SLOVENIA Law and Practice Contributed by: Blaž Ogorevc, Miha Štravs and Blaž Murko, Odvetniki Šelih & partnerji, o.p., d.o.o.
the seller 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 the agreement, the buyer is entitled to demand that: • the breach is remedied; • the purchase price is proportionally reduced; or • the agreement is rescinded. At the same time, the buyer may claim reim - bursement 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 or more for title defects, third party rights, etc) 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 representation 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. 2.7 Soil Pollution or Environmental Contamination Under the polluter pays principle, prescribed by the Environmental Protection Act, the person who is responsible for (soil) pollution or con - tamination is responsible for undertaking the measures necessary for the rehabilitation of the environment. Therefore, the buyer who did not cause the pollution or contamination is generally not liable for incidents that occurred while the relevant assets were held by the previous owner. Nonetheless, if environmental damage occurs and, after its occurrence but before its remedia - tion, the polluter disposes of the real estate on which it carried out certain types of environmen - tally burdensome activities, the agreement by which it disposes of the real estate must include a provision to the effect that the person acquir - ing such real estate will also assume the reme - diation; otherwise, the contract is null and void.
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