Professional Sellers and Latent Defects
17th May 2023
Professional sellers cannot escape liability for latent defects, a French court has ruled.
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In a judgment recently handed down by the French Supreme Court, the Cour de Cassation, a professional seller is deemed to know the latent (hidden) defects (vices cachés) of the properties they sell and must inform the buyer about them.
In the case, a general builder had acquired an old farmhouse on which he had carried out major reconstruction work, including new external walls, save for the gable ends.
On completion of the works the builder sold the property to a private couple.
The sales contract provided that the seller was not obliged to guarantee latent defects.
Article 1643 of the civil code provides for the possibility for a seller to limit their liability in this way, stating: "A seller is liable for hidden defects, even if they were not aware of them, unless.... they have stipulated that they will not be bound by any guarantee."
Several years after the sale, structural cracks appeared in the walls, which a survey established came from ground movement.
When the case went to the Court of Appeal, the court ruled in favour of the builder stating that "Mr. X's profession of builder did not imply the possession of the technical knowledge enabling him, when he did the renovation work, to anticipate a ground defect. "
Nevertheless, the purchaser successfully appealed the ruling, when the Supreme Court refused to accept the limitation clause of liability for hidden defects, stating that a professional seller should know the defects of the item being sold.
The court considered that in failing to inform the non-professional purchaser of their rights the builder had acted in bad faith.
In coming to that conclusion, they followed jurisprudence dating from 1952, which established that a professional seller will automatically be acting in bad faith, and therefore unable to benefit from any exoneration, as they are required to know the defects affecting from the item sold.
This rule does not apply to estate agents, who are considered to be only intermediaries, although there are other obligations that apply to them.
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