SLOVENIA Law and Practice Contributed by: Blaž Ogorevc, Miha Štravs and Blaž Murko, Odvetniki Šelih & partnerji, o.p., d.o.o.
the characteristics of each individual transac - tion. Nevertheless, representations and warran - ties may include confirmation that: • the parties have authority to enter into the agreement; • there are no title defects; • there are no rights of third persons; • there are no unpaid taxes related to the real estate; • there are no pending litigation, expropriation and restitution proceedings related to the real estate; and • there is no environmental contamination. As a result of the coronavirus pandemic, no sig - nificant additional representation and warranties have developed that would persist in post-pan - demic transactions. Certain seller’s warranties, however, are also provided under statute, in particular in the Obli - gations Code and in the Protection of Buyers of Apartments and Single Occupancy Buildings Act that applies to the purchase of new construc - tions for which the buyer is a consumer and the seller is an investor or intermediate buyer. The seller may be held liable for the following: • visible defects or defects in the property that could not have been detected when the prop - erty was taken over (“hidden defects”), if the hidden defects become apparent within two years of taking over the property; • if a third party has any right in the property sold that excludes, reduces or restricts the buyer’s right (legal defect); and/or • serious defects in the construction of the property, if such defects become apparent within ten years from the date of delivery and acceptance of the property.
Under the Protection of Buyers of Apartments and Single Occupancy Buildings Act, an addi - tional liability of the seller is established, namely for defects in the common parts of the building where the owners of the flats have co-owner - ship. In the event of the seller’s misrepresentation constituting a breach of agreement, the buyer is entitled to demand that the breach of agree - ment is remedied, that the purchase price is proportionally reduced or that the agreement is rescinded. At the same time, the buyer may claim reimbursement of damages. By way of contractual regulation, the parties often set a cap on the maximum amount of compensation for certain breaches (25–50% of the deal value) and agree on de minimis, granting damages only if the claim exceeds a certain amount. As security for these remedies, payment of a certain proportion of the purchase price is sometimes held back or is held in escrow. Although repre - sentation and warranty insurance is available, it is not commonly used. The general statutory expiry period for represen - tations and warranties is six months as of hand - over. Considering that this period is relatively short, it is occasionally contractually prolonged. 2.6 Important Areas of Law for Investors In addition to property law, construction law, spatial planning law and environmental law, the main sources of which were specified in 1.1 Main Sources of Law , investors also ought to consider finance and tax law. Investors seeking to purchase or develop an office building should also monitor whether new legislation on busi - ness leases shall be adopted.
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