Ageing clause: its scope in practice

For the seller of a home, a age clause provide important protection against liability for hidden defects. For the buyer it is often a trap. The buyer must be aware of the existence of the age clause in the purchase contract and its consequences. For example, the existence of the age clause can affect the buyer's duty to investigate.

This is the scope of the ageing clause

The premise is that the age clause can be interpreted broadly. Thus, the clause extends quite far. It focuses on linguistic interpretation within the context of the entire contract, taking into account the so-called ‘Haviltex measure’. However, an appeal the old age clause often does not apply to renovated parts of an older home. After all, their quality is not limited by ‘old age,’ whereas the old age clause covers ‘old’ parts of the home.

This is what you need to know about the aging clause

Case law on age clause: judges rule differently

Conner Canters is an attorney specializing in real estate law. In this blog, he discusses case law on the ageing clause. It shows that judges deal differently with the interpretation of such a clause. The case law shows two different views. In some cases, the ageing clause is interpreted broadly. This means that the court rules that the clause covers the entire property. In addition, it then covers various types of defects. In other cases, the court interprets the old age clause in a more limited way. Namely that it only applies to the defects mentioned in the clause, and only to defects caused by age. 

Age clause sometimes covers defects not due to age

In a December 7, 2021 ruling by the Arnhem-Leeuwarden Court of Appeal (ECLI:NL:GHARL:2021:11262) was held that the old age clause implies a far-reaching exclusion of liability for the seller. To this end, the court considered that the exclusion of liability can go beyond just the hidden defects due to age. To this end, the court considered the following:

“Contrary to [appellant]'s contention, the clause does not read that this exoneration is limited to the portions of the real estate that are more than 100 years old. By including the clause in Article 24, in the court's opinion, the parties have created an exception to the warranty regarding the presence of the properties necessary for normal use as a residence.”

In other words, the exoneration (that is, the exclusion of liability) thus applies to the entire house and regardless of whether the building parts in question are affected by age. Because, says the court of appeal: the text of the age clause shows that the parties intended to deviate from the guarantees about normal use that are elsewhere in the purchase agreement have been given. 

In a January 26, 2016 ruling, the ’s-Hertogenbosch Court of Appeal (ECLI:NL:GHSHE:2016:193) to the same conclusion. That court considered:

“That this exclusion of liability would be limited to defects caused exclusively by the age of the dwelling cannot be read into the provision. It is also not obvious, in the Court's opinion, that such a limited scope was intended by the provision. The fact that the provision is titled “Oldness Clause” does not alter this.”

It follows from previous rulings that in some cases an old age clause is interpreted broadly whereby the seller's liability is significantly limited. This can involve great risks for the buyer. The buyer may be left empty-handed, even if he finds hidden defects not caused by age.

Age clause only applies to defects due to age?

Other rulings have held that the old age clause applies only to defects resulting from the age of the property. In a June 18, 2019 ruling by the ’s-Hertogenbosch Court of Appeal (ECLI:NL:GHSHE:2019:2166) has ruled that the age clause does not apply as a general exclusion of liability, but that the nature of the defect must fit within what is meant by ‘age-related defects. Only then is a reliance on the old age clause possible. To this end, the court considered:

“On the other hand, a buyer of a clause bearing the name “Clause on Ageing” will (may) expect, as a rule, that it only serves to shift the risk to his disadvantage insofar as it concerns defects that are actually the result of the age of the house. This is all the more the case in this case, as Article 22 is worded very generally.”

The Arnhem-Leeuwarden Court of Appeal (ECLI:NL:GHARL:2015:912) came to the same conclusion in its ruling of Feb. 10, 2015. To this end, it considered the following:

“The court believes that [the respondent] could reasonably have understood the second sentence of Article 20 of the purchase agreement (see Section 2.13) in the context of the first sentence, which expressly speaks of the construction quality of the property, and in conjunction with Article 5.3 (see Section 2.1.2) to mean that the warranty of Article 5.3 was excluded only for defects resulting from the age of the property.”

That ruling held that (the cause of) the defect was not sufficiently related to the age of the home.

This is why judges rule differently on the scope of the age old clause

The varying judgments have several reasons, namely:

• the wording of the ageing clause: each sales contract is different and the broker often uses his own wording for the ageing clause. Thus, the judges in the above rulings do not apply a general rule or general age clause, but rather rule on a specific clause in a specific sales contract.
• the intent of the parties: when interpreting a clause in a contract, the court looks at what the parties intended. Often that is clear from the text (wording), but that is not always the case. Sometimes there have been emails that give rise to a broader or narrower application of an age clause.
• the arguments presented by lawyers: which arguments are put forward and which are not may influence the direction the judge chooses.
• and so on.

It is therefore important for both buyers and sellers to properly discuss in advance what is meant by the ageing clause and what defects it does and does not cover. Make sure you also document what has been discussed. This prevents discussions afterwards. If you do end up in a discussion afterwards, the wording of the clause or the content of conversations that have taken place can be used to determine how far the ageing clause extends. Lexys' real estate lawyers are regularly called in to help formulate ageing clauses, or indeed to help settle disputes about them.