs] are entitled to compensation for the increased purchase price, so that for that part of the purchase price the financing requirement is lacking and therefore they do not suffer an interest disadvantage.”

Apparently, the court assumed that the buyers could ‘take’ their financing (including interest rate agreements) with them to their next home. Whether this is so and what was stated about this in the proceedings is not clear from this judgment. Incidentally, it does not follow from this judgment, that compensation for higher mortgage costs is never eligible for compensation. That is apparently true in this case only because the court ruled that the financing need is lacking.

Transfer tax paid is damage in case of rescission of purchase agreement

The transfer tax paid is also a loss eligible for compensation in the event of dissolution. The court does not devote any substantive considerations to this. It does not need to, because the seller did not put up a defense against this item of damage. In my opinion, award was obvious, since the transfer tax would not have been paid if the purchase agreement had not been concluded. Dissolution should then lead to compensation of this damage item. Alternatively, it would have been claimed that the transfer tax of a future home would have been reimbursed, however, the extent of this damage item is not yet known.

Expert costs are eligible for reimbursement

At article 6:96 paragraph 1 sub b BW states that “reasonable costs to establish damages and liability” eligible for reimbursement. This means that the costs of the surveys conducted into the flooding should be paid by the seller. The fact that the VvE was the client of one of those surveys does not make this different. Because the buyers contributed to those costs as members of the VvE, they suffered damages. Their share of those costs must therefore be compensated by the seller. The latter still argues that the invoices are too unspecified, but the court dismisses that by considering that (a) the invoices show that they are related to the flooding and (b) by ruling that the amount of the costs are reasonable, given the severity of the flooding.

Damage to personal property not adequately substantiated

The buyers in this case claimed compensation in the amount of €15,000 for damages to personal property. According to the court, however, that claim was not sufficiently substantiated. The basic principle in procedural law is that the party bringing a claim must state that and why it should be awarded. Furthermore, that party must provide evidence of correctness of his assertions. We call this the duty of proposition and burden of proof. It is true that the buyers submitted photos of moldy shoes and a suitcase with mold, but according to the court this was not sufficient for the verdict that €15,000 in damages had been suffered. This was partly because “unclear [is] whether said property is completely unusable” and unclear whether “this fungus has led to permanent damage”.

Intangible (and/or material?) damages for loss of residential enjoyment

Finally, the buyers have claimed €50,000 in lost living space. They indicate that this is immaterial damage, because they have experienced a lot of stress due to the continuous efforts to control the water damage. This has had a negative impact on their quality of life and warrants compensation for lost living enjoyment. In evaluating this claim, the court begins by considering that damages for loss of residential enjoyment can be either material or intangible:

“It follows from case law that lost residential enjoyment, depending on the situation, can be qualified as property damage or intangible damage.8 Under circumstances, a serious impairment in residential enjoyment can lead to an impairment of the person as referred to in Article 6:106 paragraph 1 of the Civil Code.”

However, the court finds that insufficient evidence has been presented to that effect:

“It is up to the injured party to substantiate with sufficiently concrete facts and circumstances that such a situation is at issue. The court is of the opinion that, although it is clear that the moisture problem has an impact on daily life and causes stress for [plaintiffs], this is insufficient to speak of such a situation. There is no place in the circumstances for immaterial damages in addition to material damages. This claim will therefore be rejected.”

Compensation for loss of housing is possible if it is property damage?

In my opinion, the judgment is incomplete on that point. In view of the provisions of Section 25 of the Dutch Code of Civil Procedure (ex officio supplementation of grounds), the court could also have examined whether the claim with respect to the loss of enjoyment of residence could be based on a substantive ground. By mentioning both bases in the judgment but not discussing one of them, there may have been a missed opportunity. Materially, in fact, the buyers incurred costs (interest charges, municipal charges, etc.) related to the use of the property. Since they did not have the enjoyment thereof, those costs might have been eligible for compensation as damages for loss of residential enjoyment.

For example, in a case filed earlier this year at the Amsterdam District Court (ECLI:NL:RBAMS:2025:3478), considered:

“4.5. (...) Continuous leaks, having to remove furniture and mold growth in the form of mushrooms, interfere with normal use of a living room and this results in loss of residential enjoyment.”

“4.6. (...) At the hearing, [plaintiff] explained that the living room is 60 m² and the rest of the apartment was normally usable as of November 24, 2021. The total area of the apartment is 120 m², which means that half of the apartment was not usable. Assuming a rental value for the entire apartment of €100.00 per day, the court sets the lost enjoyment of living at half of that, and thus at €50.00 per day from November 24, 2021 until the date of general restoration.”

Lawyer for claiming damages

Cobraspen must not only take back the property from the buyers (however, not immediately, see this blog), as well as pay damages totaling €198,000. In addition, Cobraspen was ordered to pay the legal interest AND the collection costs of €6,775 to the buyers. The seller was also ordered to pay the legal costs of the buyers to be reimbursed. These also total nearly €7,000. All in all, for the seller, who will soon also have to take back a property that is difficult to sell, to say the least, it has become a costly exercise.