Bulk Sale of Condominium Lots: Even a Minor Shortfall Entitles the Buyer to a Price Reduction

You have just purchased a commercial unit in Saint-Amand-Montrond. The seller offered you a "bulk lot": three cellars and a garage, all for €80,000. You sign, delighted. But on measuring, you discover that the garage is 12 m² instead of the promised 18 m². Can you claim a price reduction? Until this decision of the Cour de cassation of 28 March 2007, the answer was unclear. Now it is clear: yes, even for a bulk sale, Article 46 of the 1965 Law protects the buyer.

Imagine for a moment: you are a homeowner in Bourges, you buy a set of condominium lots — a flat and a cellar — for a single price. The seller assures you that the total floor area is 60 m². After an expert survey, you find it is only 55 m². What to do? The Carrez Law (Article 46 of the Law of 10 July 1965) requires the seller to state the private floor area in the preliminary contract, on pain of penalties. But when it comes to a bulk sale of several lots, some judges considered that a single price prevented any calculation of a reduction. The Cour de cassation put an end to this restrictive interpretation.

This decision is a victory for buyers. It secures transactions and obliges sellers to be precise, even when they sell several properties at once. For professionals and individuals alike, it is a reminder: the stated floor area must be accurate, lot by lot, or else a price revision should be expected. Let us delve into the details of this case.

The facts: a story like those that happen every day

In 2004, the company WBBSM, a Parisian developer, bought from the company Poroux Paris (formerly Lecocq et compagnie Garage Saint-Marcel) a set of condominium lots in the 13th arrondissement of Paris. The sale covered several lots: cellars, garages, and a commercial unit. The whole was sold "in bulk" for a single price of €450,000. The deed of sale stated a total floor area of 200 m², but after acquisition, WBBSM had it measured. Result: the actual floor area was 185 m², a difference of 15 m² (7.5% less).

WBBSM then sued its seller before the Tribunal de grande instance of Paris to obtain a proportional reduction in price for the shortfall, on the basis of Article 46 of the Law of 10 July 1965. This article provides that if the floor area is more than 5% less than that stated in the deed, the buyer may demand a price reduction. The Paris Court of Appeal, in a judgment of 12 January 2006, dismissed WBBSM's claim. Why? The appeal judges considered that since the lots were sold in bulk for a single price, and they did not constitute a single property unit, it was impossible to calculate a price reduction for each separable lot. In other words, in their view, a bulk sale fell outside the Carrez Law.

WBBSM appealed to the Cour de cassation. The question put to the Cour de cassation was: does Article 46 of the 1965 Law apply to a sale covering a set of condominium lots sold in bulk? The answer is yes, and the Court quashed the appeal judgment. For the Court, the fact that the lots were sold together does not exclude the application of the text. The buyer can therefore obtain a price reduction calculated proportionally to the missing floor area, even if the price is global.

The reasoning of the court — dissected

The Cour de cassation relies on Article 46 of Law No. 65-557 of 10 July 1965 establishing the status of co-ownership of built buildings. This article, in its version then in force, requires the seller of a condominium lot to indicate the floor area of the private part in any deed of sale. If the actual floor area is more than 5% less than that stated, the buyer may demand a proportional reduction in price. The text does not distinguish according to whether the sale concerns a single lot or several lots sold in bulk.

The judges of the Cour de cassation consider that the Court of Appeal violated this text. Their reasoning is simple: the law does not provide any exception for bulk sales. It does not matter that the lots do not constitute a single property unit and that the price is global. As soon as the stated floor area is incorrect and the discrepancy exceeds 5%, the buyer is entitled to a reduction. The calculation is made pro rata to the missing floor area in relation to the total stated floor area, applied to the total price.

The Court of Appeal had argued that the single price made any calculation of reduction impossible for separable lots. But the Cour de cassation sweeps aside this argument: the calculation is perfectly possible by taking the ratio between the missing floor area and the total stated floor area. For example, if the total stated floor area is 200 m² for a price of €450,000, and the actual floor area is 185 m² (i.e., 15 m² less), the reduction is (15/200) x 450,000 = €33,750. Nothing simpler.

This decision confirms a previous case law favourable to buyers. It is not a reversal, but a welcome clarification. The lower courts had tended to interpret Article 46 restrictively for bulk sales. Now they must apply it fully. The lesson is clear: whether you sell one lot or ten, the floor area must be accurate, on pain of having to refund part of the price.

What this means for you — concretely

If you are a buyer of a set of condominium lots (for example, a flat with a cellar and a parking space in Bourges), and the actual total floor area is more than 5% less than that stated in the deed, you can demand a price reduction. The calculation is proportional: (missing floor area / stated floor area) x total price. For example, for a purchase at €200,000 with 10 m² missing out of 100 m² stated, you can claim a reduction of €20,000.

For sellers, this decision is a warning. Do not think that by selling in bulk you escape the Carrez Law. You must accurately measure each lot and indicate the total floor area. If you sell a single lot, the floor area must appear in the deed. If you sell several lots, even at a global price, the total floor area must be accurate. An error of more than 5% exposes you to an action for price reduction, or even damages if you acted in bad faith.

For real estate professionals (agents, notaries, developers), this case law imposes increased vigilance. In a bulk sale, check the floor areas of each lot and have them measured by a professional. State the total floor area in the preliminary contract and the notarial deed. If you omit this mention, the buyer can demand nullity of the sale or a price reduction, even if the omission is less than 5% (the penalty is then different).

A concrete example: in Bourges, an investor buys a block of flats consisting of 5 flats and 5 cellars, sold in bulk for €800,000. The preliminary contract states a total floor area of 400 m². After an expert survey, the actual floor area is 380 m². The buyer can obtain a reduction of (20/400) x 800,000 = €40,000. Without this decision, the buyer would have been dismissed.

Four tips to avoid this type of dispute

• Have it measured before signing: Before any purchase, require a floor area survey by a certified professional. For a bulk sale, have each lot measured and add up the floor areas. This costs between €100 and €300, but can save you months of litigation.
• Insist on a floor area clause in the preliminary contract: Ensure that the deed of sale mentions the total floor area of the lots sold, even for a bulk sale. If the seller refuses, be wary. The law protects you, but prevention is better.
• In case of error, act quickly: The action for price reduction is time-barred one year from the signing of the notarial deed. After this period, you lose your right. If you discover a discrepancy, consult a lawyer immediately.
• Keep all documents: Keep the preliminary contract, the notarial deed, the surveys, the plans and the correspondence with the seller. These elements will be crucial to prove the stated floor area and the error.

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Further information: related case law and developments

This decision is part of a line of protection for buyers. Already in 2005, the Cour de cassation had held that Article 46 applies to the sale of a single lot, even if the lot is sold with an exclusive right of use (Civ. 3e, 9 March 2005, No. 03-20.180). The 2007 decision extends this protection to bulk sales. Since then, case law has continued to clarify the contours of Article 46. For example, the Court held that the seller cannot avoid his obligation by stipulating that the buyer waives his right (Civ. 3e, 14 January 2009, No. 07-21.832).

The courts are now very strict. They do not hesitate to annul clauses that attempt to circumvent the law. The trend is towards maximum protection of the buyer, considered the weaker party in the transaction. For professionals, this means that they must be irreproachable on floor areas. An error, even unintentional, can be costly.

For the future, one can expect the Cour de cassation to extend this logic to other types of sales, such as sales of buildings to be built or sales of condominium lots with common parts. The important thing is to remember that the Carrez Law is a matter of public policy: it cannot be derogated from by contract. If you are a seller, do not try to circumvent the rule. If you are a buyer, know that you are protected.

Frequently asked questions

Can I demand a price reduction if the floor area difference is less than 5%?
No, Article 46 provides for a reduction only if the discrepancy is more than 5%. Below that, you cannot act on this basis. You may, however, invoke a defect of consent or fraud if the seller deliberately misled you.

What happens if the seller does not mention any floor area in the deed?
The absence of a mention of floor area is a violation of the law. You can demand nullity of the sale or a price reduction, even if the actual floor area is correct. The time limit to act is one year from the deed.

Does the calculation of the reduction apply to each lot individually or to the whole?
For a bulk sale, the calculation is made on the total stated floor area in relation to the total actual floor area. The reduction is proportional to the global price. It is not necessary to break it down lot by lot.

Do I have to go through a lawyer to obtain a price reduction?
No, but it is strongly recommended. A lawyer specialised in property law can help you build a solid case, negotiate with the seller, and if necessary, bring legal proceedings. Lawyers' fees are often recoverable if you win.

Does this decision apply to sales between private individuals?
Yes, Article 46 applies to all sales of condominium lots, whether the seller is a professional or a private individual. The same rules apply to everyone.

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