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Disputes Litigation - French Law
Properties in France can be subject to complicated disputes, especially when you have little or no understanding of French and French law.
Here are two examples of disputes we have assisted clients with:
Seller’s obligations for hidden defects in the sale of French property
If you sell a property in France, you are bound to a warranty against hidden defects that render it unfit for its intended use, or that so impair its use that the buyer would not have bought it, or would only have given a lesser price for it if they were aware of the defects.
If any of the above applies, the buyer can take action against you and request the cancellation of the purchase. Alternatively, they can request a discount and a refund on the price of the sale.
Such substantial defects might include the flooding of the property, damage or leaks related to the sealing of a window or door frame, and unstable ground. The buyer has two years from the discovery of the defect to take legal action and should formally notify you of the discovery of the defect.
As the seller, under the terms of the warranty, you are bound even if you didn’t know about the defect. If it’s proven that you knew of the defect, you are also bound to all the damages that the buyer has suffered and must return the price of the sale.
However, most transfer deeds contain specific and valid provision to void the seller’s liability on hidden defects. Therefore, the only way to obtain the cancellation of the sale or compensation is to prove that the seller knew about the defects, which is usually difficult.
It’s easier to prove the seller’s liability if work was undertaken on the property during the ten years prior to the sale which caused damages to the property. If those works are not mentioned in the transfer deed of the property, then the buyer still has a ground for a claim under hidden defects arising from them.
Starting an action in relation to defects or unsatisfactory works completed on a property is a long and costly process. In France, any action related to defects begins with the Court appointing an expert, who will draft a report for the judges, explaining the origins of the defects and establishing liabilities – a process which takes several months. Once the expert has established his report, another Court then has to determine responsibilities.
If the value of the matter is higher than 10,000 euros, French Courts will require the representation by an “avocat” (equivalent to solicitor) local to the Court and written arguments will be exchanged.
Therefore, it is always advisable to consult a specialist lawyer before you buy a property. However, if a dispute is unavoidable, it’s always better to try to settle in the first place – we can assist in reaching and drafting a settlement. If the matter requires Court proceedings, we can help you find an avocat local to the Court.
We can also assist regarding any contractual breach incurred from unsatisfactory works performed by a contractor on a property in France. In this event, it’s necessary to notify the contractor to rectify the work or to complete it on time. An official letter will be the starting point of the calculation for damages, should any be allocated by a Court.
Issues arising from the allocation of property in a Will
Another source of dispute we frequently encounter relates to property inherited in France.
Unlike the UK, where you can decide freely who will inherit from your estate, French succession law provides that a portion of your estate must pass to your “reserved heirs” being your children or, if none, your spouse. Only an available portion of the estate, depending on the number of children, can be passed to whoever the deceased had chosen.
Therefore, disputes can arise when the value of the assets received from an estate exceeds the available portion of the estate.
A married couple, resident in France, can place all their assets in a common pot (“communauté universelle avec donation au dernier vivant”), often used in order to ensure that the assets are transferred to the surviving spouse automatically rather than be shared with the children on the first death. (However, please note that since January 2019, non resident married couples cannot apply for this regime to apply to their French property).
Providing that the relationships between the children and the surviving spouse are good, this usually does not cause any issues, since the estate will pass to them eventually. However, when the couple opt for this matrimonial regime, the children must be notified and can oppose to it within a specific deadline. However, if children from a previous relationship, things can be more complicated.
If the children were not notified about the change of matrimonial regime, or if any issues arise from such a regime, the French Civil Code provides that the reserved heirs can have a claim against the estate. This is in order to reduce the part of the estate that their parent’s spouse received to the excess of what they should have received according to French law.
The limitation period for bringing an action for reduction is five years from the opening of the succession, or two years from the date that the heirs became aware of the impingement on their reserve, but never in excess of ten years from the date of death.
We always advise to seek an agreement before starting a procedure and can offer guidance during the negotiations. However, sometimes this isn’t possible and court action is required. The jurisdiction of the Court will depend on where the succession was “opened”, usually the last country of residence of the deceased. If they were habitually resident in France, the French Court will have jurisdiction and French law will apply.
Any succession matter brought to court in France requires the representation by an “avocat” local to the Court and there will be some exchange of written arguments. Usually, such procedures are long and complicated, especially when there are foreign “elements” to be considered (such as non-resident beneficiaries). We can help you find a local lawyer and liaise with them on your behalf.
Due to the EU Succession Regulation, “Brussels IV”, English nationals can protect their surviving spouse and beneficiaries from any future complicated action in France. Since August 2015, it’s possible for a person to make a choice of law within a Will to apply to their worldwide estate on death. So, a British national resident in France, for example, can choose the law of England & Wales to apply to their estate and avoid any potential claim in France. However, by doing so, the estate becomes open to claims under the law of England and Wales, such as the 1975 Inheritance (Provisions for Family and Dependants) Act.
These are only two examples out of many disputes that can arise in France. If you have any concerns, please contact us for advice by our French law specialists and our Dispute Resolution team.