Housing trade and advisory services

YHA Kuvapankki / IIlona Osara

From moisture and mould disputes, to more safer real estate transactions


At any given time, hundreds of disputes are pending over moisture or mould damage related to real estate transactions in Finland. The need to renovate a building because of mould or moisture damage frequently becomes apparent only after the transaction is concluded, and it is an unpleasant surprise to buyer and seller alike. The extensive two-year Programme to Combat Moisture and Mould Damage has generated several proposals for remedying this situation. A key factor lies in increasing the willingness, ability and opportunities of the parties to the transaction to evaluate the true condition of the building being sold, and to prepare in advance for potential problems. Further improvement of home inspections is also vital.

According to various estimates, a quarter of the more than one million single-family houses in Finland are in immediate need of renovation due to moisture or mould damage, or in order to prevent such damage. If the need for renovation is detected after a real estate transaction is concluded, the parties often end up in a dispute over it, and this may lead to a judicial inquiry into liabilities. Disputes related to real estate transactions are usually complex, expensive and lengthy. Approximately 16,000 single-family houses are sold in Finland each year.*

Dozens of home inspection specialists and legal specialists, along with key actors in the industry, participated in this extensive, two-year project aimed at improving real estate transactions safety. The final report published today proposes improvements to aspects such as transaction practices, home inspections and qualification criteria for inspectors. The report does not recommend making home inspections mandatory; nevertheless, determining the true condition of a property before concluding the transaction is proposed as a crucial way of preventing disputes.

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Key proposals for increasing real estate transactions safety:

YHA Kuvapankki / Pirjo Ferin

Changes to home inspections

  • Uniform qualification requirements, a training system and registers of qualified actors and home inspections carried out should be created for the home inspection sector.
  • The content, methods and reporting of home inspections should be harmonised into a new type of home assessment. In addition to physical examination checking for signs of mould or moisture, home assessment should include in-depth investigations.
  • The home assessment should include a mandatory meeting between the property owner and potential buyer, to verbally review the findings of the assessment.
  • Home assessors' qualifications, tasks and responsibilities to transaction parties should be provided for in legislation.
Reviewing transaction practices
  • The real estate broker should encourage the seller to determine the condition of the property, in order to establish the condition of the residential building and the related risks.
  • The broker should be knowledgeable of the assessment report and ensure that the transaction parties are also familiar with its contents.
  • The parties to the transaction should be afforded sufficient time to familiarise themselves with the report and consider the transaction and its terms, particularly the price, on the basis of the established condition of the property.
  • The key findings of the home assessment report, and any division of liabilities agreed upon regarding them, must be recorded in the deed.

Amendments required to statutes

  • Act on Home Assessors (Ministry of Justice and Ministry of Employment and the Economy)
  • The qualification requirements for inspectors of moisture damage and other indoor air problems should be added to the National Building Code of Finland (Ministry of the Environment)
  • Amendments to the Code of Real Estate (Ministry of Justice), in order to facilitate agreement on the division of responsibilities between real estate transaction partners, and to oblige vendors to determine the condition of residential buildings prior to sale.

Final report of the project and its appendices (in Finnish).

Additional information is available from:

Project for Improving Real Estate Transactions Safety:
Tiina Koskinen-Tammi, Alfa Law Firm
Tel. +358 50 593 5545
tiina.koskinen-tammi(at)alfalaw.com

Programme to Combat Moisture and Mould Damage
Juhani Pirinen, Programme Manager
Tel. +358 50 572 6351
juhani.pirinen(at)ymparisto.fi

*Real estate transaction price statistics 2011, National Land Survey of Finland (in Finnish)

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Know Your House, Sell it Safely- A new guide to assist sellers and buyers in real estate transactions


At any given time, hundreds of disputes are pending over moisture or mould damage related to real estate transactions in Finland. The Programme to Combat Moisture and Mould Damage has published a new, practical guide for improving the safety of real estate transactions for both sellers and buyers. The Central Federation of Finnish Real Estate Agencies (KVKL), which represents the majority of Finnish real estate industry actors, recommends including the guide in the standard set of real estate transaction materials.

YHA Kuvapankki / Pentti Hokkanen

According to various estimates, a quarter of the more than one million single-family houses in Finland are in immediate need of renovation due to moisture or mould damage, or in order to prevent such damage. The need for renovation often comes as an unpleasant surprise after a real estate transaction has been concluded. A typical dispute arises when a flaw in or damage to a property, of which the parties were unaware before concluding the transaction, is detected only after the sale.

The new guide entitled "Know Your House, Sell it Safely" has been produced as part of the two-year project for improving the Safety of real estate transactions, itself part of the Programme to Combat Moisture and Mould Damage. This guide, drawn up by a broad group of specialists, provides sellers and buyers with concise and basic information on transaction-related questions related to the condition of real estate. The guide also describes the role of home inspections in determining the condition of a property and examines legal questions related to moisture and mould damage and quality defects.

"Know Your House, Sell if Safely" guide (in Finnish)

Additional information is available from:

Project for Improving Real Estate Transactions Safety:

Tiina Koskinen-Tammi, Alfa Law Firm
Tel. +358 50 593 5545
tiina.koskinen-tammi(at)alfalaw.com

Programme to Combat Moisture and Mould Damage
Juhani Pirinen, Programme Manager
Tel. +358 50 572 6351
juhani.pirinen(at)ymparisto.fi

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Housing trade practices in the Nordic countries surveyed as part of programme to combat moisture and mould


This survey, commissioned under the programme to combat moisture and mould, was compiled by the engineering office Raksystems Anticimex Insinööritoimisto Oy.It examined the housing and residential real estate stock of the Nordic countries and investigated the related trade. While the buyer and seller's obligations are largely similar, there are clear differences between means, such as condition inspections and insurance policies, designed to protect the interests of those involved. The survey shows that Denmark offers the most extensive protection for housing transactions.

Conducted as part of the programme to combat moisture and mould, among other issues the survey assessed legislation governing the housing trade, liability-related issues and condition inspections performed during transactions. Insurance policies offered to the parties involved were also examined. The survey was carried out in Finland, Sweden, Norway and Denmark*

Each participating country has around 1 - 1.5 million detached houses. Finland's total number of detached houses sold is distinctly below the average of the other countries surveyed. The number of detached houses sold was highest in Sweden, with more than 57,000 residential real estate items changing hands within a year. Correspondingly, only 15,000 residential detached houses changed owner in Finland.

The survey revealed that Denmark was the only country to regulate the following issues by decree: the contents of condition inspections conducted for property transactions, training and supervision of condition inspectors, and the contents of the condition inspection report. No corresponding regulations exist in Finland, Sweden and Norway. Insurance policies covering property transactions are aimed at securing the position of the buyer or seller, should any damage be discovered which was not apparent during the transaction. The type, contents and prices of insurance policies differ between each country.

In the other countries participating in the survey, property transaction insurance policies are commonplace. Sweden has three types of insurance policy whereas, in Norway, the seller can take out a 10-year insurance policy when selling the property. This covers the change of ownership, while the other party is covered by home buyer's insurance. In Denmark, the seller and buyer are protected by a change of ownership insurance policy. Such a policy covers hidden defects and faults, and is granted on the basis of the condition inspection report. Danish regulations stipulate that this insurance policy must be drawn up in such a way that it is viable for the buyer and seller in all circumstances.

*Commissioned by the programme to combat moisture and mould, the survey was compiled in the autumn of 2009 by a working group from the engineering office Raksystems Anticimex Insinööritoimisto Oy. Information on Sweden was collated by Per Bergström of Anticimex Ab, on Norway by Roy Nilsen of Anticimex A/S and on Denmark by SabroeMarketing.

More information:

Marko Malmivaara, general manager
Raksystems Anticimex
Tel. + 358 400 464 934
marko.malmivaara(at)racx.fi

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Housing trade and advisory services


Hundreds of disputes concerning housing and real-estate trade are continuously pending in Finland, due to moisture or mould damage. The programme to combat moisture and mould seeks to enhance housing trade security both for sellers and buyers. In particular, insurance practices, condition inspection practices, and the increased know-how of parties in the trade are key tools in this respect. Within the programme, a survey comparing housing trade practices in the Nordic countries has been conducted, and a corresponding Europe-wide survey is being planned.

There is abundant information available in Finland on problems caused by moisture and mould, and other indoor air issues. However, this information is scattered and often difficult to understand, or even contradictory. The programme aims to enhance the knowledge and competence of both private and professional property owners regarding moisture and mould damage. The availability of reliable information via the Internet and non-governmental organisations' advisory and support services will be enhanced. For instance, a comprehensive, easy-to-use, and well-functioning public website is being planned.

More information:

Alfa Law Firm
Tiina Koskinen-Tammi
Tel. +358 50 593 5545

Leena Laurila
leena.laurila(at)alfalaw.com

Muoto Oy
Antero Pentikäinen
Tel. +358 400 625 711
antero.pentikainen(at)gmail.com