The home owners had asked for a total of 8 million kronor ($1.2 million) in compensation, but construction company Myresjöhus now walks free from responsibility.
The plaintiffs will now also have to pay not only their own but the builders’ legal costs, amounting to 1.2 million in total, which ends up at about 35,000 kronor ($5,000) each.
The case has been watched closely by the building industry.
It concerns what is known as “one-step facade insulation” (enstegstätade fasader), which has been used on tens of thousands of homes across Sweden, the TT news agency reports.
The building technique has been condemned by many industry experts, although modified versions are still in use.
“It’s a very risky process. One little mistake and the whole thing goes to pot. Water gets into the walls and you can’t get it out,” Christer Harrysson, construction professor at Örebro University, told the trade magazine Byggvärlden last year.
“We been able to confirm that the facades are attacked by mould, fungi and bacteria, which means you have to dry out the wall but also decontaminate it.”
Harryson estimates that it costs between 1 and 1.5 million kronor (1 million kronor = $153,872) per house to fix the problem.
Many houseowners have been forced to take the matter to court, noted Byggvärlden, as constructions companies, property developers, and insurance companies keep shunting the cases between each other.
The upcoming ruling, due Friday from the Gothenburg Court of Appeals (Göta hovrätt), is expected to set legal precedent, reports TT.