Hidden defect (vice caché)

A vice caché (hidden defect) is a defect that a normally attentive buyer could not detect at the time of the sale and which, had the buyer known of it, would have led them to walk away or to pay less. In property, the typical cases are a dry rot infestation, failing foundations, an undisclosed non-compliant septic system, a roof structure attacked by insects, unstable ground. The defect must pre-date the sale, be hidden, and be serious enough to affect the use of the property.

Most deeds of sale between private individuals contain a clause excluding the hidden defects warranty. It is effective, unless the seller knew of the defect, or is a property professional. Proof of that knowledge is often the decisive point of the dispute.

Where the rule comes from

Article 1641 of the French Civil Code provides that the seller is bound by a warranty against hidden defects in the thing sold which make it unfit for its intended use, or which reduce that use to such an extent that the buyer would not have bought it, or would have paid a lower price, had they known of them. Article 1642 excludes apparent defects. Article 1644 opens the choice between returning the thing and recovering the price, or keeping it and recovering part of the price. Article 1645 adds damages where the seller knew of the defect. Article 1648 requires proceedings to be brought within two years of the discovery of the defect.

In a valuation report

The valuation expert does not establish the existence of the defect, which is a matter for a building technician. I step in to quantify the consequence: by how much would the price have been reduced if the defect had been known? I reconstruct the market value of the property at the date of the sale, without the defect, then with the defect, taking into account the cost of the works, their uncertainty and the residual loss of value after repair. Where relevant, I also quantify the loss of enjoyment during the works. This valuation serves the price reduction action (action estimatoire) of article 1644 and the damages of article 1645.

Example

A longère (Breton farmhouse) bought for €245,000 in 2023 turns out to have dry rot in the ground-floor joists, beneath a floor relaid by the seller shortly before the sale. Treatment and replacement of the floors are quoted at €38,000, and the house is uninhabitable for five months. I assess the price reduction at €38,000 of works, €9,000 of residual loss of value linked to the history of dry rot, and €4,500 of loss of enjoyment, that is €51,500 in total.

Not to be confused with

Non-conformity, which concerns what was promised in the contract and not an intrinsic defect, and fraud (dol), deceit by the seller which allows the sale to be annulled on another basis.