- Compensable damages in case of error by the diagnostician
- Early repayment penalty
- Expropriation for public purposes – Scope of the right to compensation
- Participation of the condominium association in the event of legal action by a co-owner
- Appendices to the minutes of the general meeting
- Charges
- Trustee's mandate – regularization
- Authorization of the trustee to take legal action
- Judicial determination of rent
1. Compensable damages in the event of an error by the diagnostician
Mix. July 8, 2015 (No. 13-26.686) PBRI:
In this case, the pest control report provided to the buyers was inaccurate and failed to inform them, before the purchase, of the advanced termite infestation in the building. The buyers therefore sued the real estate agent through whom they had purchased the property, as well as the insurer of the property inspector, the latter having gone into liquidation, seeking compensation for their losses.
The insurer appealed to the Court of Cassation, contesting its liability to compensate the buyers for material and enjoyment damages. In support of its appeal, the insurer argued that the consequences of the breach of the duty to inform could only be analyzed as a loss of opportunity and not as material damages.
The Court of Cassation dismissed the appeal. According to the Court, Article L. 271-4 of the French Building and Housing Code stipulates that the technical diagnostic report attached to the preliminary sales agreement or the final deed of sale of a property guarantees the buyer against the risk associated with the presence of termites, and that the diagnostician's liability is engaged when the diagnostic report has not been carried out in accordance with the established standards and best practices, and is found to be erroneous. The material and enjoyment damages suffered by the buyers as a result of this erroneous diagnostic report are therefore certain, and the diagnostician's insurer owes them coverage.
2. Early repayment penalty
1st , 2015 (No. 14-14.444) F-PB:
Citing the dismissal of one of their colleagues, two co-borrowers prepaid their loans by refinancing with another institution and then sued the bank for reimbursement of the early repayment penalties.
The bank appealed the Court of Appeal's decision upholding the claim. According to the bank, the loan repayments were not actually motivated by the dismissal of one of the borrowers but by the failure to renegotiate the interest rate.
The Court of Cassation relied on the Court of Appeal's ruling, which specified that the borrowers had justified their decision to prepay the loans by the dismissal of one of their colleagues. The Court of Cassation therefore held that the Court of Appeal was correct in deciding that the reason related to the reduction in interest rates was in no way exclusive of the reason related to the dismissal and ordered the bank to reimburse the early repayment penalties.
3. Expropriation for reasons of public utility – Scope of the right to compensation
ECHR 25 June 2015 (application no. 24756/10) Couturon v. France
In this case, the applicant complained of the lack of compensation for the loss in value of the portion of his property from which he had not been expropriated due to the construction of the A89 motorway near it, and alleged a violation of Article 1 of Protocol No. 1 concerning the protection of property.
The Court considered that France had a wide margin of appreciation in this case, given that the construction of the motorway fell within the scope of a regional planning policy in which the general interest of the community was paramount. Furthermore, the Court held that the owner had benefited from a fair judicial review, as the French courts had duly examined his arguments concerning the depreciation of his property following the construction of the motorway. Consequently, the Court concluded that there had been no violation of Article 1 of Protocol No. 1 to the ECHR.
4. Participation of the condominium association in the event of legal action by a co-owner
3rd , 2015 (No. 14-16.975) FS-PBI
The owner of units in a building subject to condominium ownership, having been divided into units shared between two co-owners, sued the other owner for the demolition of constructions affecting the common areas, erected by the latter without authorization. To order the co-owner to restore the premises to their original condition, the Court of Appeal held that, since the condominium association was not organized, it could not be joined in the proceedings.
The Court of Cassation overturned this decision. According to the Court, a co-owner who individually brings an action seeking the restoration of the common areas must bring the condominium association into the proceedings, after having its representative appointed by the court if necessary.
5. Appendices to the minutes of the general meeting
3rd , 2015 (No. 14-12.072) FS-PB:
The owner of a unit in a building subject to condominium ownership sued the building manager, demanding a copy of the caretaker's employment contract. According to the Court of Appeal, the co-owner was entitled to request from the building manager the documents that are required to be attached to the minutes of general meetings. This included the caretaker's employment contract, as her hiring required the approval of the condominium association.
However, the Court of Cassation ruled that the employment contract of an employee of the condominium association does not constitute an attachment to the minutes of a general meeting. The lower court's decision was therefore overturned.
6. Charges
3rd , 2015 (No. 14-12.995) FS-PB:
In this case, the purchaser of units in a building subject to condominium ownership contested his conviction to pay condominium fees. According to the Court of Appeal, this purchaser was barred from challenging the general meeting at which the decision to call for funds was made, since he was unknown to the condominium association because the transfer of ownership had not been notified to him in the manner required by Article 6 of the decree of March 17, 1967, and therefore he did not need to be summoned.
The Court of Cassation, on the contrary, held that the condominium association, which argued that the transfer of ownership was unenforceable against the purchaser due to the lack of notification of the transfer, could not demand payment of condominium fees from him. The Court of Cassation therefore overturned the Court of Appeal's decision.
7. Trustee's mandate – regularization
3rd 16 , 2015 (No. 14-16.106) FS-PBI:
A general meeting on January 27, 2010, appointed a property manager until December 31, 2010. A subsequent general meeting on July 5, 2012, retroactively renewed the manager's mandate. Following
a judgment granting the request of two co-owners to annul a decision made by the general meeting, the property manager appealed the decision on behalf of the condominium association on October 25, 2011. As the property manager's mandate had expired by that date, the respondents argued that the appeal was inadmissible due to the manager's lack of authority.
The Court of Appeal held that the appeal filed by the property manager, who lacked a mandate at that time, was fundamentally flawed and that this flaw had not been remedied.
The Court of Cassation clarified that the regularization of the powers of the trustee who acted in court on behalf of the syndicate without a mandate cannot take place after the expiry of the appeal period; consequently, the Court rejected the appeal lodged by the condominium association.
8. Authorization of the trustee to take legal action
CE 3 July 2015 (no. 371433):
The general meeting of a condominium association had invited the property manager, by resolution, to " exercise a possible appeal against the building permit concerning the adjoining development ." To uphold the objection of inadmissibility raised in defense, the administrative court of appeal, subsequently approved by the Council of State, held that, in the absence of any further details regarding the object and purpose of the challenge mentioned in the resolution, it could not be considered valid authorization given by the general meeting to the property manager to appeal the contested judgment.
9. Judicial determination of the rent
3rd Civil Chamber, July 1 , 2015 (No. 14-13.056) F-PB:
The owner of leased commercial premises sued the tenants to have the rent for the renewed lease set. To determine the rent for the renewed lease based on the market rental value, the Court of Appeal took into account, in particular, the three-year rent reviews that could have occurred on May 3, 2008, and May 3, 2011.
The Court of Cassation overturned the judgment, ruling that, by doing so when no request for a three-year rent review had been made by extrajudicial act or registered letter, the Court of Appeal violated Articles L. 145-37 and R. 145-20 of the French Commercial Code.
