The buyers of a cracked house, for which a judgment had accepted, nearly ten years before the sale, the principle of its demolition and rebuilding, chose to keep it. They obtained from the seller, who knew of the defects, a refund of part of the price and the cost of demolition and rebuilding; the notaire (French civil-law notary) and the estate agent each had to bear 10% of it. On 14 December 2017 the Cour de cassation (the French supreme court for civil and commercial matters) quashed on two points: the two sums repair the same loss, and the price refund is not in itself a compensable loss to be shared with other liable parties. For the valuer, the decision leads to presenting these sums as options and keeping the refund apart from damages.
The facts
By an authentic deed of 20 July 2007, drawn up by a notaire, a seller sold a house affected by old cracks for €98,000, through an estate agent. A final judgment of 25 September 1997 had accepted the principle of its demolition and rebuilding, because of defects compromising the building’s stability and the refusal to issue the certificate of conformity.
New cracks and deformations of the structure appeared. After an expert appraisal, the buyers sued the seller and the notaire under the hidden defects warranty (garantie des vices cachés); the notaire joined the estate agent as a third party, claiming indemnity.
On 21 July 2016 the Bourges Court of Appeal held that the buyers had chosen to keep the building and that the seller, “who knew of the defects affecting the property, is liable, in addition to the refund of the price received for it, for all damages towards the buyers” (article 1645 of the French Civil Code; quotations translated from the French). It ordered the seller to pay them €238,291.08 as the refund of part of the purchase price and the cost of demolition and rebuilding, in addition to various losses. It found the notaire at fault for not attaching the 1997 judgment to the deed, and the estate agent, who “had only mentioned in the preliminary contract of sale that the buyers had taken note of the resolved incident relating to cracks”. Each had to bear 10% of the sums ordered against the seller, including the €60,000 refunded as the part of the price corresponding to the cost of the house excluding the land.
The decision
The Cour de cassation (Cass. 3e civ., 14 December 2017, appeal no. 16-24.170, reported) quashed on two points.
On the double recovery, under the principle of full compensation, it censured the Court of Appeal, which had ruled as it did “whereas the refund of part of the sale price and the indemnity awarded for demolition and rebuilding both compensated the loss of the usefulness of the thing”.
On the share placed on the notaire and the estate agent, it quashed under article 1644 of the Civil Code: “the refund of the sale price, which a seller is ordered to make following the reduction provided for by article 1644 of the Civil Code, does not in itself constitute a compensable loss giving rise to a right to damages for the buyer”.
It did, however, approve the liability of the two professionals, found by the Court of Appeal “in a proportion that it assessed in its sovereign discretion”. The quashing is limited to the sum of €238,291.08 and to the share of the price reduction placed on the two professionals; the case is sent back to the Lyon Court of Appeal.
What this changes for valuation
Two measures of the same loss. When a defect requires the house to be demolished and rebuilt, a buyer who keeps it has lost the usefulness of the building. That loss is measured either by the part of the price corresponding to the building, which the price reduction under article 1644 returns to them, or by the cost of demolition and rebuilding, which damages under article 1645 pay them where the seller knew of the defect. Adding the two amounts to refunding the price of the house while also paying for a new one. The report therefore presents the two measures as options, never added together. The “various losses” also awarded by the Court of Appeal, on which the Cour de cassation does not rule, call for a separate calculation: in practice, rehousing or loss of enjoyment are quantified apart. The price reduction can itself be measured by a cost of works, as the Court accepted for a hidden defect repaired by the co-owners’ association.
Splitting the price between land and building. The Court of Appeal reasoned on the part of the price corresponding to the house excluding the land, €60,000 out of €98,000. The decision sets no method for this split; what follows is valuation practice. Where the building has to be demolished, the land in principle keeps its value, unless the defect lies in the ground itself. The valuer then splits the price between land and building at the date of the sale, from comparable sales of building plots in the area, and gives reasons for the share attributed to the building. The report states the valuation date of each figure and presents separately any betterment a new building would bring to the old property, for the judge to decide.
How this fits with the 2026 rulings. On 8 January 2026 the Court held that a seller who knew of the defect may owe the cost of rebuilding the property the buyer keeps, without a cap at its market value. The two rules combine: a seller in bad faith may owe the entire rebuilding, but not, on top of it, the part of the price paid for the building. On 22 January 2026 the Court required the judge to respect the order of the claims chosen by the buyers: cost of works as the main claim, partial price refund in the alternative. The ruling of 7 September 2017 on the fire-destroyed building not rebuildable on site decides another question: measuring the loss when on-site rebuilding is impossible.
Refund and damages: two columns. The price refund is not in itself a compensable loss: the seller returns part of what they received for a property that was not worth that price. A notaire or estate agent at fault answers for the losses they helped to cause, but the decision refuses to make them bear a share of the price reduction, which here came to €6,000, 10% of the €60,000 refunded, for each of them. The report therefore presents the price reduction apart from compensable losses, a share of which the court was entitled here to place on them.
What the valuer takes from it
- A price reduction and demolition-and-rebuilding costs repair the same loss: the report presents them as options, never added together.
- Where the building must be demolished, the report splits the price between land and building as at the sale date.
- Losses of a different kind are quantified separately; the decision does not rule on them.
- The price refund is not in itself a compensable loss: the report presents it separately, as the decision refuses to make the notaire and the agent bear a share of it.
Further reading
The Property loss of value page describes the assignment, its timescale and its fee. The guide I paid too much: can I challenge the price? and the glossary entries vice caché, moins-value and valeur de reconstruction complement this article. The other 2017 ruling, discussed separately: Fire-destroyed building not rebuildable on site: market value. On the same theme: Hidden defect known to the seller: market value caps nothing and Hidden defect: the cost of works is judged before the price cut. The decision is available on Légifrance.
What next
A hidden defect, a house you are keeping and several sums to quantify without double counting?
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