Moderation 10% fine in NVM purchase agreement proves possible after all

When buying and selling homes, model NVM purchase agreement. In it, a penalty clause included. This clause provides that in case one of the parties fails to fulfill its obligations under the contract, a penalty of 10% of the purchase price may be forfeited. This penalty was (almost always) awarded in full in first instance or appeal proceedings until recently. Mitigation of the claimed penalty of 10% of the purchase price took place only in very exceptional cases. The Supreme Court has considered that the required fairness for mitigation only exists if the application of the penalty clause in the given circumstances leads to and excessive and therefore unacceptable result (see ECLI:NL:HR:2007:AZ6638 and ECLI:NL:HR:2012:BW4986).

Turning point in jurisprudence: fine purchase property no longer always awarded

Whereas previously the fine claimed was awarded (almost) with certainty in its entirety, this now seems to have changed. A mitigation of the fine seems to be applied more often. That mitigation seems to relate mostly to a disproportion between the fine and the losses suffered. Cases in which the fine claimed was mitigated see mainly the situation where a purchase agreement has been rescinded and the home was subsequently sold to a third party for a higher purchase price.

Case law in which contractual fine was mitigated

On Nov. 19, 2024, the ’s-Hertogenbosch Court of Appeal moderated the penalty claimed, at the debtor's request, pursuant to Section 6:94 of the Civil Code (see ECLI:NL:GHSHE:2024:3614). According to the court, granting the contractual penalty under the circumstances leads to an excessive and unacceptable result. The court said:

“In particular, the ground for mitigation lies in the disproportion between the defendant's actual damages and the amount of the fine.”

According to the court, the seller's damages should be assessed in the amount of €10,000. The penalty claimed, 10% of the purchase price of €550,000, would amount to an amount of €55,000. In addition, in its decision to proceed to mitigate the penalty, the court takes into account that shortly after dissolution of the purchase agreement, the seller still sold the home to a third party for a higher amount.

Moderation of penalty purchase agreement home

The Arnhem-Leeuwarden Court of Appeal also moved to mitigate a contractual penalty from an NVM purchase agreement (see ECLI:NL:GHARL:2025:1407). This case involved a property sold to the buyers as being an apartment of 90m2. However, the apartment right gives only the exclusive right of use of 70m2. Buyers have the purchase agreement rescinded since the sellers could not fulfill the purchase agreement and claimed payment of the penalty agreed to in the purchase agreement. The penalty claimed was three times the amount of the actual damages suffered by the buyers. The penalty claimed was an amount of €22,200. However, the damages suffered were only €6,377.65.

The court went along with the sellers' request for mitigation of the fine and mitigated the fine to an amount of €6,377.65. Fairness, according to the court, evidently demands in this case that the penalty should be mitigated to the amount of damages to which the buyers are entitled under regulatory law.

Mitigation of contractual penalty is increasingly common

Even in first instance fines from an NVM purchase agreement are nowadays mitigated (see, for example, ECLI:NL:RBOVE:2025:1509). In this judgment, the Overijssel District Court moderated the claimed fine of €100,000 to an amount of €50,000. It considered this because of the disproportion between the fine and the damages actually suffered. Despite it being clear, according to the court, that plaintiff suffered serious damage, awarding the claimed fine would lead to an excessive and therefore unacceptable result. According to the court, the damage actually suffered by plaintiffs is disproportionate to the contractual fine of €100,000. In addition, plaintiffs sold the property to a third party for a higher purchase price.

Finally, a judgment of the Gelderland District Court (see ECLI:NL:RBGEL:2025:5921). In this dispute, the sellers of the home claim a contractual penalty from the buyer since the buyer did not take possession of the home. The buyer argues that, because of the invocation of the financing reservation, did not have to take delivery. According to the court, this financing reservation was not invoked in a timely (and therefore not legally valid) manner. Despite the fact that the buyer is liable to pay a penalty to the seller, the court rules that there is a major discrepancy between the amount of the penalty, i.e. € 60,000, and the damage actually suffered. The court proceeds to moderate the fine to an amount of €10,000.

Mismatch between fine and damages? Defend or substantiate your damages!

In short, if there is a disproportion between the fine and the damages, for example by selling the property to a third party for a higher price than the property was initially going to be sold for, judges look at the difference between the amount of the fine and the amount of the actual damages suffered. Is the fine higher than the damages suffered? Then these days, if mitigation of the fine has been requested by an opposing party, a judge is likely to go along with it. Therefore, if a fine is claimed from you, it is important to put forward a reasoned defense. And if you claim payment of the fine, you will have to properly substantiate your damages.