Two-Year Limitation Period for VEFA: When the Seller Loses the Right to Payment of the Balance

Imagine: you bought a flat off-plan in Saint-Malo, delivered three years ago. The developer suddenly claims a balance of €15,000, which you thought was paid. Panic on board? Not necessarily. The Court of Cassation has ruled: for sales of property in a future state of completion (VEFA), the professional seller has only two years to bring an action for payment. After that time, it's over.

This decision of 26 October 2017 (No. 16-13.591) is a small legal bombshell. It applies to real estate professionals the two-year limitation period of the Consumer Code, which protects consumers against late actions. But then, what should you do if you are concerned? And how can you avoid finding yourself in this situation?

The issue is simple: thousands of euros can swing one way or the other depending on whether you are the seller or the buyer. Let's dive into the details with a concrete case.

The facts: a story that happens every day

Mr and Mrs Le Goff, a retired couple from Redon, signed a VEFA contract in 2010 for a detached house in a housing estate near Rennes. The total price was €250,000, payable in several drawdowns as work progressed. In 2012, the house was delivered, and the couple moved in. But the developer, Bâtir Ouest, claimed that a balance of €18,500 remained due, corresponding to additional works not provided for in the contract according to them.

For three years, there were exchanges of letters, formal notices, but nothing worked. The Le Goffs disputed the amount, arguing that the works were included. In 2015, the developer sued the couple before the Rennes High Court (Tribunal de grande instance de Rennes). The court dismissed the developer's claim, holding that his action was time-barred: he should have acted within two years of delivery, i.e., before the end of 2014. The Rennes Court of Appeal confirmed this in 2016.

The developer appealed to the Court of Cassation. He argued that VEFA is a property contract governed by the Construction and Housing Code (Code de la construction et de l'habitation), and that the ordinary limitation period (five years) should apply, not the reduced period of the Consumer Code. But the Court of Cassation dismissed the appeal: Article L. 137-2 (now L. 218-2) of the Consumer Code refers to "the action of professionals for the goods or services they provide to consumers." Now, a VEFA is indeed the supply of a property by a professional to a consumer. No special provision derogates from this two-year period. So, it's two years, full stop.

The reasoning of the court – dissected

The High Court relies on Article L. 218-2 of the Consumer Code (formerly L. 137-2), which provides: "The action of professionals, for the goods or services they provide to consumers, is time-barred after two years." This text is of general scope. It applies to all professionals, regardless of their sector, unless a special law provides for a different period.

For the Court, VEFA is a contract for the sale of a building to be constructed. The seller is a professional (developer, builder), the buyer is a consumer (individual). Nothing in the Construction and Housing Code sets a specific limitation period for the action for payment of the balance of the price. Admittedly, Article L. 261-1 of the Construction and Housing Code defines VEFA, but it says nothing about the time limit for claiming the price. Therefore, the general consumer law applies.

The developer argued that the action for payment of the price is not an action "for the goods or services provided," but an action for performance of the contract. The Court dismisses this argument: payment of the price is the direct consideration for the goods supplied. It is therefore indeed an action relating to the supply of the goods.

This decision is not a reversal. It confirms a protective trend for the consumer, already outlined in earlier decisions (e.g., Civ. 1re, 6 July 2016, No. 15-18.964, for a contract for the construction of an individual house). It simply extends this principle to VEFA.

What this changes for you – concretely

For you, as a buyer of a new home in Saint-Malo or elsewhere, this decision is a protection. If the developer claims a balance more than two years after delivery (or more than two years after the event giving rise to the debt, such as the due date for payment), you can raise the limitation period. Caution: the period runs from the date on which the seller became aware of his claim. In practice, this is often the delivery or the date of the last drawdown.

For the developer, it is a warning: he must act quickly. Do not delay in chasing, sending formal notices, or suing. After two years, the debt is extinguished. Example: a developer from Redon who forgets to claim a balance of €20,000 for 30 months loses all right to that sum. For an operation of 10 units, this could represent a loss of €200,000.

If you are a landlord who bought off-plan to rent out, you are also protected. Even if you are a professional (e.g., SCI), the status of consumer may be retained if you are not a real estate professional. But beware: if you are a property dealer, the two-year period does not apply, because you are not a consumer.

Four tips to avoid this type of dispute

• Keep all documents for at least 5 years. Drawdown requests, delivery minutes, correspondence. In case of a dispute, you will be able to prove the date of the debt and the starting point of the limitation period.
• For developers: send a formal notice as soon as the first default occurs. A formal notice interrupts the limitation period (Article 2244 of the Civil Code). It gives you a new two-year period to bring legal proceedings.
• For buyers: check the date of the last claim. If the developer claims money more than two years after delivery, without having interrupted the limitation period, you can refuse to pay. Have this confirmed by a lawyer.
• Negotiate a contractual limitation clause in the contract. Nothing prevents the parties from reducing the period (e.g., one year), but beware: too short a period may be unfair. It is better to stick to the law.

Further reading: related case law and developments

This decision is part of a protective line. Already in 2016, the Court of Cassation had applied the two-year limitation period to a contract for the construction of an individual house (Civ. 1re, 6 July 2016, No. 15-18.964). Here, it extends the principle to VEFA, which was expected but not yet decided.

Since 2017, the courts have systematically applied this period. For example, the Rennes Court of Appeal, in a judgment of 12 March 2019 (No. 17/08562), held that a developer's action for payment of late payment penalties was time-barred because it was brought more than two years after the due date. The trend is clear: the consumer is king, even in real estate.

In the future, we can expect the two-year limitation period to be extended to other actions by real estate professionals, such as claims for damages for non-conformity. Developers must therefore review their recovery procedures.

In practice: what to do

Checklist for the buyer receiving a late claim:

1. Check the date of delivery (or the last drawdown request).
2. Calculate the time elapsed. More than two years? The limitation period has expired.
3. Consult a lawyer to confirm and draft a letter of reasoned refusal.
4. Do not pay under any circumstances: a voluntary payment may be considered a waiver of the limitation period.

FAQ:

• Does the two-year period run from the signing of the contract? No, generally from delivery or the due date of the balance.
• Can I waive the limitation period? Yes, but it requires an express and unequivocal act. Mere silence is not enough.
• What if the developer sues me after two years? Raise the limitation period in your pleadings. The judge must raise it of his own motion, but it is better to raise it yourself.
• Does this decision apply to sales between individuals? No, because the seller is not a professional. The ordinary limitation period (5 years) applies.

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 →