Suspensive Condition of Obtaining a Planning Certificate: When the Promise of Sale Becomes Final

Imagine: you are the owner of a plot of land in Villefranche-sur-Mer, with an unobstructed view of the Mediterranean. You sign a promise of sale with a buyer, subject to the condition that he obtains a planning certificate (an official document indicating whether the land is developable and what constructions are permitted) allowing building. The buyer obtains this certificate, but you, as the seller, refuse to sign the deed of sale (the final deed before a notary). Can you be compelled to do so? The question has divided the courts for decades.

In a decision of 18 February 1971, the Court of Cassation ruled: if the buyer has obtained the planning certificate, but it is the seller who obstructs the signing of the deed, the suspensive condition (the one that suspends the sale until the certificate is obtained) is deemed to have been fulfilled. In other words, the seller cannot withdraw by claiming that the condition has not been fulfilled due to his own act. A common-sense solution, but one that deserves to be analysed.

What you need to remember: a suspensive condition is not 'purely potestative' (left to the sole will of the buyer) as long as the buyer has done what is necessary to fulfil it, and the failure comes from the seller. An essential protection for any property buyer.

The facts: a story that happens every day

In May and June 1956, Dame Y. agreed to buy a plot of land from M. X., owner in Villefranche-sur-Mer. The promise of sale was concluded under a suspensive condition: the buyer's obtaining of a planning certificate permitting the construction of the planned buildings. Dame Y. filed an application and obtained the certificate a year later, in 1957. But M. X. refused to execute the sale by deed of sale (signature before a notary). Why? The seller considered that the condition had not been fulfilled, because the certificate had allegedly been obtained late, and that the condition was 'potestative' (i.e., dependent solely on the buyer's will, which would render it void). Dame Y. sued M. X. to obtain specific performance of the sale.

The court of first instance ruled in favour of Dame Y.: it ordered the sale. M. X. appealed. The court of appeal upheld the judgment. M. X. appealed to the Court of Cassation. He argued that the suspensive condition was potestative because the buyer had the option not to produce the certificate, and thus could prevent the sale. The Court of Cassation dismissed his appeal: the lower courts had found that Dame Y. had obtained the certificate at the conclusion of the sale, and that it was due to the seller's act (his refusal) that the deed had not been executed. The condition was therefore not purely potestative.

In short, the seller cannot rely on his own bad faith to escape his obligations.

The reasoning of the court — analysed

The Court of Cassation relies on Article 1178 of the Civil Code (now replaced by Article 1304-2 since the 2016 reform of contract law), which provides that a condition is deemed fulfilled when it is the debtor (here the seller) who prevented its fulfilment. In other words, no one can benefit from their own wrongdoing.

The lower courts had found that Dame Y. had indeed obtained the planning certificate one year after the promise, but that this delay was reasonable and that the certificate permitted the planned constructions. The seller, M. X., had refused to sign the deed of sale without valid reason. Consequently, the suspensive condition was fulfilled by the buyer's act, and the prevention came from the seller.

But what exactly does this change? Before this decision, some courts considered that any condition depending on the buyer obtaining a document was potestative, because the buyer could voluntarily choose not to apply. The Court of Cassation put an end to this uncertainty: if the buyer has taken the steps and obtained the document, the condition is not potestative, even if he could theoretically have refrained from doing so. What matters is the actual behaviour of the parties.

However, note: the decision does not call into question the validity of standard suspensive conditions. It simply clarifies that the seller cannot invoke potestativity to evade his commitments when the buyer has fulfilled his obligation.

What few people know is that the Court of Cassation also reiterated that the suspensive condition is always deemed to be stipulated in the buyer's interest (unless otherwise agreed). Thus, it is for the buyer to decide whether or not to waive the condition. But if the seller obstructs, the buyer can demand specific performance.

What this means for you — practically

If you are a buyer of property under a suspensive condition of obtaining a planning certificate (or a building permit, a loan, etc.), this decision protects you. The seller cannot withdraw by claiming that the condition has not been fulfilled if you have taken all the steps and it is he who blocks the signing.

Concrete example: you buy a plot of land in Menton for €300,000, subject to obtaining a planning certificate to build a villa. You obtain it after 6 months. The seller, who has received a better offer, refuses to sign. Thanks to this case law, you can compel him to sell, or obtain damages (for example, the difference between the agreed price and the current value of the land, which could be €350,000, i.e., a loss of €50,000).

If you are a seller, beware: do not rely on a suspensive condition to back out if the buyer has done his job. You could be ordered to sell or to pay damages.

undefined, I have encountered cases where sellers tried to withdraw after the buyer had obtained a building permit. The case law is unfavourable to them unless they can prove a change in circumstances (for example, a modification of the local development plan making the land undevelopable).

How to react? If you are a buyer and the seller refuses to sign, you must: 1) keep all evidence of obtaining the certificate and the seller's refusal; 2) send a formal notice to the seller by registered letter with acknowledgement of receipt; 3) petition the judicial court to have the sale declared.

Four tips to avoid this type of dispute

• Draft a precise suspensive condition: specify the deadline for obtaining the certificate, the minimum expected characteristics (developability, surface area, height), and the consequences if not obtained. Avoid vague wording such as 'subject to obtaining a favourable planning certificate'.
• Keep all evidence: retain acknowledgements of receipt of your applications, correspondence with the administration, and the certificate obtained. In the event of a dispute, these documents are essential to demonstrate your good faith.
• Have the seller's refusal recorded: if the seller refuses to sign, send him a formal notice by registered letter. If he remains silent, you can ask the notary to draw up a certificate of default.
• Consult a lawyer before signing: a professional can verify that the suspensive condition is balanced and complies with case law. The cost of a consultation (€45 for 30 minutes with Maître Zakine) is negligible compared to the stakes.

Further reading: related case law and developments

This 1971 decision is part of a consistent line of authority from the Court of Cassation. One can cite a judgment of 20 March 1972 (No. 70-13.678) holding that the suspensive condition of obtaining a loan is not potestative if the buyer has made several applications and the loan refusal is attributable to the bank, not the buyer. Conversely, if the buyer makes no effort, the condition is deemed to have failed and the sale is void.

More recently, the Court of Cassation clarified in a judgment of 14 November 2018 (No. 17-21.394) that the suspensive condition of obtaining a building permit is fulfilled if the buyer has obtained a permit, even if it is subject to a third-party challenge. The seller cannot hide behind the uncertainty of the challenge.

The trend is therefore towards protecting the buyer acting in good faith, provided that he has actually made the efforts. The courts sanction sellers who, through their bad faith, prevent the fulfilment of the condition.

What you absolutely need to remember

FAQ: Practical questions

• Can I compel the seller to sell if I have obtained the planning certificate but he refuses? Yes, you can petition the court to have the sale declared. The case law is favourable to you if you prove that the refusal is abusive.
• What if the planning certificate is unfavourable? The suspensive condition is not fulfilled; the sale is void. You get your deposit back (unless otherwise agreed).
• Can the seller invoke a change in the local development plan after the promise to refuse to sell? No, unless the promise contains an adaptation clause. The suspensive condition refers to the law applicable on the date of the promise.
• What are the time limits for taking action? You have 5 years from the refusal to petition the court (general limitation period). But it is advisable to act quickly, within 6 months.
• What is the cost of proceedings? Expect between €1,500 and €5,000 in lawyer's fees, depending on complexity. Damages may cover these costs if you win.

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