Court of Cassation, 3rd Civil Chamber, October 19, 2023, No. 22-15.53
In a ruling dated October 19, 2023, the Third Civil Chamber of the Court of Cassation reaffirmed the principle that a non-professional seller who carries out the work themselves is presumed to be aware of the defects affecting the sold item.
In this case, Property Management Company sold a residential house to a buyer. Complaining about defects, the buyer turned against the seller and sought compensation for his damages based on the warranty against hidden defects.
However, as is typically the case in real estate sales, the sales contract included a clause excluding the warranty against hidden defects. Based on this, the Court of Appeal rejected the buyer's claim for compensation, considering that he had not proven that the Property Management Company was aware of the hidden defect at the time of the sale, and therefore, the Property Management Company as a non-professional seller, was entitled to invoke the exclusion clause.
Nevertheless, the Court of Cassation did not follow the reasoning of the Court of Appeal and ruled that by carrying out the work that caused the defects affecting the sold property, the Property Management Company acted as a builder and should be presumed to have knowledge of the defect.
As a reminder, hidden defects are defined by Article 1641 of the Civil Code as "defects in the sold item that render it unfit for its intended use, or that so diminish this use that the buyer would not have acquired it, or would have given a lower price for it, had he known of them."
The application of the warranty against hidden defects requires the fulfillment of several cumulative conditions:
- the defect must be hidden (in other words, the buyer must not be able to detect it through normal examination of the item at the time of sale);
- the defect must render the item unfit for its intended use;
- the defect must have existed prior to the sale;
- the defect must originate from the sold item.
However, the seller has the option to include an exclusion clause for the warranty in the sales contract. This option is nonetheless reserved for the good faith seller; one who legitimately did not know of the defect at the time of sale.
In this regard, several rulings have established an irrebuttable presumption of knowledge of defects affecting the sold item against the professional seller in sales concluded with a non-professional buyer (consumer or professional not exercising the same specialty). Indeed, for the jurisprudence, the professional seller is presumed to know perfectly well the item they sell, so they cannot evade or limit the legal warranty (e.g., Cass Com, March 19, 2013, No. 11-26.566).
Nevertheless, jurisprudence adopts an extensive view of the concept of "professional seller," equating the occasional seller to a real estate professional, as long as they have acted as such. Thus, in a ruling dated July 10, 2013, the Court of Cassation considered that the hobbyist seller, who had designed and installed a chimney themselves, should be treated as a professional seller presumed to know the construction defects affecting this chimney, even though they had no particular expertise in construction (Cass Civ 3rd, July 10, 2013, No. 12-17.149).
The ruling of October 19, 2023, fits perfectly within the continuity of this jurisprudence, which aims to equate the non-professional seller with the professional seller as soon as they have carried out or had work carried out themselves. Therefore, the seller who carries out or has work carried out must exercise great caution, as the exclusion clause for the warranty against hidden defects will not allow them to escape liability action on this basis.
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