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Construction newsletter | February 2015

11/02/2015

Editorial

Construction operations are complex because of their very nature and may give rise to numerous disputes in relation to the performance of the works and the sharing of the financial burden among the various project participants. Within this context, all of the recent changes made to construction law are dictated by the same concern: to give guarantees to the parties involved in construction operations.

As a case in point, practitioners must inform non-expert project owners about the risks that they incur. Notaries must inform buyers in connection with a sale on completion (VEFA) of the risks of lapsing of the building permit. The project supervisor, which is in charge of monitoring the construction site, must report to the project owner the presence of any undisclosed subcontractors and the need to approve them. Also, the mentions contained in (or absent from) contracts for the construction of individual houses may have material consequences.

Therefore, economic operators must be aware of the legal effects of their commitments. As a case in point, a company guaranteeing the financial completion of a transaction should intervene in the project when the builder, which is undergoing a court-ordered winding-up procedure, is defaulting, and must even oppose the execution of the VEFA sale if the project’s implementation seems to be in jeopardy.

Finally, the Government bill on energy transition aimed at promoting green growth provides for the creation of an “energy performance guarantee”, as part of which energy-related performance flaws would be considered as malfunctions covered by the ten-year warranty (see our focus).

Thus, more than ever, it is necessary to ensure legal certainty as regards any contracts and practices, by taking into account these recent trends.


Focus

Ten-year warranty and energy performance
Since the adoption of the “Grenelle Act”, the improvement of the energy performance of buildings has become an ongoing concern of Government authorities. In that sense, the thermal regulations (RT 2012) are applicable to all buildings in respect of which a building permit application has been filed since 1 January 2013, and this induces new technical constraints.

Construction contracts

Agreement for the construction of individual houses (CCMI)

  • Cass. 3rd Civ., 8 October 2014, no.13-20.294 : consequence of the lack of communication of the descriptive notice
  • Cass. 3rd Civ., 13 November 2014, no.13-18.937 : consequence of the lack of indication of the costs of the works to be carried out by the project owner

Execution of private works contracts

Performance of the sale on completion (VEFA)

  • Cass., Plenary Meeting, 5 December 2014, No. 13-19.674 : VEFA – Necessary verifications by the notary

Construction insurance

Insurance

  • Cass. 3rd Civ., 22 October 2014, No. 13-24.834 : comprehensive construction insurance (TRC)

Building Casualty Insurance

  • Cass. 3rd Civ., 17 December 2014, No. 13-22.494 : person authorised to report a loss

Subcontracting

Covert subcontracting

  • Cass. 3rd Civ., 10 December 2014, No. 13-24.892 : project supervisor’s advisory duty

Statutory liability of builders

Ten-year liability

  • Cass 3rd civ., 7 October 2014, No. 13-19.448 : construction lease agreement – Person authorised to activate the ten-year liability

Other liability theories

Extrinsic completion warranty

  • Cass. 3rd civ., 26 November 2014, No.13-22.863 and Cass. 3rd civ., 26 November 2014, No.13-25.634 : VEFA - Implementation of the extrinsic completion warranty

Read the Construction newsletter | February 2015

Authors

Picture of Aline Divo
Aline Divo
Partner
Paris
Philippe Riglet
Partner
Paris
Jean-Luc Tixier