11. Building Guarantees in France
11.2. Builders Ten Year Insurance - Assurance Décennale
The assurance décennale 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 architect) 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.
In addition, sub-contractors to the main contractor on a building project are not obliged to take out insurance for their works, as they have no direct contractual relationship with the client.
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.
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 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.
Only those activities declared by a builder to his insurer are covered by the ten year building warranty so ensure you check the activities listed on the policy.
It should also be noted that 'l'assurance décennale' is not 'l'assurance responsabilité civile professionnelle'; the latter is the third party public liability cover that a builder should also hold.
So do not be fooled by a builder who offers you their public liability insurance policy as their 10-year insurance policy!
If the builder should become bankrupt/ceases activity during the progress of the work, or following completion, the insurance policy remains in operation, an important safeguard.
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.
Some insurance policies seek to limit the scope of the building guarantee, but if the policy conflicts with the law the policy can be declared void by a court of law, as has occurred in the past.
In order to reduce abuses and bolster the protection offered to consumers, since 2016 building professionals are required to produce to their clients a declaration of their insurance cover, with a number of minimum information requirements.
This declaration is called a modèle d'attestation d'assurance de responsabilité décennale and must be attached to estimates and invoices provided to the client.
The main information requirements are:
- Identification of the insurer
- The policy number
- Period of validity
- Scope of the guarantee
- The geographic area
- The date of commencement of works
- The value of the works
Any later contract between the client and the building professional that conflicts with the information provided in the declaration would be considered void.
The requirement also has implications for property buyers and sellers, for the declaration must also be annexed to the deed of sale of a property with an unexpired ten-year guarantee.
One significant omission from the template is that there is no requirement for the building professional to stipulate that they are up-to-date with their insurance premium payments, which may require that the client seeks confirmation from the insurer.
As much as the declaration is a significant step forward in this matter, neither is it a panacea, for even though there may be an insurance policy in place insurers not infrequently contest a claim made on a policy.
One solution is for a client to take out their own ten-year building defects policy, called assurance dommages-ouvrage, which effectively acts as an insurance policy against the failure of the builder's insurer to pay out! The policy can also cover abandonment of the site by the contractor.
The cost of such a policy is around several thousand euros, so it is not a decision that can be taken lightly. We consider this policy in the next section.
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