Background
SCI Les Balcons de l’Estaque sold units in a building under construction to Mme [W] and M. [L] and registered a seller’s lien over the property. After delivery, the buyers complained of defects and deposited with the Caisse des dépôts et consignations the remaining 5% of the purchase price.
The buyers later agreed to resell the property and placed €30,000 in escrow. They undertook to obtain discharge of the seller’s lien and, if they failed to do so within the prescribed period, irrevocably authorized the prospective sub-buyers to use the escrowed and deposited funds to pay the registered creditor whatever was necessary to secure discharge. The original buyers then sued the seller to cancel and discharge the lien. The Aix-en-Provence Court of Appeal rejected that relief and held inadmissible as new on appeal their claim that the seller pay them the €30,000.
The Court’s Holding
The Court of Cassation dismissed the appeal. It held that depositing the unpaid balance under Article R. 261-14 of the Construction and Housing Code counts as payment only in relation to the buyer: it releases the buyer from the obligation to pay that balance and prevents the seller from pursuing payment or seeking contractual remedies for nonpayment. The deposit does not, however, extinguish the seller’s underlying claim.
Because the secured claim remained in existence, the deposit did not extinguish the seller’s lien, and the buyers were not entitled to cancellation of its registration. Once the rejection of that request became final, the buyers’ separate challenge concerning the €30,000 payment claim was inoperative because that claim could not succeed. The court ordered the buyers to pay costs and denied the parties’ requests under Article 700 of the Code of Civil Procedure.
Key Takeaways
- Depositing the final price balance for a property sold before completion releases the buyer from the payment obligation but does not extinguish the seller’s claim.
- Because the claim survives, the seller’s lien securing it also survives and need not be removed.
- A procedural challenge concerning a related payment claim is inoperative when the definitive rejection of the lien-cancellation claim prevents that payment claim from succeeding.
Why It Matters
The decision distinguishes a deposit’s effect on the buyer’s personal payment obligation from its effect on the seller’s claim and related security interest. Buyers may be protected from collection proceedings and contractual sanctions for nonpayment while the funds are deposited, yet still be unable to obtain removal of the seller’s lien.
That distinction is especially significant when buyers seek to resell property: depositing the disputed balance alone may not clear title or ensure discharge of the seller’s registered security.