I Reminder of facts and procedure
I Reminder of facts and procedure
When the property sold is affected by hidden defects requiring its demolition, the purchaser who has chosen to keep it without restitution of all or part of the sale price is entitled to obtain from the seller in bad faith damages equivalent to the cost of its demolition and reconstruction (Civ. 3rd. Jan. 30, 2020, FS-P+B+I, No. 19-10.176).
In this case, the purchasers of a house who discovered that the property subject to the sale presented numerous disorders, decided to summon the seller and the notary as a guarantee for hidden defects, and called in the real estate agent as a guarantee.
The Court of Appeal followed the reasoning of the buyers and ordered the seller to return part of the sale price to the buyers and to pay them the cost of the destruction and reconstruction of the house.
The notary and the real estate agent were ordered to bear 10% of this condemnation.
This decision was overturned by the 3rd civil division of the Court of Cassation in a decision of December 14, 2017 (Civ. 3e. Dec. 14, 2017, No. 16-24.170).
The case was thus referred to the Lyon Court of Appeals.
II The solution
This time, the referring Court of Appeal ordered the seller to pay the cost of the destruction and reconstruction work, and the notary and the real estate agent to bear 10% of the cost, without providing for the restitution of part of the sale price.
In principle, on the basis of the guarantee for hidden defects (article 1644 of the Civil Code), the purchaser has two choices:
- The cancellation of the sale and thus, the restitution of the sale price: this is called the redhibitory action.
- The conservation of the good and the obtaining of a decrease in price: called the estimating action.
In this case, the purchasers had decided to keep their property.
In its decision of January 30, 2020, the French Supreme Court ruled that :
“Thus, when the property sold is affected by hidden defects requiring its demolition, the purchaser who has chosen to keep it without restitution of all or part of the sale price is entitled to obtain from the seller in bad faith damages equivalent to the cost of its demolition and reconstruction”.
However, the restitution of a part of the sale price does not exclude compensation for damages suffered by the purchaser because of the defect of the thing. This is, moreover, what the Cour de cassation (French Supreme Court) recalled on December 14, 2017:
“The reduction of the price to which the seller is bound by virtue of article 1644 of the Civil Code does not, in itself, constitute a compensable loss (…)”.
Thus, an action for compensation may be brought independently of the redhibitory or estimatory action. (Com., June 19, 2012, appeal no. 11-13.176, Bull. 2012, IV, no. 132; 1st Civil Court, September 26, 2012, appeal no. 11-22.399, Bull. 2012, I, no. 192; 3rd Civil Court, June 24, 2015, appeal no. 14-15.205, Bull. 2015, III, no. 66).
In conclusion, the Court of Cassation, in its ruling of January 30, 2020, ruled that, although the price did not give rise to any restitution, the various parties responsible could be held liable for full compensation of the loss (reimbursement of the cost of demolition and reconstruction work), insofar as the loss suffered as a result of the defect could only be fully repaired by the demolition and reconstruction of the house, which was the object of the sale.
Thus, the purchaser could be content to bring an action for damages, without bringing a redhibitory or estimatory action on the basis of the warranty for latent defects, if he considers that the cost of the repairs may be higher than the restitution of the price that he can obtain before the courts (see Dalloz sheet).
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