Droit Immobilier

The penalty clause provided for in the contract in the event of delay

📅 Décision du 29 March 2006⚖️ Cour de cassation👁️ 3 vues📖 2 min de lecture

The penalty clause provided for in the contract in the event of delay expires upon delivery and not upon the lifting of reservations recorded at acceptance, delivery being distinct from acceptance. The provisions of Article L. 231-6 IV of the French Construction and Housing Code extending the warranty until the date of acceptance do not apply to delay penalties.

Reference decision: Cass. • No. 05-11.509 • 2006-03-29 • View decision →

This decision sheds important light on your property law. Here is what it changes for you.

The situation

The penalty clause provided for in the contract in the event of delay expires upon delivery and not upon the lifting of reservations recorded at acceptance, delivery being distinct from acceptance. The provisions of Article L. 231-6 IV of the French Construction and Housing Code extending the warranty until the date of acceptance do not apply to delay penalties.

What the law says

This decision confirms the fundamental principles of property law.

Key takeaways

  • Strictly comply with legal appeal deadlines
  • Keep all your supporting documents (deeds, instruments, correspondence)
  • Plan ahead: preventive advice is always cheaper than a dispute

For an analysis of your situation: 30-minute consultation at €45 with Maître Zakine.

📌 Does this apply to your situation? Maître Cécile Zakine, French real estate lawyer, practises throughout France.
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Informations juridiques

  • Numéro: 05-11.509
  • Juridiction: Cour de cassation
  • Date de décision: 29 mars 2006

Mots-clés

droit immobilierjurisprudenceimmobilier

Cas d'usage pratiques

1

Off-Plan Buyer Disputes Penalty End Date

First-time buyer Emma purchased a flat off-plan in Lyon for €250,000, with a contractual delivery date of 30 June 2023. The developer delivered on 15 December 2023, but Emma recorded 35 reservations during acceptance on 10 February 2024. The developer stopped delay penalties at delivery, claiming €7,500, while Emma argues penalties should run until final acceptance, totalling €11,000.

Application pratique:

Under the Cassation Court ruling, delay penalties cease at delivery, not when reservations are lifted. Emma should calculate penalties only up to the actual delivery date (15 December 2023) and not beyond. She must review her contract’s definition of ‘delivery’ and gather all correspondence and acceptance records. If the developer refuses to pay the correct amount (approximately €5,500 for 168 days at €32.50/day), Emma can seek legal advice to negotiate or bring a claim based on this binding precedent.

2

Landlord’s Investment Property Delayed and Defective

Marc, a landlord in Bordeaux, bought a new-build house for €400,000 to rent out, with completion by 1 September 2022. The builder delivered on 20 November 2022, but Marc noted 20 defects and formally accepted with reservations on 5 January 2023. The builder withheld the final instalment of €40,000, claiming delay penalties only applied until delivery (€4,800), while Marc insists on penalties until full acceptance (€7,200).

Application pratique:

This case law confirms that Marc’s delay penalties stopped on 20 November 2022, the date of delivery, regardless of the later acceptance with reservations. Marc should not withhold payment for penalties beyond delivery. He must promptly pay the outstanding amount minus the correct penalty deduction (€4,800 for 80 days at €60/day). To recover costs for the defects, Marc should rely on separate warranty claims, not delay penalties, and keep distinct records of reservation-related expenses.

3

Condominium Association Chases Developer for Late-Delivery Fees

A 20-unit condominium in Nice, completed six months late, was delivered on 1 March 2023. The residents’ association accepted the building on 30 April 2023, listing unresolved issues like lift malfunctions. The developer paid delay penalties only up to 1 March, but the association argues the six-month delay fee of €30,000 should extend to 30 April because the building wasn’t fully usable.

Application pratique:

Following this precedent, the association’s claim for extra delay penalties after delivery is unfounded. The penalty clause lapses on delivery, not acceptance with reservations. The association should accept the penalties paid up to 1 March and focus on compelling the developer to fix defects under the legal warranties of perfect completion (garantie de parfait achèvement) or decennial liability. They should formally notify the developer of each unresolved defect and, if necessary, take legal action for specific performance rather than trying to extend penalty periods.

Maître Cécile Zakine

À propos de l'auteur

Maître Cécile Zakine — Avocate au Barreau des Alpes-Maritimes, Docteur en Droit. Chaque article de ce magazine est rédigé à partir de l'analyse d'une décision de jurisprudence réelle, commentée et mise en perspective par les équipes de Maître Zakine.

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