Disputes Involving Homeowners' Associations Arising from Contracts for Work Due to Defective Performance: Rights, Obligations, and Practical Solutions

JUDr. Jakub Dohnal, Ph.D., LL.M.
JUDr. Jakub Dohnal, Ph.D., LL.M.
6.5.2026 | ARROWS law firm

Disputes between homeowners’ associations (SVJ) and contractors over defective construction work are common. Although the new Civil Code of 2014 changed the rules for asserting rights arising from defects, practice still faces uncertainties. This article addresses the legal framework, practical issues, time limits, and strategies for resolving these conflicts. For property owners, expert legal guidance is essential.

The illustrative image depicts a lawyer addressing issues relating to disputes between homeowners’ associations and contractors.

Key takeaways

  • Reform of the SVJ’s standing (2014): The new Civil Code shifted the right to assert claims for defects in units relating to the common parts of the building from individual owners primarily to the SVJ, which now represents the affected owners when asserting these rights.
  • Complexity of practical application: Although the law appears to clearly define the SVJ’s role, actual decision-making practice remains inconsistent; there are exceptions for inactive SVJs, defects limited to a single apartment, and cases of withdrawal from the contract, all of which require an individual legal assessment.
  • Critical time limits and protection of rights: Apartment owners must notify defects without undue delay (in practice within a few weeks); for buildings with hidden defects, the owner has five years, but the subjective “without undue delay” time limit may render this right practically unenforceable if the SVJ is inactive.
  • Burden of proof and risks: For consumers, a more favourable regime applies during the first two years after taking over the construction, under which it is presumed that the defect already existed at the time of takeover. After this period, or if the buyer is not a consumer, the burden of proof lies with the buyer, who must prove that the defect arose as a result of the contractor’s breach of duty, and not as a result of normal wear and tear or the buyer’s own fault.

Legal framework for liability for defects in construction works in the Czech Republic

Basic definition of a defect and its legal consequences

A contract for work is one of the four basic types of contracts in civil law and governs the contractor’s obligation (construction company, designer, site manager) to provide the client (property owner, investor, SVJ) with an output in the form of a completed, functional work. 

Under Section 2615(1) of the Civil Code (hereinafter the “Civil Code”), a work is defective if it does not correspond to the agreed contractual terms. This seemingly simple definition, however, conceals considerable complexity.

The work must correspond both to the specific characteristics specified in the purchase agreement and to “usual” characteristics that meet common standards of quality and safety. 

Especially in construction works, compliance with legal regulations is also decisive. The building must be capable of obtaining final approval (occupancy permit) and must comply with construction standards (Czech Technical Standards – ČSN), the Building Act, and other applicable legislation.

In court practice, defects are distinguished based on several criteria. Most commonly, they are divided into apparent defects, i.e., those that the client could have identified already upon acceptance of the work by exercising ordinary care, and hidden defects, which manifest only later, often months or years after handover. 

Typical hidden defects in buildings include: water ingress into structures, moisture and insulation problems, hidden cracks in load-bearing parts of the building, deficiencies in electrical installations, or technical faults in the heating system.

Allocation of liability and the roles of the individual parties

The new Civil Code in Section 2630 introduced an important innovation: liability for defects in a building is borne not only by the contractor, but also—within the scope of their share in the work—by the parties who directly carried out the construction or its parts. 

Specifically, this includes persons who supplied the construction documentation (the designer) and persons who performed site management or technical supervision. Each of these persons is released from liability for a defect if they prove that the cause of the defect was not their act or omission.

In practice, the client may assert defect claims against multiple parties at the same time, for example against the designer, the contractor, or the site manager. If the building is subsiding due to defective design documentation, the client may sue the designer. If the cause is poor workmanship, the client may sue the contractor. If the site manager was inactive and failed to ensure remediation when defects were identified during construction, they may also be liable.

In practice, this means significantly more complex court disputes, where it is necessary to separate which part of the defect results from which cause. The usual tool is an expert opinion, whose task is precisely to make this distinction. However, this leads to longer court proceedings and higher costs.

Reform of the roles of the SVJ and unit owners under the Civil Code

Change effective from 1 January 2014 and its legal reasons

Until 31 December 2013, an owner of an apartment unit could personally assert claims for defects relating to the common parts of the building. Regardless of whether the defect manifested in their apartment or in common areas, each individual could make a claim. Everyone could choose whether to request repair, a price reduction, or withdrawal from the contract.

The SVJ had no active role in these disputes, and individual owners could claim repairs of windows or other common parts separately. The new Civil Code, effective from 1 January 2014, introduced a fundamental change. A unit is now, under Section 1129 of the Civil Code, defined as a whole consisting of the apartment and the owner’s irrevocable share in the common parts of the property.

This means that the common parts of the building are now legally considered an integral part of each unit. Windows in a unit are therefore no longer merely part of the building, but part of the unit itself. Under Section 1196(2) of the Civil Code, the SVJ represents unit owners when asserting rights arising from defects that relate to the units.

This provision is intended to ensure a coordinated approach to asserting defect claims and to prevent situations where individual owners, through differing claims and methods of resolution, would block repairs to the common parts of the building. The intention was to centralise decision-making and ensure a uniform approach.

The Supreme Court has concluded that the SVJ has standing to assert rights arising from defects in the common parts of the building. This activity directly falls within its duty to manage the building and the land. The SVJ acts in its own name, but for the benefit of the affected owners (indirect representation).

If the SVJ succeeds in court and obtains a reduction in the purchase price, it is obliged to subsequently distribute this reduction among those owners whose units were affected by the defects.

Practical consequences and paradoxes of the new legal regulation

The reform had a number of positive intentions, but in practice it has proven to have introduced a range of paradoxes and practical problems that remain unresolved to this day. One of the issues is that the owners’ association (SVJ) is most often not a contracting party to the purchase agreement or construction contract that the developer or the property seller concluded with the unit owners. 

The SVJ therefore does not have the individual contracts, does not know their specific terms, the agreed defect claims, the agreed warranty period, or the individual purchase prices for the units. This issue is particularly apparent in larger developments where individual units were sold in different phases, often under different contractual terms.

The second problem is that unifying the SVJ’s position on how to assert a claim is never simple. The SVJ makes decisions through the meeting of unit owners, which must adopt a resolution on the course of action against the contractor.

However, any decision of the meeting may become the subject of court disputes among the owners, who may challenge the resolution by filing a lawsuit. The result is often a paralysis of the process, where instead of an effective court dispute, the SVJ must first resolve a dispute with its own members.

The third, and particularly serious, problem is liability for litigation costs. If the SVJ together with the owners files a lawsuit against the developer and the lawsuit fails (the court dismisses it), liability for reimbursement of litigation costs is usually borne by the unit owner (or owners) whose unit was affected by the defect, not by the SVJ itself.

This means that litigation costs may ultimately fall on individual owners, including those who did not agree with filing the lawsuit.

Time limits and procedures for asserting defect claims

Distinguishing between apparent and hidden defects and their procedural consequences

One of the most fundamental distinctions in the legal regulation of defects in construction works concerns the difference between apparent and hidden defects, as this distinction has a decisive impact on the time limits available to the client (in our case, the SVJ or the owner) to assert their rights.

Apparent defects are shortcomings that the client had to discover upon taking over the work; they are visible to the naked eye. Examples include unevenly laid tiles or cracks in walls. A very strict regime applies to apparent defects. 

The client is obliged to notice the defects and notify them without undue delay, typically during the handover of the work in the presence of the contractor. It is crucial that this notification is recorded in the handover protocol or at least made in writing.

If the client or the SVJ takes over the work without reservations and the contractor later relies on the argument that the defects were not notified in time, the court will not grant the client rights arising from such an apparent defect. The right arising from an apparent defect does not disappear, but the contractor can successfully challenge it in court, which creates a procedural obstacle.

On the other hand, hidden defects are shortcomings that cannot be discovered with ordinary care at the time of handover and only become apparent later. Typical examples include faults in electrical installations, water ingress into the structure, or problematic waterproofing that manifests itself only later.

Further examples of hidden defects include structural failures concealed under plaster, or other faults that come to light only after a certain period of use. A significantly more lenient regime applies to hidden defects. The client does not have to notify the defect on the day of handover, as it cannot be discovered at that moment.

Instead, the client has the right to assert the defect without undue delay after they could have discovered it with due care. In court practice, “without undue delay” is interpreted as a very short period, usually days, at most a few weeks. The Supreme Court, in decision file no. 23 Cdo 1949/2023, clearly stated that notifying a defect only after two months cannot be considered timely.

In addition to the subjective time limit of “without undue delay”, hidden defects in buildings are also subject to an objective maximum time limit of five years from the takeover of the building (Section 2618 of the Czech Civil Code). This five-year period is a special regime for buildings fixed to the ground by a solid foundation. For other types of works (for example, manufacturing furniture or a machine), the time limit for hidden defects is only two years.

A special regime applies to consumers (natural persons) in the position of the client. Under Section 2629(3) of the Czech Civil Code: if a defect in the work becomes apparent within two years of the consumer taking over the work, it is presumed that the work was defective already at the time of takeover, unless the nature of the defect excludes this.

Thus, in the first two years, the consumer does not bear the burden of proving that the defect already existed at the time of handover—the law presumes it. Only after two years have elapsed (or if the client is not a consumer) does the burden shift, and it is necessary to prove that the defect was caused by the contractor’s breach of its obligations.

Related questions on time limits and procedures for asserting defects

1. How quickly must the SVJ notify the contractor of a defect for it to have the right to assert it?

Legal regulations require notification “without undue delay” from the discovery of the defect. In court practice, this means at most a few weeks, ideally within a few days. Each day of delay weakens the legal position. It is important to make the notification in writing (registered letter, email, data box) with a description of the defect and photo documentation. The SVJ should view the process particularly critically—inaction by the SVJ may lead to a loss of rights.

2. What happens if the defect appears after a longer time? Is it necessary to notify it within five years?

The five-year period is the maximum, but it is not enough merely to notify the defect within five years. It must also be notified “without undue delay” after discovery. In practice, this means that if you notice a defect (for example, water ingress) in 2025, you must notify it in 2025, at the latest within a few weeks. You cannot wait. Both limits run concurrently.

3. Is there a difference between an apparent and a hidden defect if the SVJ notifies it after several months?

Yes, the difference is substantial. For an apparent defect that the SVJ did not notify upon takeover of the work, the contractor will be in a stronger position to refuse the claim. For a hidden defect that the SVJ notifies after several months, the contractor will also argue late notification, but the SVJ may argue that the defect simply was not visible earlier. In such a case, the court will assess the circumstances individually.

Procedure and documentation when notifying defects

The practical procedure for notifying defects is critical and should follow several key principles. First and foremost, it is necessary to secure evidence.

It is recommended to document the defect with photographs and video, state the exact date of discovery and the circumstances under which the defect manifested itself. It is not necessary to know the exact cause of the defect—a description of the manifestation is sufficient, for example, “puddles repeatedly appear in the garage” or “mould has formed in the lower part of the room”.

The defect notification must be made in writing and must be provable. The best options are a registered letter with return receipt, an email with confirmation of receipt, or a data box.

The notification should describe the manifestation of the defect, the date it was discovered, the reason it is considered a defect, which right arising from the defect is being asserted, and a reasonable time limit for a response. For the SVJ, there is a specific complication here. If it plans to assert a defect claim, it should first ensure a formal assignment of defect rights from the individual unit owners to itself.

Otherwise, it may face objections regarding a lack of standing. This assignment is usually arranged either through the mechanism of secondary intervention in court proceedings or by means of an assignment agreement.

Characteristics of material and non-material breach of contract

Legal criteria and practical distinction

The key difference in legal liability for defects lies in distinguishing between a material and a non-material breach. This distinction determines which rights the client (or the owners’ association – SVJ) may choose and whether all remedies are available or only some of them.

A material breach of contract is one where the breaching party knew that the other party would not have entered into the contract had it foreseen the breach, and it prevents the safe use of the building. 

Typical examples include structural defects that threaten the collapse of the building, the use of toxic or prohibited materials, the absence of essential elements (for example, a missing roof, lack of foundations), or defects that make the building unfit for final approval (occupancy permit).

In the event of a material breach, the client has the broadest range of rights, including withdrawal from the contract with a refund of the full price, which is the most serious remedy. This last right means cancelling the entire transaction.

A non-material breach means defects that prevent or make it more difficult to use the building, but are not so serious as to exclude meaningful use of the building as a whole. In the event of a non-material breach, the client only has the right to have the defect remedied by repair or to a reasonable discount from the price; the right to withdraw from the contract is not available.

Examples include minor aesthetic defects (uneven paintwork), minor functional shortcomings (a leaking window), or minor unfinished works. The distinction between a material and a non-material breach is decisive.

If a court considers a defect to be non-material, the client loses the right to withdraw. In addition, the Czech Civil Code allows the client to withhold a reasonable part of the price for the work until the defects are remedied, if the client has chosen removal of the defect instead of a discount or withdrawal from the contract.

Related questions on material and non-material breach

1. How do I distinguish whether a defect is material or non-material?

The simplest test is: “If I had known about this defect at the time of entering into the contract, would I have entered into it at all?” If the answer is “no” – the defect is material. If the answer is “yes, but probably for a lower price” – the defect is most likely non-material. In practice, however, this is usually determined by attorneys and courts. If you have doubts, consult specialists.

2. Can I withdraw from the contract even if the defect is minor?

Normally not – for minor defects, you are left only with the right to repair or a discount. However, there is an exception: if the defect occurs repeatedly, you may, in certain situations, request withdrawal. Specific conditions apply here – see the section devoted to recurring defects.

Requirements the building must meet – contractual versus customary standards

Defining a defect is based on comparing the actual condition of the building with the condition it should have had. Two benchmarks are used for this comparison: (a) the characteristics agreed in the contract and (b) customary characteristics. A contract for work usually contains detailed specifications – dimensions, materials, quality, technical standards. If the building does not comply with these specifications, it is clearly a defect.

A problem arises when the contract is vague or the requirements change during construction without a formal amendment, which gives the contractor an advantage. Terms such as “standard equipment” or “usual quality” are not legally precise and, in court disputes, are interpreted in favour of the contractor. 

The client – including an SVJ – should require the most precise contract possible, with specific specifications, photographs, technical standards, and material coding.

“Customary characteristics” refer to standards that are commonly expected in the relevant field, even if they are not expressly agreed. The building must be fit for final approval (occupancy permit), must comply with building standards, must not contain materials that would endanger health, and must be structurally safe. This is assessed on the basis of legal regulations and professional standards.

Joint liability of multiple parties for defects in a building

Under Section 2630 of the Czech Civil Code, if performance in relation to a building is defective, then, jointly and severally with the contractor, and always with respect to what each supplied, the contractor’s subcontractor, the person who supplied the construction documentation, and the person who carried out supervision over the construction are also liable.

These persons may be released from liability only by proving the statutory grounds for exoneration. The supplier of the construction documentation is released if it proves that the defect was not caused by an error in the construction documentation. 

The person carrying out supervision is released if it proves that the defect was not caused by a failure of supervision. The subcontractor is released if it proves that the defect was caused solely by a decision of the contractor or the person exercising supervision over the construction.

The contractor is released from liability for a defect in the building only if it proves that the defect was caused exclusively by an error in the construction documentation supplied by a person chosen by the client, or exclusively by a failure of supervision carried out by a person chosen by the client.

The client therefore does not have to definitively determine a single cause of the defect in advance. If the cause of the defect is unclear and defective workmanship, documentation, subcontracted supply, or supervision may be involved, it may be procedurally appropriate to assert the claim against multiple potentially liable persons. The technical cause of the defect is typically proven by an expert report; the legal liability of the individual persons is then assessed by the court.

In the case of an SVJ, it is always necessary to verify whether it is acting as the client for a specific work, or whether it is asserting or representing the rights of unit owners arising from defects in a unit or in the common parts of the building.

Practical problems in proving the cause of a defect

In practice, implementing the principle of shared liability runs into serious procedural problems. For a court to decide whether a defect was caused by a defect in the design documentation, or by poor workmanship by the contractor, or by inaction of the site manager, an expert report is usually necessary. The expert (a civil engineer, a specialist in the relevant construction area) must assess the matter and set out their conclusion.

While the client (SVJ) bears the burden of assertion and proof, the individual parties may “blame each other” and prolong the proceedings. The designer claims the design was correct, the contractor blames the design, and the site manager defends themselves with objections regarding their activities. The proceedings may therefore drag on for years while the court determines the truth by analysing the expert report.

Some designers, site managers, or construction companies may cease to exist during the construction, which makes it harder for the client to enforce its rights. For this reason, it is particularly important for SVJs to act in time, while all relevant parties are still “alive” and can be sued.

Potential issues where multiple parties breach their obligations

How ARROWS attorneys help

Uncertainty as to which party is responsible for which part of the defect.

We will secure a high-quality expert opinion and a litigation strategy against multiple parties; we will monitor the deadlines for filing claims against all potentially liable persons

Mutual blame-shifting between the contractor, the designer and the site manager.

We will prepare legal arguments that clearly delineate the individual responsibilities; our attorneys in Prague will represent the homeowners’ association (SVJ) in negotiations with all interested parties

Dissolution or insolvency of one of the liable parties.

We will timely review the financial health of the contractor, the designer and the site manager; we will consider insurance claims or claims against any security provided during construction

Special regime for consumers and new legislation

Two-year presumption of the existence of a defect and shift of the burden of proof

One of the most important changes introduced by the so-called consumer amendment to the law is a special regime for consumers (natural persons) acting as the customer. Under Section 2629(3) of the Czech Civil Code, the following applies: if a defect in the work becomes apparent within two years of the consumer taking over the work, it is presumed that the work was defective already at the time of takeover, unless the nature of the defect precludes this.

This rule represents a significant shift of the burden of proof. Normally, the consumer would bear the burden of proving that the defect already existed at the time of handover.

During the first two years, it becomes a statutory presumption that the defect already existed at handover. It is now for the contractor to prove that the defect arose later as a result of improper use of the work by the customer. If a building is purchased and, for example, water leakage is discovered in the first year after takeover, the consumer has a very strong legal position.

They do not have to prove that the leakage was caused by defective waterproofing from the construction phase, because the law presumes it. The contractor must defend itself by showing that the defect arose subsequently, for instance due to the customer interfering with the building. 

This regulation is very beneficial for consumers and fundamentally strengthens their negotiating position and their position in court proceedings. Note, however: this rule applies to a contract for work (including construction works or the manufacture of furniture), but not, for example, to the purchase of a thing.

For an SVJ, this means that if the apartment owners are consumers and purchased their units from a developer, their legal protection—and therefore also the protection of the SVJ—is increased. However, if the SVJ is, for example, a landlord, or if the owners are not natural persons but legal entities (companies), this special rule does not apply.

Procedural aspects and subject-matter jurisdiction of courts

Determining the correct court and procedural complications

The question of which court to bring a dispute before is not trivial. In the Czech Republic, there is a hierarchy of courts: district courts (lowest level), regional courts (intermediate level) and the Supreme Court (highest level). Subject-matter jurisdiction (which courts have jurisdiction) is determined by the subject of the dispute.

If an SVJ sues a unit owner in a matter concerning the validity of a resolution of the general meeting, the regional court has subject-matter jurisdiction. Standard disputes over the payment of advance contributions are heard by the district court. If an SVJ sues a third party (a developer) for defect-related claims, the district court usually has subject-matter jurisdiction, either according to the location of the building or according to the defendant’s registered office.

Some courts apply an expansive interpretation of the subject-matter jurisdiction of regional courts, which leads to inconsistency in case law and prolongs proceedings. A procedural issue also lies in the fact that if an SVJ conducts litigation, and it should do so on behalf of the unit owners, the unit owners should be involved in the proceedings, for example as interveners.

If the SVJ’s standing is challenged or not properly proven, this may result in complications in the proceedings.

Requirements for a formally flawless statement of claim and evidence

For a claim to succeed in court, it must meet a number of formal and substantive requirements. Formally, it must include: (a) identification of the parties; (b) identification of the court; (c) a description of the facts (a chronology of events); (d) the legal qualification of the breach of rights; (e) a specific request for relief; and (f) evidence supporting the allegations.

Substantively, the claim should be persuasive and supported by evidence. The key piece of evidence is usually an expert opinion that analyses the cause of the defect and identifies the responsible party. 

Additional evidence may include construction-phase documentation (the construction logbook), photographic documentation of the defect, an expert statement by a civil engineer or technical supervisor, inspection reports and correspondence with the contractor.

Working with evidence is critical; incomplete or contradictory evidence may lead to the claim being dismissed. Therefore, it is important already at the stage of preparing the claim to secure high-quality legal representation that will assess which evidence is decisive and what to focus on.

Procedural aspects and choice of court

1. Which court has jurisdiction over an SVJ’s dispute with a developer regarding construction defects?

Typically, the district court with territorial jurisdiction based on the location of the building is competent. If it is a dispute between an SVJ and an owner regarding the validity of a resolution of the general meeting, the regional court is competent. For standard disputes with owners, e.g. over unpaid advance contributions, proceedings are conducted before the district court. However, it is always better to obtain a legal assessment of the correct subject-matter jurisdiction before filing a claim.

2. Do all SVJ members have to be involved in the proceedings, or is the SVJ alone sufficient?

The SVJ alone is sufficient if it has standing to enforce the owners’ rights. However, individual owners may be involved in the proceedings as interveners. This strengthens the SVJ’s position or helps if its standing is challenged. Without a proper legal basis, the SVJ risks the judgment being rendered ineffective.

3. What happens if the claim is poorly drafted or evidence is missing?

The court may dismiss the claim, issue a decision protecting the procedural advantages of the opposing party, or invite the SVJ to supplement the supporting documents. The safest approach is to prepare the claim properly, with professional legal assistance.

Addressing practical issues and recommended strategies

Preventing disputes through high-quality contractual practice

Although litigation is sometimes unavoidable, the best solution is to prevent it. For SVJs and their members, this means placing emphasis on high-quality contractual practice already at the time of purchasing or constructing apartments.

The purchase agreement should be as precise as possible and include a detailed list of materials, brands, technical parameters and their specifications. It should include photographs and technical drawings with clearly visible elements to which the agreement applies. The agreement should specify which construction standards must be complied with.

A contract for work should clearly define the time limit for notifying defects, the warranty period, the procedure for remedying defects, the liability of the parties, and contractual penalties. It is particularly important to ensure that the developer or construction company provides security in the amount of a certain percentage of the price in case they fail to remedy defects after they are identified.

For the owners’ association (SVJ), it is important to seek the cooperation of the unit owner, for example by ensuring a coordinated approach when asserting the claim. Alternatively, try to enable the owner to be involved in the court proceedings.

Effective enforcement of rights and communication with the contractor

Once a defect is discovered, the SVJ should proceed without delay. The first step is to ensure detailed documentation of the defect—photographs, videos, and a detailed description. It is advisable to record the defects in a log with the date and circumstances of discovery.

Written notice to the contractor should be sent by registered mail with proof of delivery or via a data box (datová schránka) to ensure evidentiary value. The notice should clearly state the description of the defect, which right arising from the defect is being asserted (e.g., a request for repair, a price reduction), and a deadline for response.

At this stage, it is advisable to negotiate with the contractor, as defects can often be resolved out of court. This is significantly cheaper and faster than court proceedings. If the contractor does not cooperate or refuses to acknowledge the defect, the SVJ should consider filing a lawsuit, always based on a high-quality legal assessment of the situation.

Use of an expert opinion and third-party specialists

If the dispute enters the court phase, an expert opinion is almost always necessary. The expert assesses whether there is a defect, its scope and impact, its cause (design documentation, workmanship, failure of site management), and the costs of repair.

The quality of the expert opinion is decisive. A poor opinion that disregards technical standards or is vague may lead to the claim being dismissed. Therefore, it is important to engage an expert with a strong reputation and experience with construction defects. 

Especially in the initial phase (before court proceedings are initiated), it may be useful to commission a so-called “technical assessment”—this is not a legal expert opinion, but a professional statement from a civil engineer or technical supervisor who assesses the defect and its cause. This assessment can then serve as a basis for legal argumentation.

Final summary

Disputes of an SVJ arising from a contract for work due to defective performance in the Czech Republic are governed by a complex legal regime, which changed fundamentally in 2014 with the introduction of the new role of the SVJ as an actively legitimised representative of unit owners. 

Although the reform was intended to harmonise the procedure, in practice it led to ambiguities. Legal regulations distinguish between apparent and hidden defects, material and non-material breaches, and special regimes.

Practical dispute resolution requires a deep understanding of the legal framework, including time limits for asserting rights (“without undue delay”, 2–5 years), the subject-matter jurisdiction of courts, and requirements for lawsuits and evidence. 

Especially for SVJs, it is critical to secure rights from individual unit owners and coordinate their approach; otherwise, there is a risk of losing rights or failing in court proceedings.

The best strategy is always a combination of prevention and pragmatism: an emphasis on high-quality contractual practice, prompt documentation of defects, negotiations with the contractor, and readiness to pursue court action. 

If you are facing a dispute over construction defects, it is not advisable to improvise – contact the attorneys at ARROWS advokátní kancelář at office@arws.cz and secure expert representation to increase your chances of success.

Most common questions regarding an SVJ dispute arising from a contract for work due to defective performance

1. What rights does the SVJ have when a defect is found in a unit that falls under the common parts of the building?

The SVJ has the right to represent the affected unit owners and assert their defect claims. It may request repair, a reduction of the purchase price, or, in the case of a material breach, even withdrawal from the contract. However, the SVJ must secure the rights from individual owners through an assignment of rights or by involving them as an intervening party in the court proceedings.

2. How long do I have to notify the contractor of a defect so that the SVJ has the right to assert it?

For apparent defects, the time limit is very short—practically at the handover of the work or during inspection. For hidden defects, you must notify the defect without undue delay after you discover it (usually within a few weeks). Remember: the five-year period for hidden defects is the maximum— the subjective time limit runs in parallel.

3. What happens if the SVJ fails in a court dispute with the developer? Do I, as a unit owner, then have to pay the costs of the proceedings?

In some cases, yes—if it is interpreted that the SVJ was representing your unit specifically. This is one of the paradoxes of the new legal regulation. Therefore, it is advisable to secure legal representation and pay attention to whether and how the SVJ proceeds.

4. Can I, as an individual unit owner, sue the developer directly, or must the SVJ do it?

The law primarily assumes that the SVJ asserts the claims. However, there are exceptions, for example when the defect concerns only your unit, or when the SVJ is inactive. In such a case, you may proceed on your own. In practice, however, it is usually simplest and most effective to work through the SVJ, which is in a better position to represent multiple owners.

5. How long does a court dispute over construction defects take?

Usually 1 to 3 years at first instance and another 1 to 2 years in the event of an appeal. Everything depends on the complexity of the dispute, the amount of evidence, and the workload of the competent court. Therefore, it is advisable to try to resolve the dispute out of court if possible.

6. What if the defect appears only after a long time, say after three or four years? Do I still have a right to it?

For buildings, yes, if it is a hidden defect—you have five years from acceptance. However, you must notify it without undue delay from its discovery. If you notice it in year four, you must notify it immediately, not leave it for later. The attorneys at ARROWS advokátní kancelář (office@arws.cz) will help you determine whether you are still within the time limit and how to proceed correctly.

Notice: The information contained in this article is of a general informational nature only and is intended for basic orientation in the matter. Although we strive for maximum accuracy of the content, legal regulations and their interpretation evolve over time. To verify the current wording of the regulations and their application to your specific situation, it is therefore necessary to contact ARROWS advokátní kancelář directly (office@arws.cz). We accept no liability for any damages or complications arising from the independent use of the information in this article without our prior individual legal consultation and expert assessment. Each case requires a tailored solution, so please do not hesitate to contact us.

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