Regulatory Alerts2009-11-16
Disclosure of Housing Under Construction to Consumers - Splitting of Real Estate Transactions - Plot Purchase Agreements and Construction Contracts
The Norwegian Financial Supervisory Authority (Finanstilsynet) issues this circular to regulate the practice of splitting real estate transactions into separate plot sales and construction contracts to prevent the circumvention of consumer protection laws. The authority mandates that such splits are generally viewed as pro forma arrangements subject to the Housing Construction Act, and prohibits estate agents from facilitating construction contract transactions that fall outside the scope of the Estate Agency Act to avoid creating false security for buyers. Agents must provide clear written disclosures regarding risks, liability limitations, and payment structures, particularly when marketing plots with construction clauses under the Sale of Goods Act.