11. French Building Guarantee
- 11.1. Ten Year Building Guarantee
- 11.2. Builders Ten Year Insurance
- 11.3. Householder Defects Insurance
11.1 Ten Year Building Guarantee
If you engage a building contractor to undertake construction work then, under common law, their work is guaranteed for a period of up to ten years.
The responsibility is referred to as la responsabilité décennale and operates on a reducing basis, with minor work guaranteed for a year and more major building work guaranteed for the full period.
In order to improve the enforceability of this rule, and reduce litigation between client and building contractor, the law requires both client and building contractor to take out insurance cover.
The policies provide a ten year guarantee against defects in the workmanship.
The builders insurance is called assurance décennale whilst the insurance taken out by the client is called assurance dommages-ouvrage.
11.2. Builders Ten Year Insurance
The assurance decennale taken out by the builder contractor covers their liability in the event of defects arising during the ten year guarantee period.
The insurance is obligatory and there are severe penalties for a builder (or other tradesmen) who does not carry appropriate insurance.
However, enforcement of the rule is weak and, like many rules in France, it is honoured as much in the breach as the observance!
The whole issue of insurances is a major issue in the construction industry in France because those who do act in a proper manner are clearly disadvantaged by those who do not, as the latter are more likely to be in a position to offer a more competitive quote.
Top Tip!
So, beware of low estimates. You need to ask yourself why it is low, and if it is because the builder is not carrying the cost of insurance, you clearly need to take a view as to whether or not you wish to use them.
Our own strong recommendation would be that you should always ask to see the defects insurance certificate of the builder before accepting a quotation or commencement of works.
You should check that it is an up-to-date certificate, failing which the insurance company may be unwilling to pay out in the event of a claim.
The ten year guarantee operates on a tiered basis as follows:
(i) During the first year from completion the builder is obligated to guarantee complete performance of the work – la garantie de parfait achèvement.
(ii) During the second year to guarantee that fittings are in good working order e.g. electrics, sanitary goods, heating, windows, shutters, and doors – la garantie de bon fonctionnement.
(iii) During the ten years from completion to guarantee all those works concerned with the stability and integrity of the building, including those elements which ensure the building is wind and watertight eg foundations, floors, walls, staircase, ceilings, door and window frames, major electrical and plumbing defects, roof, framework – l’assurance décennale.
Where a defect arises the client is not obliged to prove the fault and the building contractor is presumed to be responsible.However, the builder can escape liability on grounds of force majeur (event not foreseeable, irresistible and external) or where the client (or their architect) was responsible for the design. The latter is a frequent source of litigation.
Most importantly, beyond the first two years, the ten year guarantee does not cover defects in building products or equipment installed in the property. It only covers the workmanship of the contractor.
Accordingly, if, for instance, your boiler ceases to function after five years, you cannot go back on the builder, unless the cause of the failure was their installation work. If the builder was not at fault, you would need to examine the manufacturers' guarantee.
Ground movement is covered by the guarantee if the nature of the works involved construction of the foundations or stabilisation of the building. You will also be covered under your household insurance for this kind of risk.
The builder remains responsible for the work of their sub-contractors, although it is possible for them to bring an action against the sub-contractor in the event of default.
There is a lot of case law concerning the operation of the builders ten year guarantee, as the law itself is not precise on what is covered and the extent to which it may be covered.
In some measure, therefore, the level of cover you get will depend on the terms of the insurance policy held by the builder.
Thus, although major items may be covered for ten years, this is likely to be on a reducing scale eg 50% after 5 years. Whether or not all of these clauses are legal only a court can decide.
So you need to discuss the policy with the builder and be clear how it operates in the event of defects arising.
The best solution is to also take out your own defects insurance policy, the details of which are set out below.
11.3. Householder Defects Insurance
The purpose of this insurance is to ensure, as far as possible that, as client, you are satisfactorily protected in the event that the builder (or architect) or their insurance company does not accept liability for defects.
They may deny that a defect exists or, if it does, to say that it was not part of their works or to blame a supplier, sub-contractor or architect (or builder).
In these circumstances, it might take you years to obtain redress, even if you are ever able to do.
The assurance dommages-ouvrage seeks to remove all of this uncertainty by placing an obligation on your insurer to meet the costs of remedying the defect and leaving it to them to fight the battle as to who is responsible.
11.3.1. Getting Cover
Although the law requires that clients take out this insurance for major building projects, in practice, this does not always occur, either because of ignorance or because of cost.
Builders do not publicise it because it makes it easier to bring a claim against them, and some insurance companies do not like it because it is often risky for them.
If you have a house constructed using the CCMI contract, then it is obligatory for assurances dommages to be take out.
Nevertheless, there are no penalties for a householder who does not take out the insurance but, if you later decide to sell, it may make it more difficult to do so.
The insurance also has some resale value for, if you sell the property within ten years, the new owner continues to benefit from any years left on the policy.
Likewise, if you do not take it out and then later sell the property, it is possible that a new owner could seek legal redress against you in the event that major defects became apparent.
To avoid this risk you would need to make the buyer aware that the ten year guarantee did not exist and include a suitable clause to that effect in the conveyance.
This insurance is not cheap, costing several thousand euros for construction of a new house or wholesale renovation of a dilapidated property.
So, faced with this potential expense, you need shop around to get the best deal.
One option is to use the insurance company of your builder, who may also offer a more competitive rate, although it may cause a potential conflict of interest!
Alternatively, those companies who are regularly involved in the construction sector may be able to offer the most attractive rate e.g. Groupe SMABTP.
Finally, try going through insurance brokers, called courtiers, as they may have discount arrangements with insurance companies that are not available to individual householders.
Whichever route you take make sure you (or your advisor) read the small print so that you are making valid comparisons.
If an insurer refuses to offer you cover then you should contact the Bureau Central de Tarification (BCT), an independent body established by the government to regulate disputes between insurance companies and their clients.
The BCT can force a company to provide the insurance and to also determine the basic tariff which is to apply!
11.3.2. Terms of Cover
The policy must be taken out before works commence and will provide the cover on the same basis as that of the builders’ insurance.
In other words as follows:
Year 1 - Guarantee of complete performance of the work – la garantie de parfait achèvement.
Years 1 and 2 - Guarantee that fittings are in good working order e.g. electrics, sanitary goods, heating, windows, shutters, and doors – la garantie de bon fonctionnement.
Years 1 to 10 - All those works concerned with the stability and integrity of the building including those elements which ensure the building is wind and watertight eg foundations, floors, walls, staircase, ceilings, door and window frames, major electrical and plumbing defects, roof, framework - l’assurance décennale.
The policy does not cover normal maintenance work or remedial work arising out of the failure of the householder to undertake proper maintenance.
If the householder changes the nature of the works after signing the contract then they must inform the insurance company, who may decide to offer the insurance on new terms.
Most contracts will include an ‘excess’ and possible exclusions. You should also check the indexation clause and process for making a claim.
Some insurance companies also offer consequential damage cover such as loss of rental or costs of renting a property if your home cannot be occupied. These aspects of the cover are discretionary.
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Building and Renovation in France