Bustadoppføringslova
Bustadoppføringslova is the Norwegian act that governs consumer purchases of newbuild homes from a developer. It applies when a commercial developer builds a home for a consumer, whether that is a whole house, a section in an apartment building or a share in a borettslag (housing co-operative). The act is the consumer's most important form of rettsvern (legal protection) when buying new from a prospekt (sales prospectus), before or while the building goes up.
The legal basis is the Act of 13/06/1997 no. 43 on consumer agreements for the construction of new housing. The act covers three situations: an agreement to construct a building on the consumer's own plot, an agreement that includes both plot and building, and an agreement to buy a home before it is completed. After completion, the legal relationship moves to an ordinary purchase governed by avhendingsloven (the Norwegian conveyancing act). The distinction is practical: an apartment bought from a prospectus before move-in falls under bustadoppføringslova, while the same apartment bought second-hand from the first owner falls under avhendingsloven.
The guarantee security in section 12 is the core of the consumer protection. The developer must provide a bank guarantee or insurance corresponding to at least 10% of the consideration, and the guarantee runs for 5 years after handover. The guarantee sum can be reduced to 5% for claims raised at a later point than in connection with handover. The guarantee covers claims the consumer gains against the developer in the event of bankruptcy, defects or delay. The 5% guarantee is the practical protection against construction defects that appear after move-in, and it runs until the complaint deadline expires. Advance payment is only permitted on specific conditions under section 47, which also governs the provision of guarantees in such cases.
The complaint deadline is 5 years from handover for both visible and hidden defects, see section 30. That is longer than the 2 years that often apply to purchases of a used home under avhendingsloven (5 years for home purchases under avhendingsloven section 4-19 after the 2022 revision, but in principle the same rule). Delay triggers a daily penalty under section 18 of 1 per mille (0.1%) of the consideration per day for up to 100 days, without the consumer having to document a financial loss. This is a significant automatic compensation mechanism that most other construction and delivery contracts in Norway do not have.
The consumer has the right to withhold an amount matching the defects until the remedial work is done, see section 31, and can claim a price reduction or cancel the purchase where defects are serious. Changes to the project along the way are governed by section 9: the consumer can request changes and additional work as long as this is not unreasonably burdensome for the developer, and the consideration for such changes is set under section 42. The developer can claim compensation for documented loss if the consumer cancels the order under section 53. The act cannot be departed from to the consumer's disadvantage, see section 3; standard contract forms from Boligprodusentenes forening and Forbrukertilsynet usually build in the 5% guarantee and the daily penalty rule.
A ferdigattest (final completion certificate) or a midlertidig brukstillatelse (temporary permit to occupy) is normally a condition for handover to take place. Defects found at handover must be recorded in the protocol, and a tilstandsrapport (condition report) or the surveyor's handover inspection is central to documenting claims within the complaint deadline. A professional developer acting as tiltakshaver (the party responsible for the works) is bound by the act regardless of the wording of the contract.
From Placepoint's glossary: Bustadoppføringslova
More information: Lovdata: Bustadoppføringslova, Lovdata: section 12 on guarantee security, Forbrukerrådet: buying a home under construction
English: The Housing Construction Act (Norwegian-specific, governs consumer purchase of newbuild homes).
Frequently asked questions
When does bustadoppføringslova apply?
The act applies when a commercial developer builds a home for a consumer, or sells a home before it is completed. After completion, the legal relationship moves to avhendingsloven.
How much guarantee security must the developer provide?
The developer must provide a bank guarantee or insurance of at least 10% of the consideration, valid for 5 years after handover, see section 12. The guarantee sum can be reduced to 5% for claims raised after the handover date.
What is the complaint deadline?
The complaint deadline is 5 years from handover for both visible and hidden defects, see section 30.
What is the daily penalty for delay?
The daily penalty is 1 per mille (0.1%) of the consideration per day for up to 100 days, see section 18. The consumer does not have to document a financial loss to claim it.
Can I request changes along the way?
Yes, the consumer can request changes and additional work under section 9, as long as this is not unreasonably burdensome for the developer. The consideration for changes is set under section 42. Larger changes must be agreed separately.