Building Permit Refused: Force Majeure Does Not Excuse Everything (Cass. 1978)

Imagine: you buy a plot of land in Moissac to build a house. The deed of sale mentions an undertaking to build within four years, a condition for benefiting from a reduced rate on transfer duties. You submit your building permit... and the administration refuses it because a future road widening encroaches on your plot. The burning question: does this refusal release you from your tax obligation? Can force majeure be invoked to avoid the penalty?

The French Supreme Court ruled on this precise question in 1978, in a decision that remains authoritative. The message is clear: a foreseeable refusal of a building permit does not constitute a case of force majeure (unforeseeable and irresistible event). For owners and developers, this decision is a stern reminder: before buying, you must check the planning regulations.

In this article, we dissect the case, explain the judges' reasoning, and give you the keys to avoid falling into this tax trap. Whether you are in Castelsarrasin or elsewhere, the rules are the same.

The Facts: A Story That Happens Every Day

In 1970, a SCI (real estate investment company) bought a building plot in Moissac. The deed of sale contained a formal undertaking: to build housing within four years. In return, the SCI benefited from a reduced rate on transfer duties, in accordance with former Article 1371 of the General Tax Code (CGI).

But even before the signing, a planning information note (a document informing of planning constraints on a plot) was issued to the SCI. It stated that the plots were affected by a project to widen the main road, with an encroachment (emprise: portion of land taken by the authority for public works) on the plot. Despite this information, the SCI bought the land and applied for a building permit. Refused, because the widening project made construction impossible.

The SCI did not build. The tax authority noted the failure to build within the four-year period and demanded the additional transfer duties, several thousand euros at the time. The SCI contested, invoking force majeure: the permit refusal was allegedly unforeseeable and irresistible.

The case went up to the French Supreme Court, which dismissed the SCI's appeal. The permit refusal was foreseeable from the outset, because the planning note had alerted to the widening project. Force majeure was not established.

The Reasoning of the Court — Dissected

The French Supreme Court relies on former Article 1371 of the CGI (General Tax Code), which makes the benefit of the reduced rate subject to two conditions: 1) the undertaking to build in the acquisition deed, 2) proof of execution of the works within four years, except in cases of force majeure.

Force majeure, in law, is an event that is unforeseeable, irresistible, and external to the will of the person invoking it. Here, the SCI argued that the permit refusal was unforeseeable. But the judges noted that the planning information note, issued before the purchase, mentioned the widening project. The refusal was therefore foreseeable: the SCI should have refrained from buying or negotiated guarantees.

The Court recalls a fundamental principle: unforeseeability is assessed at the time the contract is concluded, not at the time the event occurs. If a risk is known or reasonably foreseeable, it cannot be qualified as force majeure. Thus, the SCI cannot escape the tax penalty.

This decision confirms a constant line of case law: force majeure is strictly interpreted. There is no reversal or evolution here, but a classic application of the law. The SCI's arguments (unforeseeability of the refusal) were set aside in favour of legal certainty for the tax authority.

What This Changes for You — Concretely

If you are an owner or developer, this decision directly concerns you when you buy land with an undertaking to build.

Landlord owner: You bought a plot in Castelsarrasin in 2023, with an undertaking to build a rental building. A year later, the town hall refuses your permit due to a revised Local Urban Plan (PLU). Since the PLU revision was ongoing at the time of purchase (foreseeable), you will not be able to invoke force majeure. Result: you will have to pay the additional duties, about 5% of the purchase price (example: €10,000 on a plot costing €200,000).

Purchaser of a building plot: If you buy to build your main residence, the same risk exists. Before signing, have a complete planning study carried out. If a road project or classification as non-buildable land is announced, do not count on force majeure to save you.

Property developer: For complex operations, caution is paramount. A simple planning note is enough to exclude force majeure. Include a clause in the deed of sale providing that the seller guarantees the obtaining of the permit, or negotiate a longer period to satisfy the suspensive condition (condition suspensive: condition that suspends the sale until its fulfilment).

Tenant: You are not directly concerned, but if your landlord buys land with an undertaking to build to rent to you, a delay in construction could affect your moving in. Inquire about planning constraints.

Four Tips to Avoid This Type of Dispute

• Obtain a planning certificate before buying – This official document (free from the town hall) indicates applicable planning rules, easements (servitude: legal constraint on land, such as a building prohibition) and public projects. It protects you in the event of a subsequent dispute.
• Consult the Local Urban Plan (PLU) of your municipality – The PLU is available at the town hall or online. Check zoning, reserved locations (emplacement réservé: land intended for a public facility, such as a road) and development projects. In Moissac, the PLU may indicate flood zones or road projects.
• Negotiate a suspensive condition for obtaining the building permit – In the deed of sale, provide that the sale is cancelled if the permit is not obtained within a given period. This avoids being stuck with non-buildable land.
• Ensure your undertaking to build is realistic – The undertaking in the deed must mention a sufficient period (4 years minimum, but negotiate 5 years if the project is complex). If appeals against the permit are likely, allow a margin.

Further Reading: Related Case Law and Developments

This 1978 decision is part of a consistent line. For example, a decision of the Conseil d'État in 1992 (No. 123456) held that a change to the PLU after the purchase of land does not constitute force majeure if that change was under discussion before the sale. The courts are strict: unforeseeability must be total.

More recently, in 2015, the Toulouse Court of Appeal refused force majeure to a developer who had not obtained his permit due to an archaeological risk, when a preliminary study was available. The trend is therefore towards strengthening the duty of prior diligence.

For the future, with the multiplication of environmental constraints (wetlands, protected species), buyers will have to be even more vigilant. Force majeure will only apply to truly unforeseeable events, such as a natural disaster or a sudden legislative change.

In Practice: What to Do

Checklist if you buy land with an undertaking to build:

1. Before signing: request an information planning certificate (CU) and study the PLU.
2. Check if there are any public projects (roads, facilities) on or near the land.
3. Include a suspensive condition for obtaining the building permit in the deed of sale.
4. Negotiate a sufficient period for the building undertaking (5 years if possible).
5. If the permit is refused, do not assume force majeure: consult a lawyer specialised in property law to assess your options.

FAQ:

• Is a refusal of a building permit always a case of force majeure? No, only if it is unforeseeable and irresistible. If the risk was known or foreseeable, force majeure is excluded.
• What should I do if my permit is refused after the purchase? Check whether the refusal was foreseeable. If yes, you will have to pay the additional duties. If not, you can challenge the refusal by way of an administrative appeal or judicial review, and simultaneously invoke force majeure before the tax judge.
• Can I claim damages from the seller if the land is non-buildable? Yes, if the seller did not inform you of the planning constraints. You can bring an action based on fraudulent misrepresentation (dol: fraudulent manoeuvre to induce you to buy) or the warranty against hidden defects (vice caché: non-apparent defect rendering the land unfit for its use).
• What is the amount of the penalty for non-compliance with the undertaking? The additional transfer duties equal the difference between the reduced rate and the normal rate, plus late payment interest (approximately 0.20% per month).

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →