TRANSFER OF OWNERSHIP AND RISKS
LexInter | March 28, 2003 | 0 Comments

TRANSFER OF OWNERSHIP AND RISKS

FRENCH REPUBLIC
IN THE NAME OF THE FRENCH PEOPLE
On the first plea:

Whereas, according to the judgment under appeal (Paris, September 24, 1998), by acts of 1988, modified by a “memorandum of understanding” of June 17, 1991, the real estate company Le Lion de Belfort (SCI Le Lion de Belfort) sold to the real estate company Villa Saint-Jacques (SCI Villa Saint-Jacques), in the future state of completion, a group of buildings and land with a view to carrying out a construction project for new buildings ; that the SCI Le Lyon de Belfort concluded on the same day with the company Le Groupement foncier français (GFF), to the rights of which the company SFTB comes, a real estate development contract and this SCI and the SCI Villa Saint-Jacques formed the GFF as joint agent for the completion of this transaction; that by ministerial decree of June 4, 1992, the quarry extending under the building to be constructed has been classified as a historical monument; that alleging the impossibility of carrying out the project because of this administrative decision, the SCI Villa Saint-Jacques requested the resolution of the sale; that the SCI Le Lion de Belfort called in guarantee the GFF;

Whereas the SCI Le Lion de Belfort objected to the judgment pronouncing the resolution of the sale and ordering it to return the sums paid by the SCI Villa Saint-Jacques; then, according to the means, 1 ° that by retaining that the classification decision deeply called into question the economics of the project, without noting, thus, any failure of the SCI Le Lion de Belfort to its contractual obligations nor further justify that the classification decision made impossible the realization by the SCI Le Lion de Belfort of the real estate complex as provided for by the contracts binding the parties and while noting, moreover, that from the agreement of the parties modifications to the consistency and the destination of the building were underway and other changes could be made, the court of appeal did not give to its decision to pronounce the resolution of the sale in the future state of completion requested by the SCI Villa Saint-Jacques, legal basis for its decision with regard to article 1184 of the Civil Code; 2 ° that the agreements must be performed in good faith; in this case, the parties had contractually provided that changes could be made to the consistency and destination of the whole property; that good faith therefore required SCI Villa Saint-Jacques to approach SCI Le Lion de Belfort so that the modifications required by the classification decision and the possible readjustment of the cost of construction can be made, as the SCI the Lion of Belfort supported in its conclusions of February 17, 1997; that by invoking a profound questioning of the economics of the project to declare justified the request of the purchasers to see the resolution of the sale pronounced (request formulated, moreover, even before the classification decree is issued) without seeking, as the ” invited the SCI Le Lion de Belfort, if the buyers had not breached good faith by acting as they did, the court of appeal violated article 1134, paragraph 3, of the Code civil; 3 ° that under the terms of article 1601-3 of the Civil Code, “the sale in future state of completion is the contract by which the seller immediately transfers to the purchaser the rights to the land as well as the ownership of the constructions existing; future works become the property of the purchaser as and when they are executed, the purchaser is required to pay the price as the work progresses; the seller retains the powers of the contracting authority until the reception of the works “; that by retaining that the property transferred to the purchaser did not confer on him any power until the delivery of the building, none of the attributes normal property, that a sale in the future state of completion should be considered as the sale of an immovable on a specific land and while noting that in this case, moreover, the acquiring company had it – even signed a mandate of common interest in order to give full power to the GFF to decide on modifications of consistency and destination of the real estate complex, to carry out any act necessary for the realization of the modified program or not,
4 ° that under article 1 of the classification decree of January 4, 1994, “is classified among the historical monuments the part of the underground quarry of the Port-Mahon road corresponding to the plots located 26, 28 and 30, rue de la Tombe-Issoire and 15 and 17, villa Saint-Jacques, in Paris 14th arrondissement, as well as the soil of these plots, excluding existing constructions located on the surface, and whose owner is, by deed signed on June 17 1991, by Mr. Rochelois … the SNC Villa Saint-Jacques incorporated on December 22, 1987 and as responsible representative, Mr. Van Moere, manager “; that while noting itself that only the underground quarry of Port Mahon extending under the buildings located 26, 28 and 30, rue de la Tombe-Issoire and 15 and 17, was classified among the historical monuments, villa Saint-Jacques, the court of appeal which, to rule as it does, holds that the classification decision affects the building to be built, violated, moreover, article 1601-3 of the Civil Code , together the rule res perit domino; 5 ° that while noting that the new building permit had been filed with the agreement of SCI Villa Saint-Jacques, which resulted in it having accepted the risks arising from this new request rendering the previously building permit null and void. obtained and final, the Court of Appeal, which decided that the risks resulting from the classification decision weighed on the only SCI Le Lion de Belfort, did not draw from its findings the resulting consequences and violated, to in this regard again, article 1601-3 of the Civil Code,

But expected, on the one hand, that having noted, for own and adopted reasons, that the order of classification among the historic monuments of the underground quarry extending under the buildings covered by the contract, as well as the corresponding soils, taken by the Ministry of National Education and Culture, resulted in an increase in the cost of the planned construction by a sum of six million francs, the removal of the third basement where sixty-eight parking spaces parking were planned, and the modification of the ground floor of the building to be constructed, from which it resulted that the planned construction could not be carried out in its object, the court of appeal, which was not bound to find out if the SCI Villa Saint-Jacques had theobligation to get closer to SCI Le Lion de Belfort so that the modifications made necessary by the administrative decision and the possible readjustment of the cost of the construction can be made, it was sovereignly accepted that, given these circumstances, the request for resolution of the sale was well founded;

Whereas, on the other hand, having retained, rightly, for own and adopted reasons, that if, in the case of a sale in the future state of completion, the transfer of property on the land and the existing buildings takes place on the day of the sale, this transfer does not take place on works not yet completed, it is not the simple sale of land on which the purchaser would build a building, but the sale of a building to be built on a specific site, the predominant element being the obligation to build, and that such a sale can only be assessed as a whole and not step by step according to the evolution land acquisitions and construction of buildings, the court of appeal,who noted that the classification decision related to the quarry and the corresponding soils, and that the request for a modifying building permit had been made before this decision, was able to deduce that the transfer of risks did not take place on the property acquired that at the time of the delivery of the buildings constructed, and that before this one the risks weighed on the seller, who was debtor;

From which it follows that the plea is unfounded;

On the second ground: (Publication without interest);

FOR THESE REASONS :

DISMISSES the appeal.

 


Publication: Bulletin 2000 III N ° 163 p. 113
The Legal Week, 2001-01-31, n ° 5 p. 257, note P. MALINVAUD. La Semaine Juridique, notarial and real estate edition, 2001-06-15, n ° 24 p. 1031, note P. MALINVAUD. Gazette du Palais, 2001-06-26, n ° 177 p. 29, notes M. PEISSE.
Contested decision: Paris Court of Appeal, 1998-09-24

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