A building of rented flats is destroyed by fire; the site is dangerous and the mayor refuses a building permit, so it cannot be rebuilt as it was. The owners, already paid €244,195 by their own insurer, claim from the tenants’ insurers enough to rebuild, €1,132,959 on their figures. On 7 September 2017 the Cour de cassation (the French supreme court for civil and commercial matters) approved measuring the loss at the market value (valeur vénale) of the building at the date of the fire: a new-build reconstruction in another place would give the owners an undue advantage. For the valuer, the figures start with a question of fact: can the building be rebuilt where it stood?
The facts
A couple owned a building bought in 2001, comprising several flats let to tenants, three of whom were each insured with a different company. During the night of 21 to 22 April 2010 the building was destroyed by fire. The owners’ insurer paid them €244,195. Claiming that rebuilding the building would cost €1,132,959, the owners sued the insurers of the three tenants for full compensation of their loss.
On 11 February 2016 the Versailles Court of Appeal limited the compensation to €244,195. It found that the building could not be rebuilt as it was, because of the dangerous location and the mayor’s refusal to grant a building permit, and held that a new-build reconstruction value in another place would give the owners an undue advantage. According to the appeal, it put the market value of the lost building at €200,000 and noted demolition and clearing costs assessed, without dispute, at €14,591, concluding that the owners did not prove a loss greater than what their insurer had covered.
The owners appealed to the Cour de cassation. Relying on articles 1733 and 1734 of the French Civil Code, which govern tenants’ liability for fire, and on the principle of full compensation (principe de la réparation intégrale), they argued that a building that cannot be rebuilt on the same land must be compensated at its rebuilding value elsewhere. They also relied on a loss of rent of €39,340.
The decision
The Third Civil Chamber dismissed the appeal (Cass. 3e civ., 7 September 2017, appeal no. 16-15.257, reported).
It held that the court of appeal, “having found that the building could not be rebuilt identically because of the dangerousness of its location and the mayor’s refusal to grant a building permit, and held that awarding the owners a new-build reconstruction value in another place would give them an undue advantage since they would benefit from an equivalent but better located property”, had “rightly deduced, without breaching the principle of full compensation, that the loss had to be compensated according to the market value of the building at the date of the fire” (translated from the French).
The words “rightly deduced” (exactement déduit) mark approval of the legal reasoning, not merely respect for the court of appeal’s assessment of the facts. Full compensation forbids loss, but also gain.
On the loss of rent, the complaint was rejected: the owners “not having sought, in their submissions, compensation for loss of rent, the court of appeal was not required to rule on that head of claim” (translated from the French).
What this changes for valuation
Whether rebuilding is possible is checked before any figure. The ruling rests on the impossibility of rebuilding the building identically on its land. The valuer therefore starts by establishing, with supporting documents, whether rebuilding on site is possible in law and in practice: refusal of a permit, planning rules, risk zoning, condition of the land.
Market value at the date of the fire, in the former condition. The owner does not lose a new building, but a building as it was, where it was, with its age, its condition, its tenants and its location. The report establishes its valeur vénale at the date of the fire, building included, from sales of comparable buildings at the time and, for a let building, by capitalising the rents it produced.
The gap between the figures shows what is at stake. According to the appeal, the market value adopted by the court of appeal was €200,000, less than a fifth of the €1,132,959 claimed. Even with the demolition and clearing costs added, it remained below the €244,195 already paid by the owners’ insurer: hence compensation limited to that sum. The valeur de reconstruction (rebuilding value) and market value do not measure the same thing: the report presents them separately and quantifies demolition costs on their own, from quotes or invoices, since the Court did not rule on that item.
Where rebuilding on site remains possible. The ruling says nothing about that case. On 8 January 2026 (appeal no. 24-10.636), ruling under article 1645 of the French Civil Code, the Cour de cassation accepted that a buyer who keeps the property may recover from a seller who knew of the hidden defect (vice caché) the cost of rebuilding it, without limiting the damages to market value: see Hidden defect known to the seller: market value caps nothing. The two decisions concern different situations and different legal bases, the liability of a seller who knew of the defect on one side, tenants’ liability for fire and full compensation on the other; neither says what the test of rebuilding on site would produce under the other regime. The report therefore states on which legal basis the claim is made. Whether a price refund and the cost of demolition and rebuilding can be combined after a hidden defect is a matter for another 2017 ruling: see Hidden defect: no double recovery of price refund and rebuilding.
Other fire disputes. An owner whose building, partly destroyed by fire, was compulsorily purchased before the insurer had paid recovers the lost chance of receiving the payout (Burnt then expropriated: the lost insurance payout is compensated); the lease of burnt premises whose reinstatement would cost more than their value ends by operation of law (Fire: works costing more than the premises, lease terminated).
Each head of loss has to be claimed. The loss of rent was not examined, because it had not been sought in the submissions. The valuer lists all heads of loss and how each relates to market value, without double counting, so that the party can take them up in time.
What the valuer takes from it
- A building that cannot be rebuilt identically on site is compensated at its market value at the date of the fire, not at its new-build reconstruction value elsewhere.
- The report first establishes, with supporting documents, whether rebuilding on the land is possible in law and in practice.
- Market value is assessed in the condition before the fire, building included, with the market references at that date.
- Demolition costs, loss of rent and other heads of loss are presented separately, without double counting.
- Where rebuilding on site remains possible, the ruling does not decide the point; the report states which situation it addresses.
Further reading
The Property loss of value page describes the assignment, its timescale and its fee. The guide Producing a valuation in a French court: which format to choose? and the glossary entries valeur vénale, valeur de reconstruction and préjudice immobilier complement this article. On a separate point decided the same year: Hidden defect: no double recovery of price refund and rebuilding. On the same theme: Hidden defect known to the seller: market value caps nothing and Prefer a quote to a flat-rate deduction: French pre-emption case. The decision is available on Légifrance.
What next
A destroyed building that cannot be rebuilt on the same site?
I establish the market value of the property at the date of the fire, in its former condition, from sales of comparable buildings. The report sets out demolition costs and the other heads of loss separately, for the insurer, the court or the negotiation.
Free quote, by email or by phone. No commitment before the quote is accepted. Fees are never linked to the value of the property (Charte de l’expertise, Title I, §2.1).
