Latent Defects and Selling French Property
On the face of it, selling property may seem like a relatively straightforward process. But when selling French property, the conclusion of the sale is preceded by the fulfilment of several legal requirements. For that reason, one will need an experienced property solicitor if they are to correctly navigate these requirements – violation can be costly.
One of the key requirements is the vices caches principle or the principle of latent defects. The seller is required to disclose any information on the defects of the property that would make it difficult for it to be used for the purpose intended or that may otherwise give the buyer substantial reason not to purchase the property at the quoted price.
Ordinarily, the seller will not be liable for defects that are easily noticeable by the buyer with minimal inspection. However, certain defects will still be considered latent even if an initial assessment by an inspection expert before the conclusion of the sale did not discover it.
Depending on the stage at which the undisclosed latent defects are detected and the repercussions, the seller will be subjected to penalties that range from an annulment of the sale and a reduction in the selling price to payment of damages to the buyer.
However, any legal action that the buyer takes upon the discovery of these defects must be initiated within 2 years of the discovery. While sellers can include a clause in the sale agreement that indemnifies them from any liability due to apparent or latent defects, it cannot indemnify them from defects they knew or would have known about before the sale.
Certain French property surveys are mandatory before selling the property. For instance any property that was constructed before to 1st July 1997 must undergo an asbestos survey before it changes ownership. Similarly, a lead survey is necessary for any building that was put up before 1st January 1948.
If the property is located in an area that is classified as vulnerable to termites, a termite survey will be necessary. Beginning 1st November 2006, any conveyance of French property for sale must have as part of the transaction documentation an energy efficiency survey. Energy inefficiency however is not considered a latent defect and its outcome does not subject the seller to any liability. It is purely informational.
Property that is fitted with an indoor gas distribution system that has been in place for more than 15 years must be surveyed for safety before the transaction is closed. This requirement came into force on 1st November 2007.