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New
duty of information weighing on vendors of property situated in certain
areas and property that has been damaged due to fire or similar event
A
law dated 30th July 2003 has, amongst other things, increased
the duty of information weighing upon the vendor of real estate property.
The new additional duty of information concerns property situated
in certain ‘at risk’ areas and property that has been damaged due to
fire or similar event. Article
L. 125 of the Environmental Code has been modified to take into account
these changes.
Firstly,
purchasers (and tenants) of real estate property situated in zones covered
by a technological risk prevention plan or foreseeable natural risk
prevention plan or in zones with seismic activity as defined by decree of
the Council of State, are to be informed by the vendor (or landlord) of
the existence of the risks covered by the plan or decree.
A
report on the risks, based on information held by the Prefect, is to be
annexed to any unilateral promise to purchase or sell and to any contract
completing a transaction.
The
penalty for non-compliance with this obligation is either the termination
of the contract or a reduction in the price decided by a judge.
Secondly,
if constructed property has suffered a fire or similar disaster which has
given rise to an insurance payout, the vendor (or landlord) of the
property is to inform the purchaser (or tenant) in writing of any disaster
that has occurred during the time that he has owned the property or about
which he has been informed under these provisions.
For the sale of such property, mention is to be made in the deed of
completion. The penalty for
non-compliance with this obligation is either the termination of the
contract or reduction in the price decided by a judge.
It
is apparent that a large number of properties in France are potentially
affected. Properties situated
in areas that have suffered flash floods, violent storms or similar
climatic events, as well as seismic activity, which have lead to the
putting into place of risk prevention plans, will now be the object of
this new legislation. It will
provide an extra layer of protection for the purchaser, especially as he
or she will now be better protected in the event that the property has
suffered a fire and this has not been disclosed.
07/11/2003
- Legal update
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