Rescission for Lesion: When a Global Property Sale Hides a Legal Trap

Imagine: you own a property in Biarritz, near the Côte des Basques beach. You decide to sell your building to a developer. He signs a single promise to sell, then exercises the option. But the notary, for tax or financing reasons, splits the sale into two separate deeds, executed on the same date. A few years later, you realise you sold well below market price. Can you seek annulment of the sale for lesion (sale at a price less than seven-twelfths of the real value)? The answer from the French Supreme Court is clear: no, if the overall sale arises from a single promise, the lesion is assessed on the whole, not lot by lot.

This decision of 30 June 1999, handed down by the third civil chamber, is a safeguard for buyers and a warning for sellers. It prevents a seller from challenging a sale by arguing partial lesion after having himself accepted an artificial division. But how does this work in practice?

The facts: a story like many others

In April 1991, the Société financière et immobilière (SFIBB) promised to sell a property complex to the company Socavim. On 24 May 1991, Socavim exercised the option by letter addressed to the seller's notary. On 11 July 1991, two sale deeds were signed before the same notary, covering separate lots of the same complex. The single promise was thus executed in two deeds, but everything is linked: same date, same notary, same origin.

Later, SFIBB considered that the overall price was too low and sued Socavim for rescission for lesion (legal action to annul a sale due to a derisory price). It argued that each lot sold should be valued separately, and that for one of them, the price was less than five-twelfths of its real value. The Caen Court of Appeal, on 13 May 1997, dismissed its claim: it held that the sale was global, arising from a single promise, and that the lesion must be assessed on the whole. SFIBB appealed to the Supreme Court.

The reasoning of the court — dissected

The French Supreme Court upheld the Court of Appeal's decision. It relied on Article 1674 of the Civil Code (which allows rescission for lesion of more than seven-twelfths in the sale of immovable property). But above all, it interpreted the parties' intention: the letter of 24 May 1991 and the two deeds of 11 July 1991 are the exact reiteration of the promise of 10 April 1991. There was no novation (transformation of one obligation into another), but merely a split execution for practical reasons. Therefore, the sale is a global property transaction.

The judges rejected SFIBB's argument that each deed should be examined in isolation. Why? Because the division into two deeds occurred after the single promise. Allowing the seller to compare the price of a lot to its individual value would allow him to profit from his own manoeuvre. The Court reminded that the lesion is calculated by comparing the total price paid to the real value of the whole at the date of sale. If the total price is not less than seven-twelfths of the total value, rescission is impossible.

This is a classic application of the principle of unity of sale: when several properties are sold together, the price is global. The decision protects the buyer against attempts by the seller to fragment the sale to create a partial lesion.

What this means for you — practically

For seller-owners: if you sell a property complex in several lots, but the promise is single, you will not be able to challenge the sale by invoking a lesion on only one lot. For example, in Anglet, you sell a building with three flats for €300,000. If the total real value is €400,000, the lesion is only 25%, insufficient to act (more than 58% is needed). But if you had sold each flat separately, one of them could have been undervalued by 60%, entitling you to rescission. The decision prevents you from benefiting from this division if it is artificial.

For buyers: you are protected. If you buy a complex via a single promise, you can rest assured: the seller cannot later challenge the sale by criticising the price of a lot. This is a strong argument in case of litigation. In Biarritz, a developer who buys a building for renovation can sleep soundly, even if the notary breaks the sale into several deeds for financing reasons.

For real estate professionals: be careful when drafting promises. If you wish to allow separate valuation of lots, you must provide for separate promises, with separate option exercises and independent deeds. Otherwise, the global assessment applies.

Four tips to avoid this type of dispute

• Draft separate promises to sell: if you are selling several properties, make one promise per lot, with different option exercise dates. This will avoid any confusion about the global nature of the transaction.
• Get the whole valued before the sale: for a seller-owner, a prior expert valuation of the overall value will prevent you from selling at too low a price. In Biarritz, prices vary greatly by neighbourhood: a professional valuation is essential.
• If in doubt, consult a lawyer before signing: if you are a buyer and the seller offers you a sale split into several deeds, check that this corresponds to an economic reality, not a manoeuvre to circumvent lesion.
• Keep all preparatory documents: the promise, the option exercise letter, exchanges with the notary. In case of litigation, they will prove the unity of the transaction.

Further reading: related case law and developments

This decision is part of a consistent line of the French Supreme Court. In a judgment of 18 February 1998 (No. 95-21.003), it had already held that lesion is assessed in relation to the overall transaction when several sales are concurrent and linked. More recently, in a judgment of 12 September 2019 (No. 18-18.951), the Court specified that the artificial division of a property into several lots by the seller, after the sale, does not prevent the global assessment. The trend is therefore protective of the buyer: judges sanction arrangements aimed at circumventing the lesion rule.

However, caution: if the division is justified by objective reasons (e.g., different buyers for each lot, separate financing), the solution might be different. The 1999 decision does not rule out a lot-by-lot assessment if the sales are truly independent. The key is the unity of the promise and the concurrence of the deeds.

Key points to remember

FAQ:

1. Can I seek annulment of a sale if I sold a building in several lots at too low a price for one lot? No, if the sale originates from a single promise and the deeds are signed on the same day. The lesion is assessed on the total price.

2. What should I do if I am a buyer and the seller threatens a rescission action? Check whether the promise was single. If so, you are protected. Consult a lawyer to confirm.

3. What are the time limits for bringing a rescission action? The action must be brought within two years of the sale (Article 1676 of the Civil Code). After that time, no remedy.

4. Does the decision apply to sales between private individuals? Yes, the principle is general. It applies to any property sale, whether the seller is a professional or a private individual.

5. Can I circumvent this rule by selling the lots on different dates? Yes, if the promises are separate and independent. But caution: if the sales are economically linked, the judges may reclassify the transaction as a global sale.

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