Manufacturer's Liability and Insurer's Warranty
A project owner has a building renovated, which he then divides and sells in lots on a pre-completion basis. To do so, he takes out a non-developer builder’s insurance policy.
After the building is accepted, the condominium association and certain co-owners complain of defects.
Ordered by the Court of Appeals to pay several tens of thousands of euros on his own, the seller appealed the decision. In particular, he criticized the judges for rejecting his request to order his insurer to cover him for defects falling under the ten-year warranty affecting the rooftop terrace. He ultimately prevailed.
The Court of Cassation reiterated that a defect in the construction of the structure that rendered it unfit for its intended purpose automatically triggers the builder’s ten-year liability and allows the insurer to be held liable. This principle applies even if the defect results, as in this case, from a failure to drain rainwater, rather than from a construction defect.
Thus, the builder may seek indemnification from its ten-year liability insurer, even if the defect results from a breach of contract, provided that it renders the structure unfit for its intended purpose.
The court’s decision
