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Handover & notice of defects.

Much is decided at handover: the handover protocol, a timely reservation and the right notice of defects secure your claims. We accompany you from handover to enforcement.

BRANDAUER Rechtsanwälte
Your law firm

BRANDAUER Rechtsanwälte

Salzburg law firm for real estate, construction and corporate law

Every matter is handled by a coordinated team of lawyers, legal staff and specialists. In construction cases we look at contract, evidence, deadlines and commercial consequences together.

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The handover of the works is the turning point of a building project. It starts the three-year warranty period under section 933 ABGB and decides whether recognisable defects can still be asserted. Anyone who knows of an obvious defect and still accepts the work without reservation can no longer give notice of it under section 928 ABGB.

Documentation is therefore decisive: a carefully kept handover protocol records the condition of the works, recognised defects and outstanding work, and secures the evidence. Hidden defects that only appear later are not affected by acceptance without reservation but must be asserted within the warranty period.

In transactions between two businesses the duty to give notice under section 377 UGB is added: defects must be reported within a reasonable period, otherwise the work is deemed approved. This page orders handover, protocol and notice of defects. The guide below helps you assess your situation but does not replace an examination of the individual case.

Assess your situation

Where do you stand on handover and notice of defects?

Answer one or two questions about the defect, handover and your role. You will receive a first, non-binding assessment of your situation.

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01 Question 1

How did the defect come to light?

A defect recognisable at handover (an obvious defect) is treated differently from a hidden defect that only appears later. If handover is still ahead, much can be secured in advance.

All paths at a glance

Overview of all answers.

01

Before handover you are in control: inspect the work and record every defect.

Handover starts the three-year warranty period under section 933 ABGB, and an obvious defect you accept without reservation may be deemed approved under section 928 ABGB. Inspect the work carefully, bring in an expert for larger projects, and record every recognisable defect and any outstanding work in the handover protocol.

For recognised defects declare an express reservation and agree a deadline for repair. A clean protocol is later your most important piece of evidence.

To the handover protocol checklist →
02

The defect is recorded in the protocol. Now demand repair with a deadline.

Because you recorded or reserved the obvious defect in the handover protocol, the deemed-approval rule of section 928 ABGB does not apply. Your warranty claims are preserved: first demand repair or replacement regardless of fault. Only if these are impossible, disproportionate, refused or unsuccessful do price reduction or rescission replace them (section 932 ABGB).

Set the contractor a reasonable deadline in writing and document receipt. Keep the three-year period under section 933 ABGB from handover in view.

03

Accepting an obvious defect without reservation is delicate. Have your position checked quickly.

If you accepted a defect recognisable at handover without reservation, it may be deemed approved under section 928 ABGB, so warranty claims for it are excluded. Whether a defect really was obvious and recognisable, however, is often disputed and depends on the individual case.

Have it checked early whether the deemed-approval rule applies at all and whether a fault-based damages claim under section 933a ABGB comes into consideration. Hidden defects are not affected by acceptance without reservation in any event.

04

As a consumer you have no duty to give notice. Still report the hidden defect promptly.

A hidden defect that only appears after handover is not affected by acceptance without reservation. As a consumer you are not subject to the duty to give notice under section 377 UGB. While the three-year period under section 933 ABGB runs you can demand repair regardless of fault; if the defect appears within the first six months, the presumption of section 924 ABGB helps.

Still report the defect promptly and provably and request repair. This avoids disputes about when it was discovered and secures evidence.

05

In a business transaction the duty to give notice under section 377 UGB counts. Give notice quickly and specifically.

In a transaction between two businesses you must give notice of a hidden defect too within a reasonable period of its discovery under section 377 UGB; otherwise the work is deemed approved and warranty and damages claims may be lost. In addition, the three-year warranty period under section 933 ABGB runs from handover.

Describe the nature and extent of the defect specifically and secure receipt of the notice. Missed notices can hardly be repaired, so an early check is worthwhile.

Reporting defects correctly

Obvious defect, hidden defect, business transaction

What to do about a notice of defects depends on the type of defect and your role. The overview shows what matters in each case and what is at risk if you fail to act.

Notice of defects at handover by type of defect and role of the parties
Situation What you should do Consequence of failure
Obvious defect Recognisable at handover Record in the handover protocol, declare a reservation Acceptance without reservation may be deemed approval under section 928 ABGB
Hidden defect Only recognisable after handover Report promptly and provably once discovered The three-year period under section 933 ABGB may expire
Business transaction Transaction between two businesses Give notice within a reasonable period (section 377 UGB) The work is deemed approved, claims may be lost
Handover protocol At the formal handover Record condition, defects and outstanding work Missing documentation makes later proof harder

Whether a defect was obvious or hidden and which period is reasonable depends on the individual case. The table offers an overview and does not replace an examination of the individual case.

Handover and the handover protocol

With handover the customer declares that they accept the work as performance. It triggers two legal consequences: the three-year warranty period under section 933 ABGB begins to run, and an obvious defect, that is one recognisable at handover, which you accept without reservation may be deemed approved under section 928 ABGB. Therefore inspect the work carefully before handover.

The handover protocol is your most important piece of evidence here. Record the condition of the works, every recognisable defect, outstanding work and agreed repair deadlines, and declare an express reservation for any defects. Our handover protocol checklist walks you step by step through the points you should not overlook.

Notice of defects: form, content and deadline

An effective notice of defects describes the defect specifically by nature and extent and requests repair. Send it provably, for example by registered letter or email with proof of receipt, and set a reasonable deadline. This avoids disputes about the content and timing of the notice.

In a transaction between two businesses section 377 UGB sharpens the position: defects must be reported within a reasonable period of delivery or discovery, otherwise warranty and damages claims are deemed lost. Consumers are not subject to this duty to give notice but should still report the defect promptly to secure evidence.

Hidden defects and the warranty period

A hidden defect that was not recognisable at handover and only appears later is not affected by acceptance without reservation. You can assert it as long as the warranty period runs. For a building it is three years from handover under section 933 ABGB, not from the discovery of the defect.

During the first six months after handover the presumption under section 924 ABGB helps: if a defect appears in this period, it is presumed to have already existed at handover. After the warranty period expires a fault-based damages claim under section 933a ABGB may still exist; its limitation follows section 1489 ABGB: three years from knowledge of the loss and the party causing it, and absolutely after thirty years.

This page offers a general overview of the Austrian legal position and does not replace advice in an individual case. Whether a defect was obvious or hidden, which notice period is reasonable and when the warranty period begins are often disputed in an individual case.

Frequent questions

Handover and notice of defects.

Must I give notice of defects already at handover? +

You should record an obvious defect recognisable at handover immediately in the handover protocol and declare a reservation, otherwise it may be deemed approved under section 928 ABGB. Hidden defects that only appear later are not affected by this; in a business transaction, however, you must give notice of them under section 377 UGB within a reasonable period of discovery.

What belongs in a handover protocol? +

The protocol should record the condition of the works, every recognisable defect, outstanding work, agreed repair deadlines and the date and signatures of those involved. Declare an express reservation for any defects. Our handover protocol checklist walks you through the most important points.

I accepted without reservation, are my claims lost? +

Not necessarily. The deemed-approval rule of section 928 ABGB only covers obvious defects recognisable at handover. Hidden defects remain assertable as long as the three-year period under section 933 ABGB runs. Whether a defect really was obvious and recognisable is often disputed and should be checked; in addition a damages claim under section 933a ABGB comes into consideration.

How quickly must a business give notice of a defect? +

In a transaction between two businesses section 377 UGB requires notice within a reasonable period of delivery or, for hidden defects, of their discovery. What is reasonable depends on the individual case. If notice is omitted, the work is deemed approved and warranty and damages claims may be lost.

In depth

Articles and tools on this focus area

Notice of defects and deadlines

Form, content and deadlines of the notice of defects for consumers and businesses under the ABGB and section 377 UGB.

Construction defects after handover

Which deadlines under section 933 ABGB run from handover, who must prove what and which claims exist.

Handover protocol checklist

Step by step through handover: recording condition, defects, outstanding work and reservations correctly.
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Handover or notice of defects open?

At handover, the protocol and deadlines decide. Call us directly or write to us, with a callback within one business day.

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