Written requirement for purchase of real estate

Entering into contracts is almost always form-free in the Netherlands. Even a verbal agreement is legally valid, just like the proverbial beer mat. An exception exists if a private buyer purchases a real estate property intended for residential purposes. Then the law requires that this agreement be in writing. Otherwise, the purchase is not legally valid. That seems like a clear rule, but it very often happens that it is not immediately clear whether the written requirement applies, or not.

Private individual buys home: requirement of writing

If a natural person not acting in the exercise of a profession or business buys a property intended for residential purposes, the purchase must be in writing. A purchase agreement must be drawn up and signed by both parties. After that, a 3-day cooling-off period also starts for the private buyer.

Private individual buys investment property

It becomes less clear if that individual buys an investment property. Is there then still a requirement of written form, or is the buyer then bound by (for example) a Whatsapp message or agreement via e-mail on the essentials of the agreement? Case law has ruled that a private buyer who buys a property as an investment will not always do so ‘in the exercise of a profession or business. This is what the Amsterdam Court of Appeal in 2020. So even then, the written requirement simply applies and the buyer is not bound until he signs. It becomes different if that investor buys homes and sells them for a living. Then there will rather be a business purchase. See, for example, an earlier judgment of the Amsterdam Court of Appeal. So the investor who buys a property and does not want to be tied down quickly would be wise to pay close attention.

No individual or no residence, but still written requirement

But even if the buyer is not a private individual or the sale is not about a home, there may be a writing requirement. This is the case, for example, when the parties are negotiating and one of the parties sends a draft sales contract stating that rights can only be derived from it after mutual signature. This is the case, for example, when the NVM model the case. If there is then agreement on that draft but it has not yet been signed, then an agreement on the writing requirement also applies. That confirmed the Rotterdam court at the end of 2021.

Purchase agreement signed but buyer or seller wants to get out of it

If a party wants to get out of the contract if there is a written purchase agreement, or if there is an agreement while there is no requirement in writing, there may still be ways to get out of the contract. Conversely, if a contract has not yet been signed, there may be circumstances that oblige the buyer or seller to do so. For advice on this, contact the lawyer real estate From Lexys Lawyers.