Vady díla v developerských projektech
Did you buy a new build and it is not flawless? When an unfinished detail becomes a legal problem
From a legal perspective, so-called unfinished work (snags) is also considered a defect – i.e., parts of the work that the developer did not perform at all, in breach of the contract. Similarly, the developer is liable for defects caused by poor quality materials, even if you supplied the materials yourself, unless they warned you of their unsuitability in advance.
It is important to realize that even successful final approval (occupancy permit) does not mean the building is free of defects. The occupancy permit only confirms that the building meets public law regulations for use, but does not address your private law claims arising from the contract.
The entire process revolves around the key legal concept of defective performance. This is a situation where the delivered work (building) does not correspond to what was agreed, and it is this very fact that establishes your right to seek remedy. This shows that the best protection against future disputes is a precisely drafted contract. Vague formulations such as "standard equipment" play into the developer's hands.
Our Czech legal team at ARROWS specializes in the preparation and review of contracts for work and will ensure that your contract contains clear specifications that will reliably protect you in the event of a dispute.
Obvious or hidden? Why correct defect identification and timing are key to your claims
The law distinguishes between two basic types of defects: obvious (patent) and hidden (latent). Obvious defects are those that you can and should detect with ordinary diligence when taking over the building – for example, scratched window frames or cracks on visible walls. Hidden defects, on the other hand, only appear after some time of use, typically roof leaks, insufficient sound insulation, or problems with internal wiring and piping.
The moment of handover is absolutely critical. Developers often present handover protocols for signature with a pre-printed phrase stating that you accept the work "without reservations". By signing such a protocol without explicitly listing all obvious defects, you may lose the right to claim them later. It is therefore essential to cross out this phrase and record all deficiencies carefully and in detail in the protocol.
For hidden defects in buildings, the law protects you for five years from the handover of the work. As soon as you discover such a defect, you must notify the developer "without undue delay". Furthermore, under Czech legislation, if a defect appears within the first two years of handover, it is presumed to have existed at the time of delivery, and it is up to the developer to prove otherwise.
This complex system of deadlines and obligations represents a minefield for a layperson, where a single mistake, such as late notification or a verbal agreement on remedy, can lead to the loss of your rights.
Lawyers from ARROWS will provide you with legal consultation and can even represent you directly during the handover of the work to ensure that your rights remain fully preserved.
Table of Risks: Handover and Identification of Defects in the Work
Possible problems | How ARROWS helps (consultation@arws.cz) |
|---|---|
Signing the handover protocol with the phrase "without reservations" under pressure from the developer. Consequence: Loss of the right to claim obvious defects. | Legal representation during handover of the work: We will ensure that the protocol accurately reflects the actual state and protects your rights. We will prepare a template handover protocol for you. |
Insufficient description of defects in the protocol (e.g., "scratches on windows" instead of precise specification). Consequence: Dispute over the scope and existence of the defect. | Preparation of precise documentation: We will help you describe the defects accurately and unquestionably, including photo documentation, so that the developer cannot dispute the claim. |
Delayed notification of a hidden defect (failure to meet the "without undue delay" deadline). Consequence: Statute of limitations expires, loss of the right to compensation. | Legal consultation and setting up internal processes: We will train your team on how to react correctly and on time, and prepare a template defect notification that ensures compliance with deadlines. |
The developer refuses to acknowledge the defect, referring to the successful final approval. Consequence: Unnecessary delays and uncertainty. | Drafting a legal opinion: We will prepare an argumentatively strong opinion explaining that the final approval does not relieve the developer of liability for defects, and we will represent you in negotiations. |
Uncertainty whether it is a defect, or normal wear and tear in an older new build. Consequence: Unsuccessful and costly claim. | Case analysis and securing an expert opinion: We will assess the nature of the deficiency and connect you with verified experts whose opinion will be a solid basis for your claim. |
Defects caused by a subcontractor, for which the developer disclaims liability. Consequence: Complicated enforcement of the claim. | Analysis of contractual relationships and direct assertion of claims: We will identify all liable entities (including subcontractors and designers) and assert claims directly against them under Section 2630 of the Civil Code. |
The developer does not respond to the claim within the statutory 30-day period. Consequence: Uncertainty regarding the next steps and potential loss of rights. | Representation in administrative and court proceedings: We will immediately take over communication, ensure compliance with deadlines, and, in the event of developer inactivity, initiate steps to enforce your rights. |
What rights do you have when the developer errs? From repair to price reduction
Your rights vary depending on the severity of the defect. The law distinguishes between a material and a non-material breach of contract. A material breach is one where, had you known about it in advance, you would not have entered into the contract at all. Typically, these are defects that prevent the safe use of the building, such as the use of toxic materials or serious structural defects.
In the event of a material breach of contract, you have three options to choose from: you can demand the removal of the defect (by repair), a reasonable reduction in the purchase price, or you can withdraw from the contract entirely and demand a refund. In the case of a non-material breach (e.g., minor aesthetic defects), the choice is more limited – you can request either the removal of the defect or a reasonable reduction in the price.
Choosing the right claim is a strategic business decision. Repair may seem like a logical choice, but it means relying on a developer who has already failed once, which can lead to further delays. Withdrawing from the contract is extreme and often disrupts your business plans.
A reduction in the purchase price, on the other hand, represents quick financial compensation, giving you capital and control over how and by whom the defect will be repaired. The attorneys at ARROWS will help you analyze both the legal and business impacts of each option and, in the form of a legal opinion, recommend the course of action that best protects your investment.
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How to correctly claim a purchase price reduction? A process that protects you from losses
If you decide on a price reduction, it is necessary to follow a formal procedure. The first step is always a written and provable notification of the defect (so-called defect notification) to the developer, ideally by registered mail with advice of delivery. Along with the notification, or immediately after it, you must inform the developer of which claim you are asserting – i.e., that you are demanding a reduction in the purchase price.
The key to success is a strong evidentiary position. The most important evidence is an expert opinion from a court-appointed expert in the field of construction. This document will professionally describe the defect, determine its cause, and quantify either the cost of repair or the reduction in the market value of the property.
In the event of a successful claim, the developer is obliged to cover the costs of the expert opinion. If the developer does not respond to your claim within the statutory 30-day period, your right to a price reduction arises automatically.
In practice, the developer initially has an informational and power advantage. They have all the documentation and their own legal team at their disposal. A professionally managed claims process balances this asymmetry. A legally flawless claim backed by an expert opinion, prepared and submitted on your behalf by the ARROWS law firm, turns your complaint into a real legal threat that the developer cannot ignore.
Asserting a claim for a price reduction
Possible problems | How ARROWS helps (consultation@arws.cz) |
|---|---|
Incorrectly formulated defect notification or choice of claim. Consequence: Invalidity of the assertion of the right, necessity to repeat the process, risk of missing deadlines. | Preparation of complete legal documentation: We will draft and submit a legally flawless defect notification on your behalf, including the correct choice of claim, thereby ensuring the validity of the entire action. |
Insufficient evidence of the existence and scope of the defect. Consequence: The developer will reject the claim as unproven. | Securing and coordinating expert assessment: We cooperate with top experts and will ensure the preparation of an opinion that will serve as bulletproof evidence in court. |
Incorrectly calculated amount of the price reduction (e.g., only the cost of repair). Consequence: You will receive lower compensation than you are entitled to. | Legal opinion on the amount of the price reduction: Based on current case law, we will quantify a reasonable reduction that takes into account not only the repair but also the reduction in value and other factors. |
The developer uses obstruction tactics and delays resolving the claim. Consequence: Delays, rising costs, and uncertainty. | Representation in negotiations and litigation: We will take over all communication, set clear deadlines, and, in the event of inactivity, file a lawsuit in court to protect your investment. |
The client carries out the repair at their own expense before asserting the claim. Consequence: Loss of the right to reimbursement of costs unless agreed otherwise. | Strategic legal advice: We will advise you on the correct procedure – first assert the claim and only then, under clearly defined conditions, carry out the repair, so that your rights remain preserved. |
Dispute over whether the contractual agreement on determining the price reduction by an expert is valid. Consequence: Legal uncertainty and questioning of the entire mechanism. | Review and preparation of contracts with advanced clauses: We will design and negotiate contractual dispute resolution mechanisms that comply with case law and minimize future risks. |
Problem with enforcing the claim if the developer liquidates the s.r.o. Consequence: Loss of the entire investment in the remedy. | Analysis of asset structure and directors' liability: We will examine the possibilities of directors' liability and, through timely and swift action, secure your claim before any potential liquidation of the company. |
How much is a "reasonable price reduction"? More than just repair costs
The Civil Code deliberately does not establish an exact formula for calculating the price reduction, leaving its determination to the individual assessment of the court. While in the past the amount of the reduction was often derived from the cost of repair, the current case law of the Supreme Court is much more favorable to buyers. Today, the goal of the price reduction is not just to pay for the repair, but to restore the disrupted equivalence of performance.
This principle means that the price reduction is intended to balance the difference between the value you paid in expectation of a flawless property and the actual value of the property with defects. Thus, courts today take into account a wide range of factors: not only the cost of repair, but also the reduction in functional and aesthetic qualities, the impact of the defect on the comfort of use, the reduction in the overall lifespan of the building, and the decline in its market value.
Determining a reasonable price reduction has thus shifted from a simple accounting calculation to complex legal argumentation. Our Prague-based attorneys at ARROWS have extensive experience with this issue and, thanks to their deep knowledge of current case law, can build an argument that will stand up in court and maximize your financial compensation.
Our specialists will help you
Are you dealing with a development project with an international element?
If your project involves an international element – whether it is a foreign investor, developer, material supplier, or the building is located outside the Czech Republic – the complexity of the entire case grows exponentially.
A common dispute over a defect can easily turn into a complicated legal battle over which country's law will govern the dispute, which court will have jurisdiction to decide, and how any decision will be enforced abroad.
In these situations, the value of our international network is fully demonstrated. Thanks to the ARROWS International network, built over ten years, we handle cases with an international element practically every day. We can thus offer our clients comprehensive legal services across jurisdictions and ensure effective protection of their interests regardless of borders.
Summary
As this article shows, the successful resolution of defects in work is not just about technical knowledge, but above all about a timely and correctly chosen legal strategy. From a precisely prepared contract, through professional assistance during the handover of the work, to the uncompromising enforcement of your claims in court.
Our experience from long-term cooperation with more than 150 joint-stock companies, 250 limited liability companies, and 51 municipalities and regions gives us a unique insight into construction law issues from the perspective of all parties involved. We pride ourselves on speed and the high quality of our services.
At ARROWS, we offer you not only top-tier legal services, such as the preparation and review of contracts, representation in court, drafting of legal opinions, or professional training for your management, but also added value in the form of connecting you with other clients and interesting business opportunities.
Problems with defects in work can threaten your entire investment. Do not wait for a small unfinished detail to turn into a major legal dispute. Contact us and get advice from experts who protect the interests of developers, investors, and corporations daily. We are ready to assess your situation and propose a strategy that leads to a successful resolution.
About the author
Disclaimer:
The information contained in this article is for general informational purposes only and serves as a basic guide to the issue as of 2026. Although we strive for maximum accuracy, laws and their interpretation evolve over time. We are ARROWS Law Firm, a member of the Czech Bar Association (our supervisory authority), and for the maximum security of our clients, we are insured for professional liability with a limit of CZK 350,000,000. To verify the current wording of the regulations and their application to your specific situation, it is necessary to contact ARROWS Law Firm directly (consultation@arws.cz). We are not liable for any damages arising from the independent use of the information in this article without prior individual legal consultation.