The legal guarantee of ownership and quality

What is the "legal guarantee"? The person who sells a piece of furniture or real estate is required to guarantee that it is free from all defects in title and all hidden defects, except those reported before the sale. This is generally called the "legal guarantee", which has two parts: the guarantee of the right of ownership and the guarantee of quality. These guarantees exist solely by the effect of the law, that is to say without it being necessary to provide for them in the contract.

(Update of the article published on October 21, 2005)

Guarantee of property rights

The guarantee of the right of ownership assures the buyer that:

• the property is free of all rights, other than those declared by the seller;

• the seller will have released the property from all mortgages affecting it, except those assumed by the buyer;

• the property is not subject to encroachment by the seller or a third party; and that

• the property does not violate any limitation of public law, except those denounced by the seller or those that the buyer should have discovered.

The quality guarantee

Under the warranty of quality, the seller guarantees to the buyer that the property is free from defects, existing at the time of sale, which would make it unfit for the use for which it is intended or which would reduce its usefulness to such an extent that the buyer would not have purchased it, or would not have offered the same price if he had known of them. However, the seller does not guarantee the defect known to the buyer or the defect that a prudent and diligent buyer could have noticed. It is therefore important for a buyer to always have the property he intends to acquire inspected by a competent expert. The fact that the seller is unaware of the defect, or that the defect only becomes apparent after the sale, does not in any way diminish the warranty. On the other hand, if the seller was aware of the defect, his liability would be increased to cover, in addition to the reduction in value of the property, all other damage suffered by the buyer.

Exclusion of the legal guarantee of quality

The legal warranty may be increased, decreased or even excluded depending on the wishes of the parties to the transaction. Except for rare exceptions, it is never recommended to exclude the warranty of the right of ownership (warranty of titles). It is more common, however, to see an exclusion of the warranty of quality, particularly in the case of the sale of a building by an estate or following a repossession. In certain circumstances, it may even be advisable to recommend to a seller to sell without a warranty of quality. This could be the case when selling the building of an elderly person who does not want to worry about a possible claim for hidden defects by the buyer, a claim that could be brought against his estate. The exclusion of the warranty of quality may apply to the entire building or only to certain components, such as the swimming pool or household appliances included in the sale. If the warranty of quality is excluded on the entire building, the following clause must be included in the promise to purchase:

" This sale is made without legal guarantee of quality, at the buyer's risk. "

If the exclusion only affects one or more components, the words "relative to" must be added to the end of the clause and the excluded component(s) must be described. If the exclusion of the quality warranty is required from the outset by the seller, a statement to this effect must be included both in the brokerage contract and in the detailed description sheet.

The duties of the real estate broker

The real estate broker has the duty to properly inform the seller and the buyer of the consequences of the exclusion of the warranty of quality. Thus, the seller who wishes to sell a building without a warranty of quality must know:

• that this information must appear on the description sheet and that, depending on the state of the market, this could reduce the interest of potential buyers;

• that the exclusion of warranty may have an effect on the sale price and that it will not protect him from prosecution for defects of which he was aware and which he should have reported.

Seller's statements

In this regard, in the case of a residential building with fewer than five dwellings including divided or undivided co-ownership, the Seller's Declarations on the Building Disclosure of Any Factor Likely to Affect the Value of the Building form must be duly completed in the same circumstances as the appropriate sales brokerage contract form. The person who purchases without a warranty of quality must, for his part, be informed of the fact that even if he discovers a defect of which he was unaware, he will have no recourse against the seller, unless he can demonstrate that he was in bad faith in voluntarily concealing a defect of which he was aware.

Pre-purchase inspection

The buyer should also be advised to have a more in-depth pre-purchase inspection done than the usual inspection when purchasing a property sold with a quality guarantee. It should be noted in passing that the article “ Having an inspection means protecting yourself ” reminds us of the broker’s responsibilities in terms of inspections. Obviously, the building expert retained for this inspection must be informed that the building is being sold without a legal warranty, so that he can take this into account during his inspection. Finally, the buyer should require the seller to provide him with a copy of the Seller’s Declarations on the Building form.

SOURCE: https://www.oaciq.com/fr/articles/garantie-legale-propriete-et-qualite