Lack of Disclosure Causes Sale to be Quashed
Friday 01 April 2011
A seller who did not disclose the existence of an easement has had the sale quashed.
In a recent court case that went before the Tribunal de Grand Instance in Every, the court considered a contract between a couple and a developer who was buying land from them with a view to construction.
During the process of the sale the seller disclosed several easements (servitudes) that existed over the property, but omitted to mention the existence of an easement for drainage granted to a neighbour.
This easement was not one that was apparent from the searches carried out by the notaire, so did not run with the property, but nevertheless granted rights of way for the beneficiary.
The buyer learned of the easement from the neighbour, as a result of which they refused to sign the deed of sale, the acte authentique.
The presence of the easement meant that it was impossible for the developer to proceed with the project, or to only be able to do so at a higher cost.
Nevertheless, the sellers brought a legal action for resolution of the sale, and payment of damages by the buyer.
The court ruled that the seller failed in their obligation to provide all material information to the buyer concerning the property.
As a result, the resolution of the contract was not caused by any fault on the part of the buyer, who was neither required to complete the sale or pay any damages.
The case illustrates the important principle in French property law that the seller is required to disclose all material facts about the property, and that failure to do so leaves them open to the sale being quashed or the payment of damages.
In this case, no damages were sought by the developer, who merely sought resolution of the contract.