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