What is the Guarantee of ‘Vices Cachés’?
Monday 08 October 2018
Property buyers in France are afforded legal protection against hidden or latent defects, but just how does this guarantee operate?
What is a 'Vice Caché'?
A vice caché is a hidden or latent defect in a property (or equipment, tools etc that may be purchased).
In order for such a defect to be accepted in law, three main tests are used:
- The defect is one that would not be apparent to the buyer;
- The problem must be sufficiently grave that it renders the property unsuitable for its proper use, or that it diminishes significantly this use, such that the buyer would not have purchased it, or purchased on the same terms, had they known about it;
- The defect must have been present prior to the sale.
The fact that it is a 'hidden' defect does not imply that the owner has deliberately withheld it from the buyer (as this would then be fraud), but a defect that is not one that the owner would necessarily have any knowledge.
There is a huge amount of case law concerning the application and interpretation of these principles.
Although all cases are considered on their merits, the courts have determined that certain defects are more self-evidently 'hidden' defects, such as defective foundations, termite infestation, flooding risk, an unstable structure, provided, as always, that they have not otherwise been brought to the attention of the buyer.
If any of these problems have been identified during the statutory surveys (diagnostics immobiliers) then you will have been deemed to have been informed about them.
Nevertheless, these surveys are not by any means a comprehensive building survey so should not be used as a definitive statement on all aspects of the condition of the property.
There is a time limit of two years to bring a legal action.
Contrary to common belief, the two-year period does not run from the date of the sale, but from the date the defect was discovered.
What this means in practice is that you needed to have formally notified the seller, via a letter sent recorded delivery, that you consider there to be a hidden defect and to do so within two years of it being discovered by you.
Clearly, by this point will probably need to take professional advice, perhaps with the assistance of a building surveyor and/or an avocat.
If you are unable to reach an amiable settlement with the seller, then the matter will need to be heard in a Tribunal de Grande Instance.
If you are successful with your claim, the two solutions are:
- Annulment of the sale and reimbursement of costs
- Damages to repair the defect or to reflect the lower value of the property
It is also possible you may be entitled to both annulment and damages. This might occur, for instance, where the court judged that the seller acted in bad faith.
If the defect is such that even the seller might not have known about it, then a claim is less likely to be successful; the principle of ‘caveat emptor’ (buyer beware) applies as much in French law as it does elsewhere.
That said, the seller is obliged to disclose all important information about the property that might affect the decision of the buyer, or the price they paid for the property. If they do not do so, then it is possible for a court of law to offer a remedy.
Matthew Noble, who is a practicing RICS Building Surveyor in France also consider sellers need to be aware of the risks of DIY: "As a seller of a property, any works you have carried out will also be subject to the same law. If the standard of work is not acceptable, or a part of the work done fails, you could well be liable for reparation works. You should balance your DIY skills with what may be deemed to be acceptable to buyers if a sale is going to take place in under ten years."
Sale and Purchase Contracts
Notaires sometimes seek to limit the use of the vice caché protection by a standard exclusion clause the in the sale contract.
In practice, whether a court of law would uphold this clause would depend on the circumstances of the case. If the court considered that the buyer had been deliberately misled by the seller, then they could annul the clause.
Indeed, this has happened in a number of important court cases, although in other legal decisions the clause has been upheld. It all depends on the circumstances, notably whether the seller acted in good or bad faith.
Our advice to all buyers is that you should press for the removal of this clause in the sale contract. The seller may well object to you doing so, but if they do, their motives need to be questioned.
You should be hesitant about accepting to buy 'en l’état' (as seen) unless you fully understand what you are buying.
Ensure also that any important clause on the condition of the property that may have been included in the sale contract is transferred over into the deed of sale.
There are particular guarantees on a house constructed within the last ten years, and there is additional protection if the seller is a property professional - property dealer, property developer or builder - as their own disclosure obligations are more prescribed.