Buying a new apartment still a risky venture

  • 2004-09-02
  • By Aleksei Gunter
TALLINN - For the average Estonian familiar with the vagaries of Soviet-built residential housing, an apartment in a newly developed building would appear almost perfect. Well, at least until the buyer visits the construction site and attempts to follow the developing process.


Even though the price of one square meter in a newly built Tallinn house starts at around 800 euros, a sum quite significant for Estonians, there is still a fair possibility of getting a place with sloping walls and roaring water pipes.
One of the most talked about stories springs from the residential area of Veskimoldre, a Tallinn suburb, when a dozen newly built apartment owners filed a complaint with the developer Arco Invest. This was the first experience of this kind for the company.
Blaming the subcontractors for architectural flaws, Arco Invest had to repair wall cracks and pipe problems within months of the project's official completion. Arguments over sound insulation and other issues lasted from completion of the district's first houses in 2000 to early 2004.
According to the Estonian Union of Housing Associations, the most common flaws new apartments are low quality door and window installation, cracks in the walls, poor sound insulation, bad heating systems and high humidity in residential rooms, to name but a few.
To avoid unpleasant surprises, the union recommends hiring construction experts before the major work begins.
Although construction quality and design mastery may be top of the line, little attention is paid to the long-term property maintenance process, the Association of Estonian Facilities Administrators and Maintenance Professionals says.
Juri Kroonstrom, head of the association, claims that construction in Estonia is still often done on the cheap and without proper planning for future maintenance.
"The real-estate owner often has to pay a price painfully high for postconstruction maintenance for decades," he says.
In 2003, 71 complaints regarding construction service quality were filed with the Consumer Protection Board. While a significant percentage of those were considered minor services - such as door and window installation - the number of complaints regarding building quality increased.
But unless the contract specifies concrete quality requirements with the constructed and purchased property, the Consumer Protection Board does not deal with real estate related complaints.
The main complaints registered in 2003 related to the violation of previously agreed company deadlines, incomplete buildings and poor safety standards. In some cases the client discovered that the contracted company did not even have a license.
The common scam scheme is based on the trust of the client, according to the protection board. After receiving an advance payment and completing a small part of the work, a construction company often disappears and promptly declares itself bankrupt. The collected money is then partly used to start a new company.
According to a survey by the Estonian Institute of Economic Research, only 9 percent of the population has actually read the law on consumer protection, while some 70 percent have heard about the act.