Discovery of Hidden Defects in a French Property
Let us first set the scene: you have happily purchased a property in France by yourselves but discover after some time spent in the property that it is affected by certain hidden defects which nobody ever told you about. What remedies, if any, do you have?
The legal framework:
Pursuant to Article 1641 of the French Civil Code, the vendor is bound to supply his guarantee with respect to hidden defects of the sold property, rendering it unfit for the use for which it is intended or which diminishes such usage so much that the purchaser would not have purchased it, or would have given a reduced price for it, had he been aware of such defects.
At this stage, there are two important factors to be aware of: firstly, a claim for hidden defects can be made not only against the immediate vendor, although this is the most obvious target, but also against the previous owner, as the case may be. Secondly, ignorance of the defect by the vendor does not exempt him from his liability.
The burden of proof:
Pursuant to applicable rules of French Law, generally speaking, the burden of proof of an allegation lies on the person making it. Therefore, the purchaser will need to prove not only
the existence of the defect, but also that it fulfils the conditions required by Article 1641 of the French Civil Code in order to have a recourse.
1. The defect must have a sufficient magnitude to justify a remedy:
Ultimately, it will be a matter for the discretionary appreciation of the Court. However, the defect must justify a price reduction or make the property, at least in part, unfit for the use for which it was intended. A typical example could be a crack in walls, provided that it has an incidence on the soundness of the building. If a particular usage was intended, then it is essential to have written evidence that the vendor was informed of it prior to the sale. An example of this could be the requirement that a cellar must not contain so much humidity so as to prevent its use as a playroom. Defective water proofing of the roof is also a fairly typical example. In theory, any defect will of course potentially reduce the price for which the property was bought and it will be a matter for the Judge to appreciate whether the diminution of user justifies the amount of such reduction if at all, or even, if said defect would justify the cancellation of the contract.
2. The defect must have been hidden:
This criterion is more difficult to appreciate and each case will be balanced by the Judge taking into account all the factual circumstances surrounding it and among others the duty of the vendor to inform the purchaser, the duty of the purchaser to gather and supply information, whether the purchaser is a professional in the building trade etc. There is no duty on the purchaser to become an expert in construction and the Law imposes a number of searches which must be supplied to him (asbestos, termites etc.). The number of such inspections has a tendency to increase over time, but so far there is no duty to supply a survey report in the sense in which it is usually understood in the UK.
Good common sense also comes into play, and any defect which a reasonable purchaser could have detected by himself will not give rise to a guarantee as the ‘buyer beware’ principle remains applicable.
If however, the purchaser is a professional (in the wide sense of the term i.e. he doesn’t need to be a builder but his profession provides him with a good knowledge of building standards) then there is a rebuttable presumption that he was aware of the defect upon purchase although such presumption can be rebutted by evidence of deliberate manoeuvres by the seller to hide the defect, or proof that the defect was not detectable within a short period of time.
3. Other conditions of the defect:
The purchaser also needs to prove that the defect existed prior to the purchase, along with the fact that the defect must be in direct relation with the property sold and not be caused by some external factor (e.g. a nearby telephone mast etc.).
It is of course possible to seek help from a surveyor in order to get assistance with respect to ascertaining the features of the defect necessary to trigger the vendor’s liability. However, the vendor may contest the independence of the surveyor so it may be advisable to directly apply to the Court for it to appoint a judicial expert who will be deemed to be independent.
4. Remedies:
Should the above conditions be met, the purchaser will have the choice between seeking the termination of the sale, which implies restoring the parties to the position in which they were prior to the sale, i.e. a full refund of the purchase price and transfer of the title back to the vendor, or a reduction in the price.
A claim for hidden defects can be initiated within two years of the discovery of the defect (this in itself has to happen within 30 years of the sale, after which any action is time barred).
5. Liability Exclusion Clause:
The contracts for the sale and purchase of French real estate property very often contain an exemption clause benefitting the vendor and excluding his liability for hidden defects. This is allowed by article 1643 of the French Civil Code. Such an exemption clause will not stand if it can be proved that the vendor was aware of the defect or could not have ignored it, which is of course made easier if he is a professional in the building trade. The law also imposes on sellers an obligation to have another inspection carried out (termites in certain areas, lead for properties of a certain age, electricity etc). Failure to provide inspection reports on the same will cancel any exemption clause with regard to the related defect.
Exemption clauses are considered valid by case law, although their wording needs to be carefully looked at, as they are only effective for the defects which they encompass. The validity of general exemption clauses has been more debated and given rise to decisions going both ways.
It is best to seek legal advice on the subject in any case, preferably prior to signing any contract.
Hervé Blatry
Avocat
TEE FRANCE
Email: [email protected]
Direct line: 01279 710 654 or 01279 710 621