1. Introduction

It is only at the time of takeover that the contractor is obliged to deliver the subject of the contract in accordance with the agreed requirements, and within the agreed final deadline.

We return in more detail to the effects of the contract work being handed over, but mention that the standard contracts have their own provisions on this, cf NS 8405 paragraph 32.6, NS 8406 paragraph 24.4 and NS 8407 paragraph 37.4.

The time of takeover is also the start of the deadline for, for example, the absolute deadline for complaints of five years and for when claims are obsolete after three years, cf. the Statute of Limitations Act of 18.5.1979 No. 18, Section 3 (2).

2. Overview of the rules

Below we have taken a matrix showing the individual topics.

As can be seen from the matrix, provisions on the same subjects are included in all three standard contracts. This is not accidental since the takeover represents a largely central and important part of the entire contract execution between the parties.

We start from NS 8407 since it is this contract standard that is used most often today, but refer to NS 8405 and NS 8406 where this is natural.

3. Takeover business

It follows from NS 8407 paragraph 37.1 that both parties have an obligation to meet at the takeover business.

If one party fails without a valid reason for absence, the other may carry out the business.

In other words, it is not possible to prevent a takeover by abstaining.

If a party is prevented from participating, he must notify of his absence “without undue residence” and at the same time give an account showing that he has “factual reason” to require that the takeover business must be postponed.

At the commencement of the takeover business, the contractor shall present the list of unperformed works and recorded deficiencies from his own final inspection. In that list, the contractor will normally have signed off what has been completed and/ or remedied after the list was transmitted to the builder together with the notice of takeover business, cf. NS 8407 paragraph 36.3.

In NS 8407, paragraph 37.1, last paragraph, it is stated that the developer is expected to have checked the test and FDV documentation received three weeks prior to the commencement of the takeover business.

From NS 8407 paragraph 37.1, first paragraph, it is stated that the takeover shall take place “aggregated for the entire subject matter of the contract unless partial takeover has taken place”.

Moreover, the last paragraph of NS 8407, paragraph 37.1 states that the parties shall: “jointly carry out a proper examination of the subject-matter of the contract”.

That the fear is “diligent” are of course related to other provisions of NS 8407. Among other things, NS 8407 paragraph 42.2.1 states that the builder loses his right to complain about defects made by the builder “have or should have discovered” on the takeover business or “at the control of” the test and FDV documents.

In conclusion, the same rules apply substantially also in NS 8405 paragraph 32.3 and NS 8406 paragraph 24.1. Regarding the rules on the loss of the right of complaint if one does not take sufficient care during the takeover business, we refer to NS 8405 paragraph 36.6 and NS 8406 paragraph 27.5.

4. Protocol

The parties shall always keep a record of the takeover transaction, cf. NS 8407 paragraph 37.2, NS 8405 paragraph 32.4 and NS 8406 paragraph 24.2.

In all the provisions there is a fairly detailed description of what information should be included in the protocols, and it is rare for us to see errors made in them.

However, we clarify that deficiencies invoked by the builder must be entered into the protocol, as should the contractor's objections if he disagrees. Often, the parties will have agreed on the length of the contractor's remediation deadline already at the conclusion of the contract and whether this deadline should be covered by a day's notice.

If a deadline for rectification has not already been agreed, this should be agreed at the takeover hearing and entered in the protocol. The same applies to the timing of any aftercare.

By the way, we refer to the relevant provision of the three standard contracts.

5. The right of the builder to refuse takeover

All three standard contracts have a provision on the builder's right to refuse takeover, and in NS 8407 there is clause 37.3.

For all practical purposes, there are the same assessment themes in the three standard contracts and we do not problematize any disparities here.

The ideal starting point is that all works should be completed and the subject of the contract without defects and defects at the time of takeover, but this is not the case, as a rule.

Regardless of the goals of a contractor to deliver without errors, or the builder's expectations, works will remain or deficiencies will occur.

However, there is a limit to what must be accepted and the standard contracts contain a provision on when a builder can refuse to take over.

The provisions of NS 8407 are slightly differently worded than the provisions of NS 8405 and NS 8406, but the legal content of these is reasonably similar.

What is the subject of consideration is whether the defects, or a rectification of them, are of such a nature that the builder cannot avail himself of the contract object for the intended purpose, or not.

If the contract object can be used as intended, and the defects can be remedied without preventing that use, then the builder must take over.

If, on the other hand, the situation is that the contract object cannot be used at all, or only to a very limited extent, then it is obvious that the builder can refuse to take over.

There will of course be grey areas between these two extremes and we recommend that the parties seek expert assistance if the question of a takeover or a takeover presents doubts and challenges.

Note, moreover, that deficiencies in test and FDV documentation may also give the builder grounds for refusing to take over. As for physical defects, there is not any deficiency in this documentation that can justify not taking over. In NS 8405 paragraph 32.5 a materiality claim is entered and in NS 8407 paragraph 37.3, third paragraph it states that a takeover cannot be denied if “the shortage has little bearing on” the FDV function, and “the documentation is also not necessary for the builder to be able to assess whether the requirements of the contract have been met”.

Finally, it is mentioned that the builder is not obliged to take over before the agreed deadline.

We leave it at that and urge the parties to seek expert assistance if in doubt.

6. Partial takeover

It follows from NS 8407 paragraph 32.7, NS 8405 paragraph 32.7 and NS 8406 paragraph 24.5 that the builder may subcontract when this is specifically agreed.

It also follows from all three provisions that the builder may require to take over parts of the works on the takeover business even if not all works have been completed. The condition is that the builder must discuss this with the contractor first, and it should not be a particularly difficult dialogue to bring with the contractor.

The point is that a partial takeover of what is finished (enough) to be put into use is far more rational and justifiable for both parties (normally) than if the builder were to refuse to take over the entire subject of the contract (assuming that would have been a rightful option).

The consequence of such a partial takeover would be that any daily allowance for the proportionate value of the entire contract object represented by the acquired party ceases to run. In addition, the entrepreneur receives the right to submit a claim for final settlement for what has been taken over. Further, the complaint deadline will begin to run.

The only duty that continues for the contractor is to keep the entire subject of the contract insured until everything is taken over, cf NS 8407 paragraph 37.5 last paragraph letter a.

These rules also follow from NS 8405 paragraph 32.7 and NS 8406 paragraph 24.5.

However, such a partial takeover may present practical challenges for the contractor. For example, it is conceivable that he will face greater challenges in terms of accessibility to those parts of the contract subject that have not yet been finalized.

For that reason, the contractor has the right to demand an extension of the deadline and an adjustment of remuneration for the inconvenience caused by such a partial takeover. In this case, he must notify in accordance with the general notification rules.

We refer, in this regard, to NS 8407, paragraph 37.5, the second paragraph, which refers to the provisions on the extension of the deadline in paragraph 33 and the adjustment of remuneration in paragraph 34, respectively. Further, we refer to NS 8405 paragraph 32.7, second paragraph which refers to the corresponding provisions of Chapter IV of this Standard. In NS 8406 paragraph 24.5, second paragraph, reference is made to paragraph 19 of this standard.

In our view, such a partial takeover will most often benefit both parties, but do not disregard the fact that the parties will completely disagree as to whether the builder has the right at all to refuse the takeover of everything in such a situation. It should therefore be borne in mind that a partial takeover in such a situation may complicate the parties' dealings.

Our advice is that expert assistance is sought and a thorough assessment is carried out, preferably with your own agreement, on the consequences of a possible partial takeover by the developer.

7. Effects of Takeover

All three standard provisions have an exhaustive list of the effects of taking over the subject-matter of the contract. We refer to NS 8407 point 37.4, NS 8405 point and NS 8406 point 24.4. 32.6.