Change-of-ownership insurance in Denmark: the seller’s role

Separate insurance cover from seller liability

Change-of-ownership insurance concerns certain hidden defects and damage at the transfer. It is not a guarantee of a problem-free house, and ordinary wear or lack of maintenance is not covered as such. The Danish consumer authority’s Forbrug.dk guide explains the main coverage limits.

As seller, avoid answering unresolved property questions by suggesting insurance will probably pay. Describe what you know and let buyers clarify coverage with their insurer. Questions about your own responsibility should be addressed separately with your adviser, rather than inferred from a buyer’s decision to purchase a policy.

Source: Forbrug.dk: Change-of-ownership insurance (in Danish)

Review the entire package before signing

The home inspection scheme involves valid condition and electrical reports, an insurance quotation and the seller’s offer to contribute half its premium. Timely delivery to the buyer matters. Exceptions to the liability protection exist, so have your adviser assess the specific transaction.

Record who is responsible for each document, its version and when it was supplied. If a report changes, check whether the insurance quotation also needs updating. A folder containing all the expected file names is insufficient if different documents rely on different information about the property.

Source: Boligejer.dk: Documents for the Danish home inspection scheme (in Danish)

Calculate the contribution from the correct quotation

If the buyer chooses a different policy, the seller’s contribution remains based on half the premium of the quotation the seller supplied. The buyer’s policy purchase and payment need documenting for settlement. Boligejer.dk explains this process.

For arithmetic only, a supplied quotation of DKK 16,000 gives a half-premium contribution of DKK 8,000. This is not a market price estimate. Retain your actual quotation and include the amount in the sale budget, rather than discovering the expense when the post-sale statement arrives.

Source: Boligejer.dk: The seller’s insurance contribution (in Danish)

Respond when property information changes

New information can emerge after the reports, including damage, an investigation or a repair. Pass it to the agent and adviser and establish who contacts the report issuer and insurer. A change is easier to manage when everyone uses the same current description of the property.

Ask whether it affects the quotation, terms or proposed signing date. Do not interpret an insurance exclusion for the buyer yourself. Collect the questions and obtain a written explanation from the appropriate professional. That is a more reliable basis for the sale than passing verbal messages between several people.

Keep a clear trail from quotation to payment

After the agreement, retain the final reports, insurance offer, contribution statement and evidence supporting settlement alongside the purchase agreement. If an adviser manages the payment, ask which document supports the entry and how its amount was established.

Check that the contribution has not been paid both directly and through the settlement statement. Investigate any difference between the budget and final amount before approving it. An organised file is also useful if either party later needs to establish which information was available when the transaction took place.

• Keep the current reports and quotation together.
• Have your adviser check delivery and scheme conditions.
• Include the actual contribution in your budget.
• Match settlement against documents and earlier payments.