Latent defects of the property: buyer's rights after moving in

Hidden defects of a property are defects that were not visible during a usual inspection and of which the buyer was not aware nor could have been aware at the time of purchase. When such a defect manifests, the buyer can demand the removal of the defect, delivery of another item, a reduction in price, or termination of the contract, along with compensation for damages. The seller must be demonstrably informed within the statutory period, which for a hidden defect generally amounts to two months from discovery. The cheapest protection is an inspection before signing the pre-contract, and in the case of new construction, in addition to the seller, the contractor and, under prescribed conditions, the designer and the person performing professional supervision are also liable.

A buyer who discovers a hidden defect in a property after moving in, for example, moisture behind a freshly painted wall, a crack covered by furniture during viewing, or installations that only fail under actual load, has legal rights against the seller. These rights do not depend on whether the purchase was made through an agency or directly between the two parties. They depend on whether the defect was hidden at the time of sale and whether the buyer informed the seller in a timely manner.From our experience working with buyers, questions about property defects often arise only after the contract is signed and keys are handed over, when the time for a timely complaint has already begun to run. In this guide, we explain what is legally considered a hidden defect, what rights you have, how to properly inform the seller, and what you can do before signing to prevent a dispute from arising at all. We describe the entire sales process in the guide on how the real estate purchase and sale process in Croatia works step by step.

Contents

• What are hidden property defects and how do they differ from visible ones
• What rights does the buyer have when a defect manifests
• Notification to the seller and deadlines: why time is crucial
• What to do immediately after discovering a defect
• How to reduce risk before signing the contract
• New construction: additional responsibility of the contractor and designer
• How Regent can help you
• Frequently Asked Questions

Key Insights

• A hidden defect is one that was not visible during a usual inspection and of which the buyer was not aware nor could have been aware.
• The seller's liability for hidden defects generally does not depend on whether they were aware of them.
• The buyer can demand the removal of the defect, delivery of another item, a reduction in price, or termination of the contract, along with compensation for damages.
• For a hidden defect, the seller must be informed within two months of discovery, and without delay in commercial contracts.
• The "as-is" clause does not protect a seller who was aware of the defect, and for consumers, it is not binding.
• In new construction, in addition to the seller, the contractor and, under prescribed conditions, the designer and the person performing professional supervision are liable for ten years from the handover and acceptance of the works.

What are hidden property defects and how do they differ from visible ones

A hidden defect is a property defect that the buyer could not have noticed during a usual, careful viewing and of which they were not aware at the time of purchase. This definition determines everything that follows, because the buyer's legal position significantly depends on which of the two groups the defect falls into.A visible defect is one that a usually careful buyer would notice during a normal viewing: a cracked tile, worn parquet, or moisture already visible on the ceiling. The seller generally is not liable for defects that the buyer knew or could have known (Arts. 402 and 403), because it is assumed that the property was accepted in the condition in which it was seen. A hidden defect is different: a crack behind a wardrobe, installations that work until they are under load, or a roof that leaks only during the rainy season.For hidden defects, the seller's liability generally does not depend on whether they deliberately concealed them or truly did not know about them. The relevant law is the Obligations Act (Official Gazette NN 35/05, 41/08, 125/11, 78/15, 29/18, 126/21, 114/22, 156/22, 155/23 and 69/26), which regulates the seller's liability for material defects in Articles 400 to 410. The Act was amended in 2026, so for each contract, it is important to know when it was concluded, more on which below.

Professional advice: Before initiating anything, answer two questions for yourself: could the defect have been noticed during viewing, and did anyone tell you anything about it? The answers to these two questions determine the direction of the entire procedure.

What rights does the buyer have when a defect manifests

A buyer who discovers a hidden defect has several rights at their disposal, but they are not equally enforceable in every case. What is realistic depends on the severity of the defect and whether it can be repaired at all.

• Removal of the defect: if the defect can be repaired, the buyer can demand that the seller remove it at their own expense.
• Delivery of another item without defect: the law also provides for this right, but for real estate, it is specific and rarely achievable in practice.
• Proportional price reduction: proportional to the difference between the value of the property with and without the defect.
• Termination of the contract: the buyer can declare termination under legal conditions, which usually applies to more serious defects.

In addition to the aforementioned rights, the buyer can, according to Article 410, paragraph 2 of the Obligations Act, also claim compensation for damages according to the general rules on liability for damages, for example, the cost of temporary accommodation during the remediation of a serious fault.The amendments to the Obligations Act from 2026 (NN 69/26) generally introduced a sequence: price reduction or termination usually come only after the seller has not removed the defect, refused to remove it, or has not removed it within a reasonable time or without significant inconvenience, unless the defect is serious enough for an immediate reduction or termination.Which of these rights is achievable and whether it is worth pursuing given the cost of the dispute and the value of the defect, is an assessment that an attorney should make before sending any written request to the seller. There is no single answer that applies to every defect and every property.

Professional advice: Before proposing a price reduction to the seller, request an estimate of the remediation cost from an independent craftsman or engineer. The amount you request must have documented support, otherwise negotiations will be reduced to guesswork.

Notification to the seller and deadlines: why time is crucial

The law prescribes different deadlines for visible and hidden defects, and delay generally weakens the buyer's position. For a hidden defect, the buyer must notify the seller within two months of discovering the defect, and without delay in commercial contracts (Art. 404).There is also an ultimate deadline: the seller is generally not liable for defects that manifest after two years from the handover of the item, or after six months in commercial contracts. An exception is important: if the seller was aware of the defect or it could not have remained unknown to them, the buyer does not lose the right due to the missed deadline (Art. 407). After timely notification, rights due to a material defect generally expire two years from the date the notification was sent to the seller (Art. 422), unless the seller fraudulently prevented them from exercising their rights. Due to legal exceptions, do not calculate the deadline in a specific dispute without legal advice.Different rules apply to visible defects (Art. 403). A buyer who is not a consumer must inspect the property as soon as is reasonably possible and report visible defects within eight days, or immediately if the inspection was carried out in the presence of both parties. In commercial contracts, notification must be given without delay. A consumer is not obliged to inspect the item, and must report a visible defect within two months of discovery, at the latest two years from the transfer of risk.The notification is useful only if it can be proven, so send it in writing and in a way that leaves a trace, for example, by registered mail or email with delivery confirmation. In it, describe the defect, when you discovered it, and what you have done so far, and attach photographs. Also, allow the seller the opportunity to inspect the defect, because without this, they could dispute that the defect existed or that it is as you describe it.Pay attention to the start of deadlines: the deadline for notification runs from the discovery of the defect, and the ultimate deadline from the handover of the property, so never count only from moving in and do not wait for the defect to "fix itself".Note: The Obligations Act was amended in 2026 (NN 69/26). Certain amendments, including those in Articles 401, 405, and 410, apply to contracts concluded from July 31, 2026, while earlier rules apply to contracts concluded earlier, in accordance with the transitional provisions of that Act.

Professional advice: As soon as you suspect a hidden defect, immediately photograph it and write down the date. A document created on that day is often more decisive than anything you try to reconstruct later.

What to do immediately after discovering a defect

The most important thing is to act in the first few days in an order that preserves your evidentiary position. The recommended sequence of steps is as follows:

1. Photograph and record the defect before any intervention, with a visible date.
2. Request an expert report from an independent engineer, expert witness, or authorized craftsman who will determine the cause and estimate the cost of remediation.
3. Send a written notification to the seller in a verifiable manner and give them the opportunity to inspect the defect.
4. Do not start remediation before the defect is documented and before the seller is notified, unless there is an urgent danger of greater damage.
5. Contact an attorney to assess the legal position and choose the right to claim.

If the danger of greater damage is urgent, for example, due to water leakage, limit the damage immediately, but document everything you do and keep receipts. Such costs can later be part of a claim for damages.

Professional advice: Save everything you sent to the seller and everything they replied to in one place, with dates. A chronological map of documents often shortens a dispute or makes it unnecessary.