Guarantee of defects and defects in the sale of building to be constructed
by Lex Thielen. (1)
I. Scope
Recall the conditions necessary for the specific legislation on the sale of a building to be constructed to apply: it must be a residential or professional building and residential, the seller has reserved the powers of the owner of the work and that payments or deposits are made by the l buyer even before completion of construction.
With regard to the case of condominiums, the special guarantee scheme of the developer applies to any immovable in which at least one lot has been the subject of a forward sale or a sale in the future state completion.
II. Disorders that can give rise to warranty: apparent defects, latent defects, lack of conformity
The construction defect is a defect in the technical quality of the building or one of its essential equipment and which reduces or destroys the use for which it is intended. We must distinguish between apparent defects and hidden defects.
Obvious defects are those that are visible at the time of delivery as well as those that a moderately diligent layman should be able to detect by performing a basic inspection.
The hidden defect is the one that can not be detected at first glance, either that it is not visible at the moment of the delivery of the building, or that it manifests itself only later.
There is a lack of conformity when the delivered object does not correspond, in part or in full, to what has been agreed, without presenting a technical defect. It can concern the materials, surfaces or equipment, the quantity or the quality, even the appearance of the object.
III. Warranty deadlines
1. Obvious defects
The purchaser may not grant a discharge to the seller, nor before the receipt of the work by the purchaser, nor before the expiry of a period of one month after the taking possession by the purchaser, for the vices of construction then apparent. Such a discharge would be void.
The limitation period for apparent defects was one year until 1987. During a legislative reform on the legal protection of the consumer this provision has been abolished - inadvertently it seems! Since then the purchaser has the common law period of 30 years, but because of Article 189 of the Commercial Code this period is reduced to 10 years when it comes to a professional seller.
Unlike the sale of common law of a building, in the matter of sale of building to be built, the apparent defect does not need to be denounced at short notice.
An unreserved receipt of the real estate object by the purchaser obviously leads to recognition of apparent defects, the purchaser can no longer claim it afterwards.
Proof that it is an apparent defect and not a hidden defect is the responsibility of the seller, the buyer having only to establish the existence of the defect, its hidden character being presumed.
2. Hidden defects
For hidden defects, the principles of the promoter's guarantee are as follows:
- 2 years for the small books
- 10 years for large structures that compromise the solidity of the building or make it unfit for the use for which it is intended.
The warranty period and the action period are identical in both cases. The possible action of the purchaser must therefore be brought before the expiry of this period of 2 or 10 years, it is not sufficient that the defect is manifested before that date.
- On the other hand, for large works that do not compromise the solidity of the building or render it unsuitable for the use for which it is intended, the law on the sale of building to be built does not provide for a specific period. Common law is therefore applicable which provides for a warranty period of 30 years; however the warranty is limited to 10 years when it comes to a professional seller having the quality of trader, which is almost always the case. In addition, the purchaser must promptly denounce the defect and bring an action within one year from the denunciation.
3. The lack of conformity
In the absence of specific legal provisions concerning buildings to be constructed such as those that exist for defects in construction, the lack of conformity remains subject to common law, as in the ordinary sale of a building.
The purchaser thus benefits for the defects of conformity of a guarantee and a period of action of 30 years (10 years with regard to the promoter-seller having the quality of merchant).
For lack of conformity, in the absence of any specific provision, the warranty period runs from the delivery of the item, ie. from the delivery of the keys, not from the reception as it is the case for the defects of construction.
IV. Whose responsibility is the guarantee of the disorders?
The Civil Code provides that the seller, in this case the real estate developer, is the guarantor of the purchaser, not the architects, contractors and other trades who built the building. Nevertheless, the purchaser can directly operate these professionals to put their responsibility at risk if he prefers.
If the immovable object in question has already been resold, the action for liability for latent defects can not be exercised by the successive purchasers against those who have in the meanwhile been able to buy and resell the immovable. Only the original seller - the promoter - is in this case bound by the guarantee.
V. Starting point of the guarantee period
In the case of apparent defect, the limitation period for an action against the seller begins to run from the date of expiry of the later of the two periods before which the discharge is not possible (we have seen that it is prohibited before the acceptance of the work by the purchaser and before the expiry of a period of one month after the taking possession by the purchaser), if the purchaser does not grant this discharge.
For hidden defects, the warranty period runs from the receipt of the real estate object by the purchaser.
This is exclusively the receipt made by the buyer with the developer and not from that made by the developer with an expert, the architect, the contractor or a trade. A reception between the promoter and an expert or another person, made in the absence of the purchaser, respectively the syndicate of co-owners, is not opposable to them. (2)
Such a reception is however for the promoter in case he wants to make his own guarantee against the architect, the contractor or a trade.
It should be noted that the acceptance by the buyer does not need to be express, but may be tacit, eg if the buyer pays the balance of the price without reserve or moves into the completed construction. It is different if the buyer moves in when the construction is not finished yet.
In the matter of co-ownership it was judged that the reception of the entire residence could not be done by the occupation of a single apartment (3) . This is logical because an individual co-owner can not receive the common areas for the entire syndicate of co-owners. Contrary to popular opinion, the deadline for the guarantee of the common parts does not therefore run from the time of delivery of the 1st apartment.
There is no difference between the ten-year guarantee and the two-year guarantee regarding the starting point of the guarantee, which is always the date of receipt. As long as there has been no receipt - express or tacit - the time to bring an action does not begin to run.
If the sales contract or the co-ownership regulation provides for a reception procedure, this procedure must be followed. Even if nothing is planned, the purchaser always retains the right to demand a contradictory reception with the promoter.
Finally, for the lack of conformity, in the absence of specific provision the warranty period runs from the delivery of the object, ie. from the handing over of the keys.
VI. The terms of the repair
With regard to the repair of the defects which fall under the special legislation of the sale of building to be built - apparent vice, hidden defect in case of small work or large works which compromise the solidity of the building or which render it unfit for the use for which it is intended - the Civil Code provides that the seller may oblige himself to repair the defect in kind - if such a repair in kind is possible. This consists of either a replacement or a restoration of the defective item.
In this case the buyer can not ask for the cancellation of the sales contract or a reduction of the price. These are possible only if the seller refuses the repair in kind, if it is impossible or if the seller takes too long to proceed. (4)
The same right to demand compensation in kind belongs to the purchaser, provided that such compensation is possible and reasonable. Execution in kind includes the possibility for the purchaser, in case the seller refuses, to be authorized to charge another company, at the expense of the seller.
On the other hand, the legislation on the sale of buildings to be constructed does not provide for any special provision for the repair of non-conformities. Here then applies the common law: forced execution of the obligation to deliver a conforming object or resolution of the contract with the appropriate damages.
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1 - Lex Thielen is a lawyer at the Court and author of the books "The professions of real estate in Luxembourg law", Editions Larcier, 2010, "The lease contract", Editions Promoculture / Larcier 2013, "All about real estate ", Editions Promoculture / Larcier (1st edition 2015, 2nd edition November 2016) and" Immobilienrecht in Luxemburg, einfach erklärt "Editions Promoculture / Larcier 2016. This article has already been published in issue 65 - March 2011 of habiter.lu, and has been updated.
2 - Elter and Schockweiler: Co-ownership of Buildings and Sale of Buildings, No. 256.
3 - Luxembourg Court of Appeal, January 26, 2005, Jurisprudence 2005 Newsletter of the Young Bar Conference, p. 44.
4 - Luxembourg Court of Appeal, 15 October 1987, Pasicrisie luxembourgeoise, vol. 27, p. 188.