8. Building Guarantee

If you engage a building contractor to undertake construction work then, under common law, the 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 or materials.

The builders insurance is called assurance décennale whilst the insurance taken out by the client is called assurance dommages-ouvrage.

8.1. 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.

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.

The builder should also be asked to provide a copy of their public liability insurance.

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.

Where a defect arises the client is not obliged to prove the fault and the building contractor is presumed to be responsible.

The builder can, however, 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.

Ground movement is be covered by the guarantee if the nature of the works involved 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.

8.2. 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 the defect.

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.

8.2.1. Getting Cover

Although the law requires that you 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.

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 would to make the buyer aware that the ten year guarantee did not exist and include a suitable clause to that effect in the conveyance.

So, faced with this potential expense, you need shop around to get the best deal. Given the shyness of some insurance companies about this type of policy, it may well take you several months before you can find a satisfactory policy.

You are not obliged to use your normal household insurer but it is possible you will get a better rate with them.

One other 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 eg ‘Groupe SMABTP’.

Finally, try going through insurance brokers (courtiers) as they may have discount arrangements with insurance companies which are not available to individual householders.

Whichever route you take make sure you read the small print so that you are making valid comparisons.

If an insurer refuses to offer you cover (quite possible!) 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 on to also determine the basic tariff which is to apply!

8.2.2. 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:

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.

8.3. Claims Procedures

A building dispute is rarely one that is straightforward but, if you have taken out defects insurance, then the prospects of getting it resolved to your satisfaction are greatly increased.

The ten-year guarantee starts from the date you accept completion of the works from the contractor, even though it may be qualified acceptance.

If it is qualified acceptance the handover is stated as being accepted on a conditional basis (la réception avec réserves).

If visible defects are apparent then these should be written down and a copy of the list of defects should be sent to your insurance company. Photos are also very useful.

If the builder is unwilling to remedy the defects then you may be able to call upon your insurance policy to get the work carried out by another builder.

If defects arise after the handover, then you need to inform your insurance company, by recorded delivery letter, within five days of the defect arising (or you becoming aware of it), although certain contracts may give a longer period of time to respond.

If this timescale has passed the insurance company may still accept the claim if you can prove the problem is causing serious harm or injury. Do not proceed through your broker although they should be copied in on your claim.

Your claim must state the number of your insurance policy and the date handover occurred from the builder (failing which the date occupation occurred), and the date the defect occurred.

If the defect caused a water leakage or fire which damaged personal belongings or damage to neighbouring property then you should also make a separate claim on your household insurance (multi-risques d’habitation)

The insurance company is obliged to appoint an expert within 60 days of receiving your claim and to say whether or not they accept the claim.

The insurance company can refuse to appoint an expert if they feel the claim is manifestly absurd, unjust or if they consider the cost of repairs is below €1800.

If the insurance company accepts the claim then they are obliged to provide a copy of the experts report to you and make an offer of indemnification within 30 days of acceptance of the claim.

This period may be extended where the circumstances are particularly complex.

There is no time limit in which you must accept the offer but, if it is accepted, then the insurance company is obliged to make payment within 15 days of receiving confirmation of acceptance.

In the event of refusal of your claim by your insurance company you need immediately to communicate by recorded letter your disagreement with them.

You need to then engage the services of an independent expert and present the results of their work to them.

If your insurer does not accept this evidence then you will need to go to court for judgement under a fast track legal procedure for urgent cases called référé.

Legal costs can also be covered by an insurance contract protection jurdique, which you may have as part of your household insurance policy. Check with your household insurer, but make sure the policy covers construction related disputes.

You can make more than one claim on the insurance if subsequent defects arise.

Neither are you actually obliged to carry out the works (!) although, if there are subsequent claims, the insurance company may well refuse to pay out if they consider that the defect has been caused or aggravated by a failure to carry out works from initial indemnification.

Next: Disputes with your Builder