Fraudulent misrepresentation: compensating the excess price

The buyer of a property who is the victim of fraudulent misrepresentation (dol) is not compelled to seek annulment of the sale: if they keep the property, they may claim compensation for the excess price paid. The third civil chamber so holds on the basis of Articles 1116 and 1382 of the French Civil Code, in their wording prior to the Ordinance of 10 February 2016. The award is not confined to a loss of chance.

The essentials

• A property buyer deceived by the concealment of decisive information may keep the property and claim compensation for the excess price paid.
• Compensation is not confined to the loss of chance (perte de chance) of having acquired the property at a lower price.
• The lower court judges assess the property's depreciation in their unfettered discretion; it was set here at 15% of the acquisition price.
• The depreciation was assessed as at the date of acquisition, and the subsequent resale of the property at a higher price did not call it into question.
• Fraudulent misrepresentation is not presumed: the buyer must prove that the seller withheld information which they knew to be decisive.

Concealment of a dangerous neighbour before the sale

A seller who says nothing about a neighbour's dangerous behaviour risks having to compensate the buyer, even without annulment of the sale. The third civil chamber (Civ. 3e, 28 May 2026, No. 24-20.821) dismisses the sellers' appeals to the Cour de cassation (France's highest civil court), in which they argued that only a loss of chance could be compensated. Two private individuals had purchased a flat and a parking space in 2011, then resold them in 2016. The buyers complained of the abnormal behaviour of the occupant of the neighbouring flat.

The buyers issued a writ of summons (assignation) against the sellers seeking compensation for their damage on the basis of fraudulent misrepresentation. The decision under appeal (CA Paris, 12 July 2024, No. 21/14540) ordered the sellers to pay damages in solidum. The court of appeal held that the damage corresponded to the depreciation in the value of the flat resulting from the insecurity caused by the neighbour, and not to a loss of chance of acquiring at a lower price. It assessed that depreciation at 15% of the acquisition price.

The third civil chamber dismisses the second grounds of appeal, drafted in identical terms in the two joined appeals; the first grounds did not warrant a specially reasoned decision. The solution rests on the provisions applicable to this sale, which predate the reform of contract law, and offers the deceived buyer a clear alternative (free translation):

It follows from Articles 1116 and 1382 of the French Civil Code, in their wording prior to that resulting from Ordinance No. 2016-131 of 10 February 2016, that the buyer of a property who is the victim of fraudulent misrepresentation and has chosen not to seek annulment of the contract of sale may bring a claim for compensation for an excess price.

The decision then specifies the review exercised over the amount. The assessment of the depreciation is a matter for the lower court judges, and the decision describes that assessment as unfettered. The sellers challenged both the method and the outcome, arguing that compensation had to be measured by reference to the lost chance alone. The third civil chamber rejects that reading:

Having held that the damage suffered by the buyers corresponded to the depreciation in the value of the flat as a result of the insecurity arising from the neighbour's behaviour, the court of appeal assessed it, in its unfettered discretion, at 15% of the acquisition price.

Excess price or loss of chance: what compensation?

The deceived buyer who keeps the property recovers the overpayment, not a fraction of that overpayment weighted by a probability. The difference is financially decisive. Compensating a loss of chance means measuring the probability that the buyer would have obtained a price reduction, then applying that percentage to the lost gain. Compensating an excess price means comparing the price paid with the actual value of the property, as it would have been negotiated with knowledge of the concealed information.

In practical terms, a buyer who is the victim of fraudulent concealment (réticence dolosive), that is, of silence kept about decisive information, has an option. They may seek annulment of the sale, which entails returning the property. They may also keep the property and claim the price differential, measured by the depreciation caused by the concealed fact. That choice does not confine them to an award reduced by a probability calculation, according to the solution adopted by the third civil chamber.

For the seller, the financial exposure changes in nature. Silence about a fact known to them which affects the safety or enjoyment of the dwelling may result in the repayment of a significant part of the price. In this case, the lower court judges settled on 15% of the acquisition price. The seller cannot therefore hope to reduce the award by disputing merely the likelihood of a renegotiation.

Fraudulent misrepresentation without annulment: what scope?

The decision confirms that the buyer of a property does not have to choose between annulment of the sale and the absence of any useful compensation. The rule is stated in general terms for the buyer of a property who is the victim of fraudulent misrepresentation, on the basis of former Articles 1116 and 1382 of the French Civil Code. It is not limited to the circumstances of a difficult neighbour. The characterisation of the concealed fact remains central: the information withheld must still have been decisive of consent.

What the decision does not settle deserves attention. The provisions applied are those in force before the Ordinance of 10 February 2016; the decision does not rule on the regime resulting from the reform, which the buyers had nevertheless invoked before the court of appeal by relying on Articles 1137 and 1240 of the French Civil Code. As the case law stood on 28 May 2026, the solution is thus given for a sale predating that reform.

The valuation method followed by the court of appeal sheds light on the practical scope of the decision. According to that court, the depreciation had to be assessed as at the year of acquisition and by reference to the price the buyers would have negotiated had they known of the disturbances. The subsequent resale of the property at a higher price therefore did not call the discount into question, and general statements from estate agents as to the absence of any impact of the neighbourhood were not sufficient to contradict it.

What practical steps for the buyer and for the seller?

The dispute is won on proof of what the seller knew and on the measure of the property's depreciation. Fraudulent misrepresentation is not presumed and must be proved, under former Article 1116 of the French Civil Code in the wording applied by the court of appeal. The buyer must therefore establish two cumulative elements: the seller's knowledge of the fact before the sale, and the decisive character of that fact for their own consent.

The evidence that persuaded the lower court judges was dated and contemporaneous with the events. The court of appeal relied on police log entries and complaints filed by the sellers themselves, as well as on an email sent to the managing agent (syndic) and the unit owners (copropriétaires). It disregarded statements from persons housed or employed by the sellers, whose probative value it found insufficient or weakened.

On the seller's side, producing the minutes of general meetings is not sufficient where those documents make no mention of the disturbances. The court of appeal expressly noted this. A seller who knows of a fact affecting the safety, habitability or enjoyment of the dwelling would be well advised to record it in the pre-contractual exchanges or in the deed, rather than to rely on the commonhold (copropriété) documents.

Checks to make before suing the seller

Three points emerge from this decision. First, check whether annulment of the sale is genuinely sought: keeping the property does not prevent a claim for the excess price paid. Next, gather the dated evidence establishing what the seller knew before signing, giving priority to writings contemporaneous with the events. Finally, document the depreciation as at the date of acquisition, through precise comparables rather than general assessments. The applicable regime depends on the date of the sale, the provisions applied here predating the reform of contract law.