Builder's liability is based on a solid foundation of legal and contractual guarantees aimed at ensuring construction quality, protecting project owners, and preventing structural defects.
The term “builder” refers to anyone involved in the construction process, including construction companies, architects, technical design offices and safety coordinators. According to Article 1630 of the Monegasque Civil Code, builders are automatically liable to the project owner for ten years from the acceptance of the work.
Builders, whether they are structural engineering companies, architects or design offices, are bound by specific obligations. Failure to fulfil these obligations can result in serious liability, especially in a territory as small as Monaco, where every square metre represents high economic value and strict technical tolerances are required. Consequently, case law tends to reinforce the builder's obligation to achieve a specific result and penalise breaches of best practice.
The legal liability regime for builders : the ten-year guarantee.
Ten-year liability is undoubtedly the best known and most onerous of the liabilities incumbent on the builder. It covers damage that compromises the solidity of the structure or renders it unfit for its intended purpose for ten years after acceptance of the work. This liability is automatic, meaning the builder can only be exempted by proving an external cause, such as force majeure or the project owner's fault.
This liability applies not only to new buildings, but also to old structures that have undergone major renovation or restructuring work.
While Monegasque law does not require builders to take out ten-year insurance to cover their liability, it is strongly recommended that they do so to protect both themselves and the owners against major construction defects that appear after completion of the work.
In practice, it is common to take out a 'Globale Chantier' policy. This policy covers construction defects and thus offers peace of mind.
However, builders are not automatically released from all liability at the end of the ten-year period.
Recently, inspired by French case law, the Court of First Instance recognised builder liability after the ten-year warranty had expired, based on common law contractual liability in cases of fraudulent misconduct resulting in particularly serious consequences.
This case law represents a significant development and will provide better protection for property owners in Monaco.
Specific contractual solutions
To compensate for legal shortcomings, it is possible to draw inspiration from similar legislative provisions and contractually regulate the builder's liability.
Inspired by French law, a warranty known as a “proper functioning” warranty can be stipulated, which requires the builder to repair or replace any equipment that can be separated from the building (e.g. doors, shutters, intercoms and boilers) for a certain period of time in the event of malfunction.
Similarly, a guarantee of perfect completion obliges the builder to repair any defects reported by the client, whether apparent on acceptance or reported in writing within a specified period. Naturally, this should not cover damage resulting from poor maintenance or misuse by the occupant.
Are there other grounds for liability?
Apart from guarantees specific to construction operations, the builder may also be held liable under common law, particularly if they fail to meet deadlines, technical standards or specifications. Any wrongful non-performance could result in civil penalties, such as enforcement, termination of the contract, compensation or late penalties.
This highlights the importance of being particularly vigilant when drafting the construction contract and ensuring that the proposed clauses are effective.
Additionally, the builder may be held liable in tort for damage caused to third parties (e.g. neighbours, passers-by, or neighbouring property owners) during or after the works. However, the Monegasque courts are reluctant to recognise the existence of abnormal neighbourhood disturbance due to a construction site.
Additional obligations
In Monaco, the builder is also subject to specific obligations:
- Compliance with technical and environmental standards, particularly in terms of safety, insulation and structural integrity.
- Obtaining administrative authorisations from the relevant authorities (e.g. for construction site installation and waste management);
Failure to comply with safety standards or urban planning regulations may result in administrative and civil penalties.
