Judge: no fine after renouncing purchase of speculative land

A buyer of speculative agricultural land who feels misled by the seller does not have to pay a penalty for failing to honor the purchase. This has been ruled by the subdistrict court judge of the Central Netherlands District Court. This is the second time in a short period that a judge has ruled in favor of the buyer in such a case.

The buyer purchased speculative agricultural land for almost €65,000. After the notary explicitly pointed out the highly speculative nature of the land, he wanted to cancel the purchase and refused to pay the purchase price. The seller subsequently terminated the purchase extrajudicially and claimed a contractual penalty of 20 percent of the purchase price, approximately €13,000. The buyer refused to pay the penalty and invoked the annulment of the purchase agreement on the grounds of unfair commercial practices. The subdistrict court agreed.

Misleading commercial practice
According to the subdistrict court, this was a highly speculative and risky investment, about which the seller failed to disclose his or her dealings. The seller thus engaged in a misleading commercial practice as defined in Article 6:193c of the Dutch Civil Code. The seller also omitted essential information that the average consumer needs to make an informed decision in the phase preceding the signing of the purchase agreement. According to the subdistrict court, this constitutes a misleading omission as defined in Article 6:193d of the Dutch Civil Code.

Cancellation of purchase agreement
Since the court has concluded that the seller engaged in misleading and therefore unfair commercial practices, it upholds the buyer's request for annulment of the purchase agreement. This means that the seller cannot demand performance and the buyer is not liable for any contractual penalty.

Previous statement
In a previous similar case, the preliminary relief judge of the North Holland District Court ruled that a buyer of speculative agricultural land who felt misled and pressured by the seller does not have to honor the purchase.