VEFA: When buying an existing property with works leads to an imposed VEFA

In Doullens, within the jurisdiction of Amiens, a couple had bought an old farmhouse hoping to turn it into a rural gîte. The seller had undertaken to carry out the roofing and insulation. Six months later, the work had stalled, and the buyers were left with an unfinished building. The seller, for his part, maintained that the sale was a classic sale of an existing property, and that the works were merely an obligation of means. This is a situation many property owners know or fear.

The question every buyer asks when buying an older property to renovate: who is responsible if the seller does not carry out the promised works? Who pays for cost overruns? Above all, can the seller be compelled to finish the project? The Court of Cassation has just answered through a judgment of 1 March 2023 (No. 21-20.398).

This decision, rendered by the First Civil Chamber, clarifies that the sale of an existing property can be reclassified as a sale in the future state of completion (VEFA) as soon as the seller undertakes to carry out significant works. Practical consequence: the seller is subject to an obligation of result, and the buyer is protected by a specific, extremely favourable legal regime. Full explanations follow.

The facts: a story that happens every day

Mr and Mrs L., a couple in their thirties, decide to leave Corbie to settle a few kilometres away, in a neighbouring commune. They visit a village house, habitable but dilapidated, sold by the SCI “Le Chêne Vert”, a property sale company. The preliminary sale agreement states that “the property will be delivered after complete refurbishment: roofing, electricity, plumbing, joinery”. The price is global: €250,000. The couple pays a 15% deposit at the signing of the preliminary agreement.

On the day of the notarized deed, the SCI and the buyers sign an act entitled “Sale in the future state of completion”. This contract does not specify whether the works already commenced (the roof has been stripped) are included in the sale price. The SCI undertakes, in the contract, to “carry out the works in accordance with the annexed plans”. Things take a turn for the worse when the works stop abruptly after two months.

The buyers send a formal notice to the SCI to resume the site. The SCI retorts that the existing property was sold “as is”, and that the works merely entail an assistance obligation, not a delivery obligation. The couple sues the SCI before the Amiens judicial court to obtain the resumption of the works and damages. They lose at first instance, with the court considering that the sale of an existing building could not “with certainty” constitute a VEFA. The Amiens Court of Appeal also dismisses them. It is then that they appeal to the Court of Cassation.

The reasoning of the court — dissected

The Court of Cassation quashes the appeal judgment on the basis of Articles L261-1 and following of the Construction and Housing Code (which define VEFA) and Article 1240 of the Civil Code (which requires reparation for damage caused by one's fault). What does the judgment say precisely? The lower judges had considered that the sale of the existing property did not allow a VEFA sale “with certainty”. However, notes the Court, the defendants had never argued that such a sale was impossible. In other words: the SCI itself had not contested that the property, although existing, could be sold under the VEFA regime. It had sold under that regime, and before the courts had never claimed that it was inapplicable. The Court of Appeal had therefore added a condition that the law does not provide for.

More fundamentally, VEFA applies as soon as the seller undertakes to build (or, by extension, to refurbish) a building, and the buyer pays in instalments. Whether the building is wholly existing or partly constructed is no obstacle, provided the works are significant enough to condition the delivery of a completed property. Here, the house was in a sorry state: without a roof, without electricity, without plumbing. The planned works were not mere embellishments but a genuine complete renovation. The contract mentioned “VEFA”, payments were staggered, plans were annexed. All elements were therefore present.

This decision is neither a development nor a reversal: it confirms the constant case law of the Court of Cassation, which repeats that the subject of a VEFA can be a building to be renovated. What is interesting here is that the Court did not have to rule on the classification of the contract: it seems to consider that if the parties chose to sign a VEFA contract, it applies unless the debtor demonstrates a defect in consent or an error of law. Another lesson: the seller cannot, after the event, hide behind the “existing” nature of the property to escape his obligations. He must complete the works.

What this changes for you — concretely

For buyers of older properties to renovate: this decision is a protection. If you have signed a contract entitled VEFA, or even if the contract is called “sale of a building to renovate” but you pay as the works progress, the seller is subject to a delivery obligation. Practically, you will be able to require the resumption of the works, under penalty payment, and obtain damages if the delay causes you harm.

Let us take a simple example, inspired by the situation of the L. couple in Corbie: roof at €60,000, electricity at €12,000, plumbing at €8,000. If the seller abandons the work, you would have to pay those sums yourself. With VEFA, he has the obligation to finish everything. Moreover, the price is paid in instalments according to the progress of the works: you only pay for what is actually done. If the seller does not start, you do not pay.

But beware: the decision does not apply only to individuals. Real estate professionals, such as property dealers, must be careful: if they sign a VEFA contract, they will be responsible for the works, even if the building is already constructed. Notaries also: they must ensure that the chosen classification corresponds to the reality of the project. A notary who drafts a “sale of existing property” when the buyer and seller have agreed on a turnkey renovation could see his liability engaged.

If you are in this situation, you must above all reread your sale deed. Look for mentions of “VEFA”, “delivery”, “payment according to progress”. Then, put the seller on formal notice by registered letter with acknowledgement of receipt to resume the works, giving him a deadline. Within 30 days of the formal notice, you can apply to the interim relief judge to obtain a judicial expert assessment and an advance payment. These procedures cost on average €2,000 to €4,000, but they are often effective. Do not remain passive: inaction can be interpreted as acceptance of the works not being carried out.

Four tips to avoid this type of dispute

• Have an act drafted that conforms to the reality of the project. If the property is to be refurbished, do not hesitate to expressly request the VEFA classification in the preliminary contract. Your notary or lawyer can include a clause providing that the seller undertakes to deliver a completed building, with penalty clauses for each day of delay.
• Check the payment schedule. In a VEFA, calls for funds are regulated: maximum 15% at signature, then according to actual progress (25% when weatherproofed, 25% when airtight, etc.). If you are asked for more, there is a risk of reclassification as a classic sale.
• Require guarantees. In a VEFA, the seller must provide an extrinsic guarantee (a bank stands as surety) or equivalent. Demand this document before signing. It protects you if the seller goes bankrupt before delivery.
• Before signing, carry out a full inventory of condition. List the works to be carried out, with plans, quotes, and execution dates. If possible, engage an independent project manager. This will allow you to subsequently prove the extent of the agreed works. A simple document at the pre-contract stage is often sufficient to establish that the seller was responsible for carrying out everything.
• Find out about the seller. Before signing, ask for his Kbis extract (for a company), his accounts, his legal history. A seller who has been convicted of abandoning a site is a red flag. In Doullens, astute buyers now systematically carry out this check.

Further analysis: related case law and developments

The Court of Cassation has not created new law here. As early as 2016, it had held, in a judgment of the 3rd Civil Chamber, that the sale of an old building with a commitment to major renovation could be reclassified as a VEFA. In 2018, a judgment of the 1st Civil Chamber also specified that payment of the price in several instalments linked to the progress of the works was a characteristic of VEFA, even if the property existed. The judgment of 1 March 2023 therefore fits into this logic.

This case law is explained by a protective objective: to prevent unscrupulous sellers from pocketing payments without ever delivering the property. By imposing VEFA, the courts ensure that the buyer benefits from the guarantee of perfect completion (for 1 year), the two-year guarantee (2 years for equipment) and the ten-year guarantee (10 years for major works). These guarantees do not exist in a classic sale. The trend of the courts is therefore to reclassify “doubtful” sales as VEFA whenever the objective conditions are met.

For the future, we can expect notaries to be more cautious in drafting deeds, and buyers to be better informed. It is likely that the Court of Cassation will be called upon to clarify the notion of “construction works” or “refurbishment”, in particular for buildings requiring heavy renovation but whose structure is preserved. In any event, this decision sheds light on the dividing line.

What you absolutely must remember

Here is an FAQ to help you see clearly:

• Can I buy an older property with a developer who renovates it, without being in a VEFA? Yes, but the deed must specify that the seller only undertakes to carry out works “on behalf of the buyer”, with a simple obligation of means. In that case, the seller will not be obliged to deliver a completed building.
• What happens if my sale contract does not mention VEFA but I have paid in several instalments according to progress? The judges can reclassify the sale as a VEFA if the other indicators are present. Reclassification is not automatic, but the courts are increasingly demanding.
• What are the time limits for acting against a seller who does not finish the works? You have 10 years from the signing of the deed to invoke a failure to deliver, and 10 years for defects covered by the decennial guarantee. In practice, act quickly: put the seller on formal notice within months of the delay.
• How much does a procedure cost to compel the seller to finish? Allow about €2,000 in court costs, plus your lawyer's fees (€2,000 to €5,000 depending on complexity). If you win, Article 700 of the Code of Civil Procedure may reimburse part of the costs.
• What is the role of the notary in this matter? The notary is required to advise the parties. If the VEFA classification is not consistent with the project, he must draw attention to it. If he does not, he may be liable on the basis of his professional responsibility.

Your first reflex should therefore be to consult the deed you signed. If you have any doubt, seek advice from a lawyer specialising in property law. A quick analysis of the contract can avoid years of litigation.

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