Property sale: when the notary incurs liability for failure to verify

You have signed a preliminary contract for a flat in Pessac. Everything seems in order: the notary is appointed, the loan deadlines are set. But before the final deed, you learn that the developer has mortgaged the entire building, including your unit, to secure another loan. Your purchase is compromised, your deposit is at risk. What can you do? Who can you hold responsible?

This question, critical for any buyer, finds a clear answer in a judgment of the French Court of Cassation dated 5 October 1971. The judges ruled: the notary who executes loan and mortgage deeds without checking the preliminary contracts already deposited in his office commits a professional fault. He incurs civil liability (the obligation to compensate for damage caused by his fault) towards the excluded buyers.

In this article, I recount the facts of this case, analyse the judges' reasoning, and give you practical tips to protect yourself. Whether you are a property owner in Langon, a buyer in Bordeaux, or a real estate professional, this decision concerns you.

The facts: a story that happens every day

Imagine a property developer in the late 1960s. He launches the construction of a block of flats in Bordeaux. He quickly finds buyers, collects the price of the units, and preliminary contracts under private signature (a pre-contract signed between seller and buyer, without going to the notary) are drawn up by the notary of the time. These preliminary contracts are deposited at the notary's office.

But the developer needs cash. He takes out a loan from a bank, and to secure this loan, he grants a mortgage (a real security over immovable property) over the entire building of the company — including the flats already sold by preliminary contract. The notary executes this loan and mortgage deed.

Problem: the buyers, who had signed their preliminary contract in due form, find themselves with a flat encumbered by a mortgage to which they did not consent. Some will not be able to obtain their mortgage loan, others will see their sale cancelled. They sue the notary, alleging that he failed to check that the flats had already left the developer's assets (i.e., been sold) before agreeing to mortgage the building.

The case goes up to the Court of Cassation. The buyers seek compensation for the damage suffered: loss of the flat, expenses incurred, disturbance of enjoyment. The notary argues that he did not have to check the state of sales, that his role was limited to executing the loan and mortgage. But the Court does not accept this argument.

The reasoning of the court — analysed

In its judgment of 5 October 1971, the Court of Cassation overturns the decision of the Court of Appeal which had upheld the notary. It relies on Article 1240 of the Civil Code (then Article 1382), which states: "Any act of a person which causes damage to another obliges the person by whose fault it occurred to compensate it." In plain language: if you make a mistake that harms someone, you must compensate them.

The judges' reasoning is relentless. The notary knew — or should have known — that preliminary contracts had been signed and deposited at his office. These preliminary contracts had already removed the flats from the seller company's assets: legally, the units no longer belonged to the developer, but were "sold" subject to a suspensive condition (the obtaining of loans). By agreeing to execute a loan with a mortgage over the entire building, the notary therefore mortgaged property that was no longer owned by the borrower. This is a fault.

The Court specifies that the notary, as a public officer, has a duty to inform and to be vigilant. He must verify the nature of the property and the rights of the mortgagor (the person granting the mortgage). If he had consulted the preliminary contracts deposited in his own office, he would have noticed the incompatibility. By failing to do so, he breached his duty to advise and incurs delictual liability (liability arising from fault, independent of a contract).

This judgment confirms earlier case law: the notary is not a mere drafter of deeds; he is the guardian of the legal security of transactions. He must anticipate conflicts of interest and hidden defects. The judges reject the notary's argument that he was not a party to the preliminary contracts: he had received them, he knew about them, he should have acted accordingly.

What this means for you — practically

This decision has direct consequences for all real estate stakeholders. If you are a buyer and you sign a preliminary contract, you can rest assured: the notary who executes subsequent deeds (loan, mortgage) must respect your rights. If a developer tries to mortgage your unit after the preliminary contract, the notary is at fault and you can claim compensation. Practically, this means you can claim damages for loss of opportunity to acquire the property, notarial fees incurred, and even the difference in price if the market has risen.

For a landlord owner in Langon selling a building, be careful: if you have signed preliminary contracts for units, you can no longer mortgage the building without informing the buyers. The notary will remind you of this. In case of a dispute, the notary will be the first line of defence, but you could also be sued for fraud (deceitful manoeuvre) if you hid the preliminary contracts.

For real estate professionals (agents, developers), this case law imposes absolute rigour in tracking sales. Do not rely on the notary to check everything: you must inform him of each signed preliminary contract. A Bordeaux developer who fails to declare a sale to his notary risks an action for contractual liability (breach of his duty to inform).

A concrete example: imagine a buyer in Pessac who pays a deposit of €50,000 and signs a preliminary contract in March. In June, the developer mortgages the building for a loan of €2 million. The buyer cannot obtain his bank loan because the existing mortgage blocks financing. He loses his flat and his expenses. Under the 1971 judgment, he can sue the notary and obtain €50,000 in damages, plus notarial fees (about €3,000) and moral damages assessed at €5,000. That is nearly €60,000 in compensation.

Four tips to avoid this type of dispute

• Require an up-to-date mortgage certificate before signing the preliminary contract. Ask your notary to consult the land registry to check that no mortgage encumbers the property. This will cost you about €30 but will save you months of proceedings.
• Have a mention of your preliminary contract registered at the land registry. Since the ALUR law of 2014, it is possible to publish a preliminary contract to make it enforceable against third parties (especially mortgage creditors). Discuss this with your notary as soon as you sign.
• Never pay the price before the final deed without a guarantee. If the seller requires a deposit, ensure it is held by the notary and not paid directly to the seller. In case of default, you will be able to recover your funds more easily.
• If in doubt, seek quick legal advice. If you learn that a mortgage has been granted after your preliminary contract, do not delay: apply to the interim relief judge to establish the notary's fault and obtain protective measures (e.g., attachment of the mortgage). The limitation period is 5 years from the discovery of the damage.

Further reading: related case law and developments

The 1971 judgment is part of a consistent line of authority. The Court of Cassation had already held, in a judgment of 4 February 1969 (No. 67-10.123), that the notary must verify the extent of the seller's rights before executing a sale. Here, the principle is extended to mortgages and loans. Later, the judgment of 15 December 1998 (No. 96-21.299) clarified that the notary incurs liability even if the buyer has not suffered material damage: the mere fact of having been exposed to a risk is sufficient.

The trend of the courts is clear: the notary is a legal professional, bound by an obligation of result in terms of legal security. He cannot hide behind the absence of instructions from his client. Today, with digital files and databases (Land Registry, Land Register), verification is even easier. Judges are therefore even more demanding. In the future, we can expect notaries' liability to be strengthened in case of failure to check the property's history, especially in troubled condominiums.

Checklist before taking action

Are you in a similar situation? Here are the questions to ask yourself:

• Did I sign a preliminary contract before the mortgage was granted? If yes, the notary is at fault. Gather all documents: preliminary contract, correspondence with the notary, mortgage deed.
• Did the notary inform me of the risks? Check his correspondence. If he said nothing, his liability is engaged.
• What is my damage? Calculate: lost deposit, notarial fees, moving expenses, price difference if you had to buy elsewhere for more, moral damages.
• Should I act quickly? Yes, the limitation period is 5 years from the discovery of the damage. Consult a lawyer specialising in property law without delay.
• Can I obtain compensation without a trial? Sometimes, a formal notice sent to the notary and his professional insurer is enough to reach a settlement. But if the insurer refuses, you will have to bring proceedings before the tribunal judiciaire.

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