EXPERT EXPLAINS
Many buyers of cooperative apartments find themselves navigating a highly competitive housing market where it can be tempting to accept terms they would not normally agree to. One question that arises frequently is whether a seller can require the buyer to purchase furniture, curtains, appliances, or other chattels as part of the transaction, and whether the buyer can later withdraw from that part of the agreement.
The answer is more nuanced than many people realize.
The Danish Cooperative Housing Act prohibits forced purchases of chattels
Andelsboligloven (The Danish Cooperative Housing Act) prohibits making the transfer of a cooperative apartment conditional upon the buyer entering another transaction, such as the purchase of furniture, fixtures, or other chattels. The only exception applies to fixtures and fittings that are specially adapted to or installed in the property, such as built-in household appliances.
The purpose of this rule is to prevent circumvention of the maximum price regulations. If a seller can require payment for overpriced chattels, part of the purchase price can effectively be moved outside the rules that limit the price of a cooperative apartment.
Is there a statutory right of withdrawal?
There is no specific provision in the Danish Cooperative Housing Act that grants buyers a general statutory right of withdrawal in relation to the purchase of chattels.
However, the issue was discussed by the working group that examined under-the-table payments in cooperative housing transactions in 2018. The group considered whether buyers should be given an explicit right to withdraw from purchases of chattels where the purchase had taken place in violation of the Act.
The proposal was not recommended. The majority considered it difficult to justify a special right of withdrawal for an agreement that is already unlawful if the purchase of the apartment is made conditional upon the purchase of the chattels.
Can the buyer withdraw anyway?
Although there is no separate statutory right of withdrawal, there is support for the view that buyers may reject or withdraw from forced purchases of chattels.
Erhvervsstyrelsens (The Danish Business Authority’s) guidance for buyers of cooperative apartments states:
“If the seller requires you to purchase chattels as part of the transaction, you may, after signing the transfer agreement and up until the date of possession, withdraw from that part of the transaction concerning the chattels without simultaneously withdrawing from the purchase of the cooperative apartment.”
This means that a buyer who agreed to purchase chattels to secure the opportunity to buy the cooperative apartment is not necessarily bound by that part of the agreement until the date of possession.
What does this mean in practice?
If the purchase of chattels is genuinely voluntary and the agreed price reflects their actual value, the buyer will generally be bound by the agreement.
The situation may be different if the buyer can demonstrate that purchasing the chattels was a condition for being allowed to buy the cooperative apartment. In such cases, questions may arise as to whether the agreement was entered into in violation of the Danish Cooperative Housing Act and whether the buyer may have claims against the seller.
However, there is no clear statutory rule that automatically allows a buyer to cancel the purchase of chattels while maintaining the purchase of the cooperative apartment. The assessment will therefore often depend on the specific circumstances of the case.
The debate remains relevant
There is currently increased focus on whether buyers of cooperative apartments should be able to withdraw from agreements involving the purchase of chattels when such purchases have, in practice, been a prerequisite for obtaining the property.
The debate is not new. The same issues were identified as early as 2018 and continue to concern how buyers can be protected from paying more than permitted by law and how hidden overpayments disguised as payments for chattels can be prevented.
The current attention is therefore less a sign of a new problem and more an indication that a well-known issue has yet to find its final solution.
At CEJ, we take this issue seriously
At CEJ, we have focused on the issue of purchasing chattels in connection with cooperative apartment transactions for many years. Experience shows that some buyers may feel pressured to accept the purchase of furniture or other inventory to acquire an attractive cooperative apartment.
For this reason, we actively work to ensure that both buyers and sellers are aware of the rules and that any agreements concerning chattels are handled openly and transparently as part of the transfer process. Our goal is to ensure that transactions comply with the Danish Cooperative Housing Act and that no buyer feels obliged to pay for chattels they do not wish to acquire.
CEJ’s transfer agreements therefore contain provisions clarifying that the buyer is not obliged to enter into an agreement to purchase chattels and that the buyer may reject or withdraw from a chattel purchase before the date of possession.