A developer has been ordered to pay over €250,000 in compensation to a seller for land they purchased cheaply.

The sale price of building land with a view overlooking the bay of Nice for €2m² was considered to be ‘derisory’ by a French court.

The developer paid €15,000 for the land, which they sold two years later in a serviced state for €600,000, equivalent to €74m².

The court heard that other similar land in the locality had been sold a year earlier for €37m².

As a result, the developer was ordered to pay a further €258,000 plus interest to the seller.

With the cost of servicing the land estimated at around 50% of the sale price, that left the developer with a far more modest profit from the transaction.

Some readers may find it surprising that a court should intervene in a case of this nature, and it is certainly true to say that it does not happen very often.

Nevertheless, although a seller and buyer can normally agree such terms between them as they wish, the law says that the consideration paid must be ‘real and serious’. There must effectively be a price paid, even though it may not necessarily have been the market price.

The court will consider, not merely the purchase price, but the obligations into which the purchaser has entered as part of the sale.

In this case, although the developer undertook servicing of the land, they were also owners of other adjoining land which was being developed, and all of the land in the area was zoned for development.

The sellers claimed that little consideration should be taken of the servicing costs of the land as an access route was included in the sale, but this was not a view accepted by the court.

And the Notaire?

What, it may also be asked, was the notaire doing in allowing the sale to proceed without apparently advising the sellers that they were being taken to the cleaners?

It seems inconceivable that they did not realise the price was well below what the seller should be obtaining for the land.

Although the court of appeal dismissed the action against the notaire, this was not a view subsequently accepted by the Cour de Cassation, who ordered that the question of the responsibility of the notaire be referred for further consideration.

Notaires owe a duty of care to their clients, but as they frequently act for both seller and buyer, it is difficult to see just how this responsibility can effectively be carried out.

The regular flow of e mails we receive from you, with complaints about notaires, seems to confirm that hypothesis.

Which is why we always recommend that, whether you are a buyer or a seller, you use your own notaire in property transactions.