Decennial Liability or Latent Defect: The Choice for the Seller-Builder

Imagine: you have just bought a house in Dax, built five years ago by a local developer. A few months after moving in, cracks appear on the load-bearing walls. You contact the seller, who tells you that the decennial liability period (10 years after completion of the works) has expired. But is that the only possible route? The question every owner facing a hidden defect asks is simple: can I take another course of action? The Court of Cassation answered in the affirmative in a judgment of 17 June 2009, stating that the decennial liability action is not exclusive of the action for latent defects under the Civil Code. In other words, you have a choice between two legal weapons. But you must understand the subtleties of each.

The Facts: A Story That Happens Every Day

Mr Z, owner of a building in Parentis-en-Born, had a dwelling house constructed by a builder. After completion, he sold it to Mr and Mrs Y. A few years later, the purchasers discovered significant defects: recurring water infiltration and structural cracks. They sued Mr Z, relying on both decennial liability (Article 1792 of the Civil Code, which covers damage compromising the solidity of the structure or rendering it unfit for its purpose for 10 years) and latent defects (Article 1641 of the Civil Code, which allows the sale to be annulled or a price reduction obtained if the property has a hidden defect making it unfit for its intended use). The Bordeaux Court of Appeal dismissed their claim based on decennial liability, finding that the 10-year period had expired, but upheld the existence of a latent defect. Mr Z appealed to the Court of Cassation, arguing that decennial liability is exclusive of any other action, and that the seller can only be sued for latent defects if he knew of the defect (Article 1643 of the Civil Code). The Court of Cassation had to decide: can the two guarantees be combined? The answer is no, but they can be chosen.

The Reasoning of the Court — Analysed

The Court of Cassation, in its judgment of 17 June 2009, dismissed Mr Z's appeal. It held that "when a person sells, after completion, a building they have constructed or had constructed, the decennial liability action is not exclusive of the ordinary law action for latent defects under Article 1641 of the Civil Code." In clear terms, a builder-seller can be sued on the basis of latent defect, even if the decennial liability is no longer available or is excluded. However, the Court specifies that the seller is only liable for latent defects if he knew of the defect (Article 1643 of the Civil Code). But in this case, Mr Z, as a builder, was presumed to know of the construction defects (this is a presumption of knowledge because he participated in the construction). What few people know is that this decision confirmed earlier case law (Cass. civ. 3e, 20 March 2002, No. 00-18.849), but clarified it: the two actions cannot be combined, but the purchaser can choose the most favourable route. undefined, I have encountered cases where owners in Mont-de-Marsan had lost the decennial liability for apparent defects, but could still bring a latent defect action. In other words, this decision considerably expands the remedies available to the purchaser.

What This Changes for You — Practically

If you are a purchaser of a recent property, you now have two strings to your bow. Concrete example: in Parentis-en-Born, a couple buys a villa built by a developer in 2015. In 2020, cracks appear. The decennial liability is still valid (10 years from 2015). But if the developer argues that the defect was apparent (e.g., a crack visible at the time of purchase), the decennial action could be excluded. Thanks to this judgment, they can turn to the latent defect guarantee, which is not subject to a fixed time limit (but must be brought within a "reasonable time" after discovery of the defect, generally 2 to 5 years depending on the judges). If you are a seller-builder, you must be vigilant: you are presumed to know of the construction defects. This means you cannot escape liability by claiming ignorance. A tip: have a full technical inspection carried out before the sale, or include a clause excluding latent defect liability (but be careful, this clause is prohibited for professional sellers). For tenants, this decision has no direct impact, but if your landlord is also a builder, you could rely on it to obtain repairs. In summary, if you are in this situation, you must act quickly and consult a lawyer to choose the best course of action.

Four Tips to Avoid This Type of Dispute

• Use a technical expert before the sale: Whether you are a seller or buyer, an inspection by a control office (such as SOCOTEC) can reveal potential latent defects. Cost: €500 to €1,500, but it can save you a lawsuit.
• Keep all construction documents: Plans, invoices, completion reports, guarantees. In the event of a dispute, these documents are essential to establish the date of construction and the nature of the defects.
• Do not delay in taking action: If you discover a defect, do not let time pass. The decennial liability runs from the completion of the works, and a latent defect action must be brought promptly after discovery. A period of 2 to 5 years is generally accepted, but it is better to consult within months.
• Draft the sale deed carefully: If you are a seller, specify any apparent defects and include a limited warranty clause (subject to your professional status). If you are a buyer, only agree to an exclusion of latent defect liability if the seller is a private individual who is not a builder.

Further Reading: Related Case Law and Developments

This judgment is part of a jurisprudential trend favourable to purchasers. As early as 2002, the Court of Cassation had held that decennial liability did not exclude an action for ordinary contractual liability (Cass. civ. 3e, 20 March 2002, No. 00-18.849). The 2009 decision confirms and clarifies this principle for latent defects. More recently, the Court has reiterated that a professional seller is presumed to know of defects (Cass. civ. 3e, 11 May 2017, No. 16-13.472). In other words, the protection of the purchaser is strengthening. For the future, we can expect courts to become increasingly demanding towards builder-sellers. If you are a property professional, you must incorporate this risk into your contracts and insurance.

Checklist Before Taking Action

• Have I discovered a latent defect? A defect that renders the property unfit for its intended use (e.g., water infiltration making a bedroom uninhabitable) or significantly reduces its value. The defect must pre-date the sale and not be apparent at the time of purchase.
• What time limit applies? Decennial liability: 10 years from completion of works. Latent defect: no fixed time limit, but act within 2 years of discovery to be safe.
• What is the status of the seller? If they constructed or had the property constructed, they are presumed to know of the defect. If they are a private individual, you must prove they knew of the defect.
• Which action is most advantageous? Decennial liability allows you to obtain compensation without proving the seller's knowledge. Latent defect allows annulment of the sale or a price reduction, but requires proof of knowledge if the seller is not a builder.
• Should I consult a lawyer? Yes, because the choice of route and the strategy for evidence are complex. A 30-minute consultation with Maître Zakine (€45) can guide you.

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