The Supreme Court rules that clauses in real estate purchase and sale agreements specifying that home buyers are to pay the municipal capital gain tax are unfair

1 June 2012

The Supreme Court thus concludes that a clause included in a sale agreement specifying that the buyers are liable for payment of the tax is null and void. The reasoning behind the decision is that it is a clause that is not negotiated individually and is imposed upon the buyers under the formula of “take it or leave it”, with the aggravating circumstance of the seller’s failure to disclose the tax obligations to the buyer.

For their part, consumer legislation in force as of the agreement’s date, (General Law for Consumer Defense) ruled that this type of stipulation was null and void as it places the buyer at a disadvantage since the buyer would be held liable for an economic charge without any return for services rendered, which would create an imbalance in the rights and obligations resulting from the agreement.

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