4. Guarantees on 'Off-Plan' French Property

1. 4.1. Checking out the Developer
   4.2. Financial Guarantees
   4.3. Building Guarantees

4.3. Building Guarantees for 'Off Plan' French Property

Under the terms of a VEFA contract, the developer is under an obligation to remedy any defects in the property that arise within the first year following handover of the property.

In addition to this one year contractual guarantee, the developer is also required to give a ten year statutory building guarantee on the property.

The first year of this ten year guarantee runs co-terminously with the one year guaranteee under the VEFA.

In strict legal terms, if the developer is not also the builder, the ten year building guarantee is between the developer and the builder, to the benefit of the purchaser.

In order to improve the enforceability of this rule, and reduce litigation between client and developer, the law requires separate client insurance is also taken out.

The client insurance is called assurance dommages-ouvrage.

The policy provides a similar ten year guarantee against defects in the workmanship in the event of default by the developer.

4.3.1. Developers Building Guarantee

The ten year building guarantee from the developer/builder operates through an insurance policy they are required by law to take out.

This insurance policy is called the assurance décennale.

There are severe penalties for a developer/builder who does not carry this insurance cover.

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. Normally, the Notaire should verify that it is satisfactory.

Where a defect arises the client is not obliged to prove the fault and the developer/builder is presumed to be responsible.

The developer/builder can, however, escape liability on grounds of force majeur (event not foreseeable, irresistible and external).

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.

There is also a guarantee that the property complies with current noise insulation standards – la garantie de l’isolation phonique. This guarantee operates separately from the assurance décennale for the first year following handover, to the benefit of the first occupant of the property.

Moreover, in a recent judgement, the French Court of Appeal took the view that, even should a property comply with current noise insulation standards, if there remains a noise problem that can be objectively identified, then it is still possible to draw upon the ten year guarantee to seek redress. It will, as always, depend on the circumstances.

Quite apart from the ten year guarantee on defects, there is also a right to bring a legal action against the developer for up to 30 years, if the property does not conform with the specification as set out in the sale contract.

So the 30 year rule does not cover 'defects' per se, but a lack of correspondence between the specification and the end product. There is a lot of litigation on this whole issue and the distinction can only finally be determined by a court of law.

4.3.2. Householder Defects Insurance

The purpose of the assurance dommages-ouvrage is to ensure, as far as possible, that you are satisfactorily protected in the event that the developer, or their insurance company, does not accept liability under the ten year building guarantee.

In these circumstances it might take you years to obtain redress, even if you are ever able to do so.

This insurance is normally arranged by the developer but paid for by the client.

The policy will provide ten year cover on the same basis as that of the builders’ insurance.