Property Sale Contract Declared Invalid
6th Dec 2022
A French property buyer wins damages against an estate agent for a sale contract improperly drawn up.
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Although the formalities for the sale and purchase of real estate in France are best undertaken entirely through a notaire, authorised estate agents are permitted to process the sale and purchase contract (compromis de vente). The formal conveyancing (acte authentique) is then carried out by a notaire, on the terms set out in the contract.
In a case that was recently heard in the French court of appeal, a buyer brought a legal action for damages against an estate agent whom they considered had failed to undertake appropriate enquiries prior to preparation and signing of the contract.
The buyer claimed the estate agent had not informed him of litigation taking place between the seller and the managing agents of the block of flats.
The dispute between the seller and the management agents concerned building works that had been carried out by the seller in the basement of the property where bedrooms had been created by the seller, which had changed the configuration of the space.
Although the works were mentioned in the sale contract, they were contrary to the co-ownership rules (règlement de copropriété) and were being contested by the managing agents. The changes were also contrary to public health regulations.
When the conveyancing process started, the notaire alerted the estate agent and buyer to the litigation, about which he had been informed by the managing agents, and which he considered made the sale and purchase agreement invalid. As a result, the buyer was required to suspend the purchase.
Under the French Civil Code, an estate agent who drafts a contract must ensure that all the necessary conditions are met for the legal effectiveness of that act, even with respect to the party that did not mandate it. The same obligation is imposed on a notaire.
Although the estate agent argued in court that the sale should not be suspended due to litigation against the seller, this was not accepted by the court, who ruled that the agent had an obligation to bring to the attention of the buyer the irregular nature of the building works that had been carried out.
The seller was awarded damages of €2,500 against the agent and the contract declared invalid.
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