A seller can suffer considerable damage if a buyer dissolves the purchase contract. Termination is not always possible and not always valid. What are the pitfalls for buyers when invoking a financing reservation, and what can a seller do to claim damages if the sale is canceled incorrectly?

Legal structure of a home purchase contract

Model contracts are usually used when purchasing houses and apartments, for example the model of the Dutch Association of Real Estate Agents (NVM) or a standard contract from the notary. These contracts often (but not always) contain a so-called financing condition. A financing reservation means that the buyer can still cancel (dissolve) the purchase if he does not receive a mortgage proposal within a period agreed in the contract. The buyer must do his best to obtain the mortgage loan. It often happens that a seller does not accept the termination. Then he can litigate about the damage .

Should the buyer dissolve the agreement?

If the seller is confronted with a buyer who has signed the purchase agreement, while the buyer wants to get out of the agreement, the seller can engage a lawyer. The lawyer will always first check whether the buyer has a valid reason to dissolve the purchase contract. Several questions arise, such as: is a financing condition or is another clause included in the purchase contract, which provision gives the buyer the right to cancel the agreement? If so, what conditions apply to this provision according to the text of the agreement itself and what requirements does the case law impose? Was the clause invoked on time or did the buyer do so too late? In the latter case, the purchase can no longer be undone. As mentioned, it is also possible that the buyer has signed the purchase contract without reservation. This phenomenon – whereby the buyer takes a high risk if he does not yet have a mortgage – occurs in an overstrained housing market, as is currently the case in the large cities.

Valid cancellation by the buyer

In the analysis of the case, it is possible that the seller himself – or his lawyer – concludes that the buyer had the right to cancel the purchase if he could not obtain financing, that the buyer made a reasonable effort to get the loan out. at the mortgage bank, and that the dissolution was invoked in time when it failed. In that case, the seller has little choice but to offer the house for sale again to another party, and a lawyer will have little to offer the seller in this state of affairs. After all, this is what the financing reservation was intended for: protection of the buyer in the event that financing is not successful. There are cases in which the seller must therefore be satisfied with the dissolution. But it also happens that the buyer wants to dissolve, but does not succeed in doing so, because there are quite a few snags.

Termination is (possibly) not valid

For example, there are instances where the buyer has attempted to invoke the financing offer, but has failed to do so in a timely or appropriate manner. With regard to the term: financing reservations are linked to terms, and a dissolution that the seller (or his representative under the agreement, such as the notary) has not reached in time is invalid. A variant is that the declaration of termination itself was issued on time, but that there is nevertheless doubt about its validity, for example because the buyer did not make a serious attempt to obtain a mortgage while he was obliged to do so. What is the legal consequence if the dissolution is invalid or too late? The buyer is then committed to the agreement, even if he cannot finance. The seller then has several options that I discuss below, but first more about the dissolution, where a lot can go wrong.

Reception theory

Anyone who has an interest in achieving an important legal consequence, such as a buyer of a house who wants to cancel a contract, will not only have to ensure that the communication is sent on time – within the agreed term – but also that it is sent within the agreed period. agreed period has reached the seller (or, if provided for in the contract, his representative or the notary). This is the result of the so-called reception theory that is contained in art. 3:37 Dutch Civil Code has been recorded. The receipt theory is the reason lawyers still use an old-fashioned device: the fax machine. The reason for this is that a fax receipt is accepted in case law as proof that the recipient has received the communication (Supreme Court 20 March 1998, NJ 1998/548).

Cancellation statement by email?

The receipt theory can make or break a case of whether a communication has reached a party. Our office has dealt with a case in which the cancellation statement was not sent by fax, nor by (registered) letter, but by email. In this case, incidentally, it was not the buyer who invoked the dissolution, but the seller’s mortgage bank (who first wanted to sell, but had changed his mind). Our office litigated for the buyer who wanted to force the seller and his bank to continue the sale, and the judge granted the claim because the bank or seller could not prove that the cancellation notice, which had been sent by e-mail, had arrived at the seller. Buyers who want to cancel will therefore have to be careful with emails. This may be different if the seller has received the email, which may be apparent from a reply: then the receipt theory is met, because the addressee has indicated that he has received the message.

Form requirements

But then it is still a matter of watch out for emails. Real estate sales contracts can also stipulate that dissolution is only valid if use is made of – for example – a registered letter or a bailiff’s writ. An email, however modern and commonly used, is something else. The buyer takes a risk if he has signed for such a regulation and nevertheless tries to cancel by email. It is possible that the seller is not satisfied with the form in which the statement was issued and that he will litigate, while the substantive communication in question has reached the seller in itself. What will the judge do then? Is it about form or about content?


Procedural requirements such as the requirement that an important notification be made by registered letter or by bailiff’s writ occur in all kinds of agreements. There is certainly a “de-formalization tendency” in case law, or a tendency on the part of judges not to attach too much importance to these kinds of formal requirements if it is beyond doubt that the communication in question has reached the other party. For example, in a judgment of 25 June 2015 (in Dutch) in a case about the lease of industrial space, the subdistrict court judge of Noord-Holland considered termination by ordinary letter to be valid, while that was not the prescribed form. In a case about a rented house , the subdistrict court judge of Rotterdam found in a judgment of 25 April 2014 that termination by email should be possible “in the current time”, even if the lease prescribes otherwise. You could say that in many current model contracts higher requirements are imposed on a notification than the judge, who is mainly interested in the answer to the question of whether the notification has arrived: if that is beyond doubt, then it does not matter what the agreement is. on the form of the communication.

Also in real estate sales contracts?

Does this development mean that a declaration of dissolution regarding an owner-occupied home no longer necessarily has to be issued by registered letter or bailiff’s writ in order to be valid, although this requirement is included in the purchase contract? An indication that judges have also started to set less stringent requirements when it comes to purchasing a home can be read in a judgment of 24 September 2013 of the Overijssel District Court. The sale was canceled by letter, but the seller made no point of it, and the court commends that: “Rightly has[gedaagde] it has not been made the point that the notice of termination was not issued by registered letter or fax, because it is established that the notice of termination has reached [V] in time.” Incidentally, the buyer’s appeal to the resolutive condition failed for another reason and he had to pay a fine. It seems that judges also pay particular attention to the question of whether the notice of termination has arrived in purchase contracts for houses and apartments. Nevertheless: if you are the buyer and you want to cancel, do not take any risks and follow the rules of the purchase contract, if only because if you cancel by regular letter or email you could run into problems in the procedure to prove that the notification is received in a timely manner from the seller. Proof of receipt of an email is sometimes very difficult to provide. Are you the seller and did you receive the cancellation statement on time? In that case, a claim for damages seems less likely if the court deals informally with the procedural requirement, but it cannot be ruled out that the court does hold the buyer to the letter of the contract.

What requirements must the dissolution meet in terms of content?

Now that we have discussed the need for timely dissolution and the need to be able to prove that it is received by the seller, the question arises as to what additional requirements should be met by the buyer’s invocation of a financing reservation. To do this, it is necessary to look at the text of the clause itself (which may differ from case to case) and to take into account requirements developed in case law. It makes sense that the buyer should make a serious effort to get a mortgage. The case law requires, among other things, that at least two rejections from mortgage lenders be submitted. The buyer who arrives with less has little chance. Sometimes the contract requires that the mortgage application and rejection be “documented”: then the buyer must demonstrate that he “went through the mill” with the mortgage bank and that it was nevertheless unsuccessful. It sometimes happens that the buyer thinks too lightly about the financing application and that his mortgage application is not processed. That could be at his risk in the lawsuit. It is therefore wise for buyers to think about their chance of a mortgage before they sign a purchase contract with a financing condition. Especially buyers with a negative BKR registration should be careful.

No valid dissolution of the purchase agreement?

We have seen above that although a buyer can release himself from the obligations of the purchase contract by canceling the agreement, not every cancellation statement has effect. The rescission may be late or never arrive at all, communicated in the wrong way and finally, the rescission may not be valid because the buyer did not try hard enough to obtain a mortgage, because the sale was concluded against his better judgement. or because the conditions under which the financing reservation can be invoked are not met for any other reason. Now what are the options for the seller who believes that one of these cases is occurring? This seller has suffered damage because the sale does not go through. The house will have to be sold again and valuable time will be lost. Perhaps another buyer will pay a lower price. Furthermore, the fact that the sale does not go through can cause problems because the seller himself moves to another house, so that he needs the equity for the new purchase. The failure of a sale transaction can in theory work like an oil slick, if the seller is also a buyer: other parties are then dragged along. How can the seller be reimbursed for his damage?

Standard 10% fine

The vast majority of real estate purchase agreements in the Netherlands contain a penalty clause of 10% of the purchase price. Suppose a house has been sold for € 200,000 and the buyer does not comply, while there is also no valid dissolution, then the seller can establish that there is a breach of contract. In this situation the involvement of a lawyer is desirable. The lawyer will first give a very last chance by setting a term and then dissolve the contract on behalf of the seller. The buyer then owes a 10% penalty, simply because it is stated so in the contract. The advantage of this penalty clause is that no discussion is necessary about the actual amount of the damage suffered. In this example, the seller is entitled to the fine, ie €20,000. The fine is usually collected through summary proceedings , a quick procedure, so that the seller knows where he stands within a few weeks.

Actual damage is higher?

There are situations in which the seller suffers a loss that is higher than 10% of the purchase price. For example, if he himself gets into trouble with a purchase for which he needed the sales proceeds, or if he is forced to significantly lower the asking price. In such cases it is usually possible to litigate about the actual amount of the damage. In cases involving compensation, the exact amount of the damage suffered must be proven. That is an important difference with the 10% fine, in which the actual amount of the damage plays no role. The reason that the 10% fine is chosen in model contracts is that the procedure is simplified in the sense that there is no need to debate the amount of damage. Incidentally, judges are allowed to moderate a contractual fine, and this is also requested by buyers who are involved in legal proceedings, but judges are reluctant to do so, probably because the 10% fine is common in purchase contracts and would lose effect.

Fulfillment instead of dissolution?

A seller also has an alternative. He does not have to opt for dissolution and the 10% fine. If there are logical reasons for this, the seller can also choose to file a claim to fulfill the purchase agreement. Of course, that only makes sense if the buyer has enough money to pay. This type of claim is not likely to be brought against a private buyer in need of a mortgage. It is different with a wealthy private individual or a professional company as buyer. These parties probably do not need a mortgage and have enough money of their own to allow the sale to go through. In situations like this, the seller will have to make a strategic choice with his lawyer. The claim for performance of a purchase agreement concerning real estate is often combined with a prejudgment attachment on the buyer’s bank account. In this way, the seller secures the purchase price. From a legal-technical point of view, it is even possible to enforce the sale if the buyer has been convicted by the court and is still not willing to come voluntarily to the notary to sign the deed of delivery. This arrangement is stated in Article 3:300 of the Dutch Civil Code. This form of enforced cooperation can not only be used to force a normal sale transaction, but can also be used to divide real estate if a party does not cooperate (in the event of a divorce, an inheritance or a joint investment property, read more here ).


The financing condition is a useful contract clause to protect buyers if they cannot complete the mortgage for a home purchase. But there are cases where this provision is not in the purchase contract. This is common at the moment because sellers can make demands in an overstrained housing market. Moreover, for various reasons, the cancellation of the sale sometimes goes wrong. The dissolution may be late or invalid because the buyer has not made good efforts to complete the mortgage. The buyer then has the choice between dissolution of the purchase and fulfillment. Compliance is rare and only makes sense if the buyer has money. Dissolution is much more common. The seller is then entitled to a cancellation penalty equal to 10% of the purchase price. This is usually claimed through summary proceedings. In exceptional cases, the damage is higher and a procedure is also possible, in which the seller must prove the amount of his damage.

Published by Marius Hupkes