Construction Newsletter | April 2014

Editorial

While we focus here on private construction law, we would like to draw your attention to the new version of the provisions of the French standard administrative terms applicable to public works contracts (CCAG) concerning the payment of the balance of the price (Ministerial Decree of 3 March 2014 amending the Ministerial Decree of 8 September 2009 approving the standard administrative terms applicable to public works contracts, Official Gazette 11 March 2014). This new version is applicable to public procurement contracts in respect of which a call for tenders procedure is initiated or a public call for candidates is sent after 1 April 2014. The time granted to each project participant (contractor, project coordinator and project owner) in order to complete the formalities required for the submission of the final accounts (DGD) is now considerably shortened. If the project owner fails to react on time, a tacit DGD may be prepared on the basis of the amount claimed by the contractor.

You will also note that:

• certain accessibility rules depend on the date on which the construction works have started (and not on the date on which the building permit has been obtained).
• as regards the statutory liability of builders, the recognition of the fact that, because of a thermal insulation defect, works may be found unfit for their intended use appears to be advisable in a context where certain observers have doubts as to the consequences of non-conformance with standard RT 2012.
• as regards the indemnification of defects covered by the ten-year warranty, courts’ pragmatism is reassuring (as regards the need for a provisional production building during the time when the building affected by the defect is being repaired), even though other issues have given rise to more surprising assessments (for instance, as regards the traces of runny paint formations on the façades).

Finally, I recommend to book lovers in general and construction project fans in particular to read (if you have not yet done so) “ Naissance d’un pont ” (Birth of a bridge), a French novel by Maylis de Kerangal published in 2010 (Medicis Prize), translated by Jessica Moore, Talonbooks Limited 2014. This book recounts, most realistically, the project for the construction of a motorway bridge in the imaginary town of Coca, California: a genuine construction site visit – without any helmet or protective clothing! but maybe eyeglasses instead of goggles!

Happy reading!

Jean-Luc Tixier, Partner

Focus

Subcontracting – Reverse charging of VAT
Article 25 of the 2014 Finance Law no. 2013-1278 of 29 December 2013 introduced, in article 283-2 sub-paragraph 9 of the French General Tax Code, a reverse-charging mechanism for value-added tax for construction works carried out in relation to a real-estate property by a subcontracting company (as defined in article 1 of Law no. 75-1334 of 31 December 1975) on behalf of a VAT-registered principal.

Construction contracts

Termination of a construction contract for an individual house

• Cass. 3rd civ., 12 February 2014, no. 12-28.9022

Execution of private works contracts

Student residences and aparthotels – Disabled access conditions

• Decree no. 2014-337, 14 March 2014, Journal Officiel 16 March 2014 Ruling of 14 March 2014, Journal Officiel 16 March 2014

Retention guarantee – Condition of its automatic release

• Cass. 3rd civ., 18 December 2013, no. 12-29.472

Construction insurance

Structural damage insurance – Impossibility of excluding component parts

• Cass. 3rd civ., 18 December 2013, no. 13-11.441

Scope of 10-year liability cover – Construction of a temporary building

• Cass. 3rd civ., 15 January 2014, no. 11-28.781

Construction insurance – Supervision of proceedings

• Cass. 3rd civ., 29 January 2014, no. 12-27.919

Insurance (general points) – False declaration by the insured party

• Cass. combined chamber, 7 February 2014, no. 12-85.107

Contractors’ legal liability

10-year liability cover – Thermal insulation problems

• Cass. 3rd civ., 8 October 2013, no. 12-25.370

Contractual liability – Aesthetic problems

• Cass. 3rd civ., 14 January 2014, no. 11-25.074
  

Read the Construction newsletter | April 2014