Byggfel, a Swedish term, means building or construction defects. It impacts property valuation and insurance claims in Sweden to a large extent. Byggfel can lower the property value, increase the insurance premiums, and also result in disputes related to claim payouts. It is critical to make proper and thorough byggfel assessments to determine the accurate rebuilding costs, insurance coverage, and replacement costs.

Let’s talk more about byggfel and how it impacts Sweden’s insurance claims and property value.

What is Byggfel in Sweden?

In Sweden, the term byggfel refers to defects or faults in a construction project. The defects could also be present in the materials used or the design of the building. Typically, the construction defects include things such as water damage to the building, defective electrical systems, insulation issues, or weak foundation. Byggfel is treated as a regulated problem in Sweden, and comes with insurance clauses, liability rules and warranty periods.

Common Types of Byggfel (Construction Defects) in Sweden

Byggfel is quite a common phenomenon in Sweden. This is particularly due to a surge in demand for new and more housing projects, which generally leads to cutting corners and executing projects in a rush. Common reasons that can lead to construction defects include:

• Lack of quality control
• Use of multiple contractors in a project
• Ineffective construction methods
• Shortage of skilled labor

Generally, the common types of byggfel in Sweden include the following:

• Improper ventilation or insulation can result in mold
• Poor waterproofing or drainage results in water damage
• Structural issues such as load-bearing wall damage or foundation cracks
• Use of non-approved or substandard construction materials
• Cracks in floors, ceilings, or walls
• Misalignment of seams
• Improper or defective installation of plumbing or electrical systems, or HVAC

Now that you understand byggfel and its causes, let’s explore how it affects property valuation and insurance claims in Sweden.

How Byggfel Affects Property Valuation in Sweden

Market conditions and transparency are two important factors determining a property’s value in Sweden. Byggfel (construction defects) largely influence and undermine the buyer’s morale. In addition, it also impacts the price of a property, both when buying and selling it.

The different ways through which byggfel impacts property valuation in Sweden include the following:

• Poor Market Value: In the scenario of byggfel in a property, that property’s overall market value reduces. It is natural for prospective buyers to hesitate when it comes to purchasing a property that has suspected or known defects.

• Decreased Investment Returns: Buildings and properties with confirmed construction defects usually bring reduced investment returns. The rental income tends to be lower as that to properties with no construction defects. Moreover, byggfel also slows the capital appreciation, which influences investment returns.

• High Premiums: Insurance companies generally increase the premiums for residential or commercial properties with byggfel. They check the potential of construction defects in properties and their byggfel history to decide on the insurance premiums.

• Mortgage Lending Issues: Lenders, banks, and other financial institutions are less interested in offering mortgages for commercial or residential properties with construction defects. They may also decrease the property’s estimated value due to byggfel.

• Litigation and Disputes: Byggfel often leads to disputes between the insurer and the insured. In the presence of byggfel, the cost of rebuilding or repairing the property increases, resulting in expensive legal disputes and litigation.

• Decreased Claim Payouts: In case a property, whether commercial or residential, is underinsured, primarily due to byggfel, the insurance claims generally result in very small payouts.
• Co-insurance clauses: Insurance policies, at times come with co-insurance clauses requiring properties to have insurance for a fixed percentage of its overall replacement value. In case the property valuation does not properly consider byggfel, it can lead to underinsurance which leads to low payouts and penalty fees.

To ensure your property is valued correctly, make sure to analyze any potential byggfel it has, or its history of byggfel.

How Byggfel Influences Insurance Claims

Swedish home insurance typically covers any damage caused by byggfel. That said, the scope varies according to the type of insurance policy and the time when the defect was discovered.

Things that Home Insurance Covers in the Case of Byggfel

Home insurance in Sweden covers the damage a property experiences due to byggfel that leads to sudden incidents such as a collapsed roof due to different hidden defects. 

Typically, home insurance covers the following aspects in the case of construction defects:

• Structural collapses due to hidden construction defects
• Emergency repairs due to undetected construction defects
• Damages, including mold, due to poor insulation or leaks

In addition, home insurance also takes care of any indirect damage to the property, including mold due to leaks and faulty insulation. 

Home insurance also covers emergency repairs that result from an undetected byggfel.

Things that Home Insurance Doesn’t Cover in the Case of Byggfel

Typically, Swedish home insurance does not cover any known construction defects that weren’t disclosed when the policy was signed. 

It doesn’t cover the following in the event of byggel:

• Any known byggfel that wasn’t disclosed at the time of the policy signing
• Damage due to improper and ineffective maintenance by the homeowner
• Ageing infrastructure or routine wear and tear
• Defects due to unlicensed or unatuhorized work

The Role of Byggfelsforsakring

A byggfelsforsakring must accompany all the newly constructed homes in Sweden, the construction defects insurance policy. Byggfelsforsakring safeguards homeowners against the defects that can arise during the construction process.

Usually, byggfelsforsakring covers construction repairs for around 10 years from construction, and is required to get a proper building permit. Whenever you buy a newly constructed home or build any new property in Sweden, ensure a valid construction defects insurance policy accompanies it.

How Advantage Law Firm Can Help You

At Advantage Law Firm, we have the legal expertise in handling all sorts of legal matters pertaining to byggfel, insurance claims, and valuation disputes in Sweden.

Our skilled team of expert advokater and jurister is available to guide you with the help of negotiations, legal proceedings, and inspections. Whether you are a homeowner, seller or buyer experiencing byggfel, we are here to protect your rights.

Contact us today.