Conditions the vendor must respect

In the framework of property transactions, the vendor has to respect a certain number of obligations.

Generally property transactions are usually conducted without any major problems: The two parties sign the pre-contract, the purchaser pays around 10% of the final price and the sale is finalised with a signature, after which the purchaser becomes the legal owner of the property. But certain problems can surface, notably when the vendor does not respect some of his/her obligations.

1 - Handing over the property:

   According to law, the sale is said to be concluded when the two parties reach consent «and agree to a price» (art.1583 of the civil code). In the majority of cases the handover of the property takes place before the purchaser becomes the legal owner and has paid the price in full for the property.

** The transfer of property is opposable by a third party only after publication of the sale contract in order to obtain a mortgage.

   However, there are always risks involved in the handover of a property and  (art.1138) states that if a property is damaged before the contract is finalised and the keys are handed over the vendor will be charged.

2 - Obligation to provide information:

   In general the vendor is required to communicate all the information in his possession pertaining to the property at the time of sale.(on going work to the property, existence of a lease, rights of ways, etc.).

   This obligation applies in particular to a professional vendor who is required to gather all useful information before a sale and can not omit any important information under the pre-text of ignorance.

3 - Obligation to handover:

Handover:

   The first obligation of the vendor is clear : that is to hand over the sold property, or as far as an estate agent is concerned, allow the buyer to take possession of the property ,or tenancy if the premises is being rented out.

• Not only does the handover refer to the property itself, but all the necessary paperwork associated with it.( the deeds of the property, various certificates)
• Not all matters  concerning the vendor are necessarily transferred :  Example : If the vendor has received compensation from a neighbour for damages, this is not transferred to the purchaser.

Conformity:

   The vendor is obliged to ensure the property conforms to specifications set out in the contract.  Since article 1614 of the civil code the building must be handed over in its state at the time of sale. Between signing and handing over keys the vendor must keep the property in its original condition. It is also expected that the vendor will watch over the property .But the risk of deterioration or loss are borne by the purchaser (unless this was due to the vendor not supervising the property adequately).

   Article 1616 of the civil code clearly sates certain rules pertaining to the plot. In theory if the area of the plot is more than 5% smaller than the size stated in the signing , the purchaser can demand a prorate reduction. However, if the area is 5% larger the purchaser could be asked to pay further fees or pull out of the sale. Legally this situation can only arise in the same year in which the contract was signed.

   Realistically this situation rarely occurs to this extent or non guarantee clauses are added to the contract releasing the vendor from liability if the plot size is different from that stated, unless the vendor has made a big error in calculation.

** Tribunals refuse to release the vendor from responsibility if he is a professional selling to a private purchaser.

   On the other hand, since Carrez's law, contracts involving co-owners must state the exact size of the plot. If the area handed over is less than 5% of the size stipulated in the act, the purchaser can demand a prorate reduction in price up to the following year.

4 - Failing to handover:

   When the vendor does not fulfil his obligation to handover a property, the purchaser can legally demand to terminate the sale or force the vendor to handover the property.

• The court could order the keys to be handed over and a payment to be made for every day the vendor has delayed handover by.
• If the court rules that the sale is cancelled the vendor must refund the whole price and compensation can be sought after this. Any bank loans applied for will be cancelled retrospectively.

   The purchaser could also choose to sue for loss or damages( removal costs e.t.c..).

** The judge is not always able to award a reduction in the sale price.

   When the total agreed sale price is not paid in full, the vendor can postpone handover if it is proven that the purchaser has fallen into financial difficulties since the time of sale (article.1613 of the civil code).

   The vendor could put forward a case to suspend or cancel his obligation to handover (unforeseeable events, compelling events outside of the transaction) These situations are decided upon case by case by the courts.

5 - Obligation of guarantees:

Certificates:

The vendor must produce at his/her cost, the following certificates :

• Presence of termites, in the zones deemed at risk by the prefecture ;
• Presence of lead in paint in buildings built before 1948 and situated in zones deemed to be at risk by the prefecture;
• The presence of asbestos in buildings where permission to build was granted before 1^st July 1997.

   If  these certificates are not produced the sale is not terminated ,however if the purchaser then discovers the presence of termites, lead or asbestos  he/her could demand a reduction in price or look into cancelling the sale.

Guarantees against eviction :

The vendor must guarantee the purchaser  « The smooth possession of a sold object» (art.1625 of the civil code). In other words the vendor cannot engage in any actions that could limit the use or the rights of the property for the purchaser.

At the same time the vendor is responsible for disputes involving third parties that go against the rights of the purchaser.

This responsibility can is only applicable under the two following conditions :

• The purchaser must be sincere, that is to say he/she should be unaware of the risk of lawsuits at the time of sale;
• The problem is the fault of the vendor and not an outside event.

   This responsibility is at all times limited by clauses in the contract apart from serious mistakes or bad workmanship if the vendor is a professional.

Guarantees against hidden defects :

   In the aftermath of article 1641 of the civil code a hidden defect is classed as a fault that renders the property unfit for use or dramatically limits the use of the property and a fault which the purchaser was unaware of and did not pay a discounted price for at the time of sale.

6 - Applying the guarantee for hidden defects discovered under these two conditions:
 

1. The purchaser should not be aware of the faults at the time of sale.

• The guarantee is not valid if the defect is visible or the vendor had informed the purchaser of it.
• The purchaser has to have a certain amount of vigilance and take into account the vendor's technical knowledge and cannot demand a private individual to do something which requires technical ability.
• In principal the professional purchaser has the same technical competence as the vendor is supposed to have at the time of sale. 

2. The defect must be present before the time of sale and it is up to the purchaser to prove this.

7 - The purchaser who discovers a hidden defect has the choice of two solutions:
 

1. He/She can verbally reach an agreement outside of court and « estimate» a partial refund.
2. He/She can claim an action « unacceptable » which results in a retrospective termination of sale and a refund (with a surcharge for fees) for one or other of the parts of the property.

   The purchaser could also claim compensation for the loss of sale, but only on the grounds of foul play by the vendor, that is to say that it can be proved that the vendor had knowledge of the fault at the time of sale. Important point : a professional vendor will always be held responsible unless it is otherwise proven.

   The claim against a hidden fault must be taken up shortly after it is discovered. Normally courts will accept cases between six months and a year old.

   The contract can contain clauses which limit the vendor's responsibility in these cases, but courts are quite strict in these cases and if the vendor is proven insincere or to have made a serious mistake the court is likely to rule in favour of the purchaser.