Municipal pre-emption right: no hidden defect for known pollution

You are the owner of a plot of land in La Roche-sur-Foron. You sign a preliminary contract with a developer, who later discovers pollution. The municipality, which exercised its right of pre-emption, refuses to sign the final deed, citing a hidden defect. What happens? This decision of the Court of Cassation of 7 November 2012 rules: a municipality cannot rely on a hidden defect or fraudulent concealment if it had the means to know about the pollution, particularly through its technical services or those of the state. Explanations.

The facts: a story like many that happen every day

In 2009, two SCIs sell a plot of land located on Rue d'Abbeville in Amiens. A preliminary contract is signed with a buyer, and a pollution report is annexed to this private document. The municipality of Amiens exercises its urban pre-emption right and substitutes itself for the buyer. However, after reviewing the report, it refuses to sign the deed of sale, claiming that the sellers concealed the polluted state of the land. The SCIs then sue the municipality to obtain the completion of the sale. The court of first instance rules in favour of the sellers, but the municipality appeals. The Amiens Court of Appeal, in 2011, dismisses the SCIs' claim, holding that the municipality was entitled to refuse the sale. The sellers appeal to the Court of Cassation. Who is right?

The reasoning of the court — analysed

The Court of Cassation quashes the appeal judgment. It recalls that, for there to be a hidden defect or fraudulent concealment, the buyer (here the municipality) must prove that it could not have known of the defect before the sale. However, the municipality had specialised services and the assistance of state services (such as the DREAL). Moreover, the preliminary contract, which mentioned the pollution, did not have to be annexed to the declaration of intention to alienate. The municipality therefore had the means to inform itself. In other words, one cannot invoke a hidden defect when one is in a position to discover it. This decision is part of consistent case law: the right of pre-emption is not a right of repentance. Municipalities must act diligently.

What this means for you — practically

If you are the owner of polluted land and the municipality exercises its right of pre-emption, it cannot back out later on the grounds that you did not tell it everything, if it could have known. For example, in Thonon-les-Bains, a plot of land sold for €200,000 with lead pollution known to the municipal services: the municipality cannot refuse the sale. For buyers, this means that they must check the diagnostics before buying. Co-owners and tenants are not directly affected, but the decision strengthens the legal security of transactions. If you are in this situation, you must demand the completion of the sale, under a penalty (for example €500 per day of delay).

Four tips to avoid this type of dispute

• Annex all diagnostics to the preliminary contract: even if the law does not require it for the declaration of intention to alienate, this avoids any challenge.
• Have a soil study carried out before the sale: for €1,500 to €3,000, you will know the state of the land and can negotiate the price.
• Check the BASOL and SIS databases: they list polluted or potentially polluted sites. Free of charge, you will know if your land is affected.
• Consult a lawyer as soon as you receive the declaration of intention to alienate: the municipality has two months to pre-empt; advice can prevent an abusive refusal.

Further reading: related case law and developments

This decision confirms an earlier judgment of the Court of Cassation of 3 May 2006 (No. 04-18.198), which had already ruled that the seller is not obliged to inform the municipality of pollution if it had the means to know about it. However, since the ALUR law of 2014, sellers must inform the buyer of the existence of pollution in certain cases (SIS zones). But this obligation does not apply to pre-empting municipalities, which are deemed to be professionals. The trend is therefore towards making municipalities responsible: they must use their services before exercising the right of pre-emption, and not afterwards to withdraw.

Checklist before acting

• For sellers: Have you annexed all diagnostics to the preliminary contract? Have you checked whether the land is listed as polluted?
• For municipalities: Have you consulted the state services (DREAL) before pre-empting? Is there a known pollution report?
• For private buyers: Have you requested a soil study? Has the seller provided you with all the information?
• In case of a dispute: Do you have a lawyer? The claim must be brought within 5 years of the refusal (limitation period).

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