CCMI disputes (house construction contracts): delay, site abandonment and remedies against the builder

Having a house built is often the greatest financial commitment of a lifetime. When the works fall six months behind, the builder no longer answers the telephone and the slab stays open to the sky all winter, the client (maître d'ouvrage) feels helpless. Yet the single-family house construction contract (contrat de construction de maison individuelle, CCMI) is one of the most protective contracts in French law: the law requires a completion guarantee (garantie de livraison) which obliges a financial third party to finish the house at the agreed price and within the agreed time, even if the builder disappears. This guide explains how these protections work, how to react to delay or to abandonment of the site, and what remedies to pursue against a defaulting builder.

The CCMI, a contract governed by the 1990 Act

The single-family house construction contract is governed by Law No. 90-1129 of 19 December 1990, codified in Articles L. 231-1 et seq. of the French Construction and Housing Code (Code de la construction et de l'habitation, CCH). This text was designed to protect non-professionals against builders who, before 1990, could collect instalments without any guarantee of completion.

The CCMI applies where a person has a dwelling built (a single-family house or a building comprising no more than two dwellings intended for the same client) on land belonging to that person, by a company that undertakes all or part of the works. This characterisation is not optional: as soon as the conditions are met, the protective regime applies, whatever title the professional has given to the document. A contract presented as a mere "works contract" or a "contrat d'entreprise" may be requalified as a CCMI by the court, with retroactive application of all the guarantees. The nature, formation and obligations specific to the ordinary-law contrat d'entreprise (contract for works) are covered in a separate article.

Two forms: with or without supply of plans

The law distinguishes two regimes. The CCMI with supply of plans (Articles L. 231-1 et seq. CCH) covers the most common case: the builder designs or supplies the plans for the house and carries out the construction. This is the most protective regime, with all the mandatory particulars and the completion guarantee.

The CCMI without supply of plans (Articles L. 232-1 et seq. CCH) applies where the client provides the plans (for example those of an independent architect) and entrusts the execution of the main works to a company. The regime is lighter but still requires a written contract and guarantees. The boundary between the two often turns on who actually designed the house, a technical point on which the analysis of a lawyer handling single-family house construction cases is decisive.

Mandatory particulars and the payment schedule

Article L. 231-2 CCH lists the particulars that the contract must contain: description of the land, description and technical characteristics of the house, total and itemised cost of the building, time for execution of the works, late-completion penalties, references of the completion guarantee and, where applicable, of the refund guarantee.

The payment schedule is strictly regulated by Article R. 231-7 CCH. Payments may not exceed capped percentages according to progress: for example 15% on commencement of the works, 25% on completion of the foundations, 40% on completion of the walls, 60% when the building is weathertight against water, 75% on completion of the partitions and when it is weathertight against air, 95% on completion of the fittings, plumbing, joinery and heating work. The 5% balance is paid on acceptance (réception), or consigned where reservations are noted. This sequencing prevents the builder from collecting more than the value of the works actually carried out, which limits the financial loss in the event of abandonment of the site.

The completion guarantee, the central protection against site abandonment

The completion guarantee is the cornerstone of the system. Provided for by Article L. 231-6 CCH, it is issued by a credit institution or an insurance company which undertakes to guarantee to the client delivery of the house at the agreed price and within the agreed time.

"The contract referred to in Article L. 231-1 must be accompanied by the guarantee of completion at an agreed price and within an agreed time defined in Article L. 231-6." (Article L. 231-2 CCH)

No site should start until this guarantee has actually been taken out. This is the first reflex: check, before any payment, that the contract names the guarantor and that the CCMI completion guarantee certificate has actually been issued. A builder unable to produce this certificate should not receive any instalment.

What the completion guarantee covers

The guarantor covers three types of default by the builder. First, completion of the construction: if the builder stops work, the guarantor must appoint a new company to finish the house. Second, the additional cost: the extra costs of replacing the builder are covered, subject to an excess which may not exceed 5% of the agreed price (Article L. 231-6 CCH). Finally, late-completion penalties: the guarantor pays the contractual penalties beyond a certain threshold.

In practical terms, if a house is sold for €250,000 and the builder abandons the site halfway through, the client does not have to fund from its own pocket the extra cost of a more expensive replacement company. The guarantor steps in, within the limit of the excess. This mechanism explains why the completion guarantee is described as a public-policy protection: it transfers the risk of the builder's insolvency to a solvent third party.

How to call on the completion guarantee

Calling on the guarantee requires the builder's default to be established. In practice, the process begins with a formal notice (mise en demeure) sent to the builder by registered letter with acknowledgement of receipt, requiring it to resume the works within a specified period. If it has no effect, this formal notice allows the guarantor to be approached.

The default must then be notified to the guarantor, enclosing the contract, the guarantee certificate, the schedule of payments made and the evidence that the site has stopped (bailiff's report (constat d'huissier), dated photographs, letters left unanswered). The guarantor must then arrange completion. If the guarantor refuses or does nothing, the client may sue it, since its undertaking is autonomous and directly enforceable. The drafting of the notification and the building of the evidence file determine the success of the process, hence the value of acting at an early stage.

Delay in the works and penalties

The time for execution is a mandatory particular of the contract (Article L. 231-2 CCH). It generally runs from commencement of the works, after the building permit has been obtained, the loan released and the conditions precedent fulfilled. Exceeding this time gives rise to late-completion penalties.

The minimum amount of the penalties

Article R. 231-14 CCH sets a floor: late-completion penalties may not be less than 1/3000 of the agreed price per day of delay. Any clause providing for penalties below this threshold is deemed not written. For a house costing €250,000, this represents a minimum of approximately €83 per day of delay.

Builders sometimes try to insert clauses limiting their liability: a "holiday" period for the site, very broad grounds of exemption, an excess of several weeks before any count begins. These stipulations are subject to review by the court and, where they empty the protection of its substance, they are set aside. The client must remain alert to alleged "legitimate grounds for suspension of the time limit": bad weather suspends the time limit only if it is abnormal in character and duly recorded, and not on the builder's mere assertion.

Formal notice, an indispensable first step

To start penalties running and to prepare for any remedy, the client sends the builder a formal notice, by registered letter with acknowledgement of receipt, recalling the contractual completion date, recording the delay and claiming the penalties due. This letter marks the starting point of the dispute and usefully brings the purely commercial dialogue to an end. It must be precise: reference of the contract, applicable articles, amount claimed, time allowed to put matters right.

Site abandonment: identifying it and reacting

Site abandonment is not defined by a specific provision, but case law characterises it by a prolonged and unjustified interruption of the works, revealing the builder's intention not to continue performance. A stoppage of a few days for delivery of materials is not abandonment; a total absence of activity for several weeks, with no explanation and no resumption despite reminders, is.

Establishing proof of abandonment

Proof is decisive. The client must date and document the stoppage of the site. The strongest means are the report of a bailiff (huissier de justice, now commissaire de justice), which objectively describes the state of progress and the absence of activity, and dated photographs taken at regular intervals. A written record should also be kept of all reminders and the history of payments made as against actual progress.

Take the case of a couple who have paid 60% of the price when the house is only weathertight against water, with no partitions or fittings. If the builder does not return despite two formal notices and a report by a commissaire de justice, the builder's abandonment of the site is established, and the completion guarantee may be called on.

Taking the steps in the right order

The sequence matters. Taking over the site with another company too quickly, without prior formal notice and without approaching the guarantor, may complicate compensation. The recommended order is as follows:

• send the builder a formal notice to resume the works, with a specified period;
• have a bailiff's report drawn up recording the state of the site and the absence of activity;
• notify the default to the completion guarantor and ask for a replacement company to be appointed;
• if the guarantor does nothing, bring legal proceedings, where appropriate in summary proceedings (référé) for urgent measures.

Terminating the contract on one's own initiative without following these steps exposes the client to being accused of a wrongful termination. Termination for the builder's fault is in principle ordered by a court, or takes effect through the operation of strictly regulated termination clauses.

The public-policy protections that the builder cannot exclude

Article L. 230-1 CCH states that the protective provisions of the CCMI are public policy. This means that the builder cannot derogate from them by a clause of the contract, even if the client consents. Any contrary stipulation is deemed not written, that is, removed from the contract without affecting the rest.

The protections that the builder can never exclude include:

• the completion guarantee at an agreed price and within an agreed time (Article L. 231-6 CCH), mandatory from signature;
• the cap on the payment schedule (Article R. 231-7 CCH), which prohibits demanding payments in excess of progress;
• the minimum amount of late-completion penalties, set at 1/3000 of the price per day (Article R. 231-14 CCH);
• the client's right of withdrawal within ten days after notification of the contract (Article L. 231-9 CCH);
• the prohibition on demanding any payment before the date of commencement of the works other than the regulated security deposit;
• the guarantee of refund of sums paid in advance where the works have not started.

These rules form an incompressible core. Where a contract provides, for example, for a payment of 30% on commencement of the works instead of the 15% permitted, the clause is void and the sums unduly paid can be recovered. Likewise, a clause that made the completion guarantee subject to conditions not provided for by law would be set aside. This is precisely the strength of the CCMI: the protections exist regardless of the vigilance of the signatory at the time of signing.

Acceptance, reservations and statutory construction guarantees

On completion, acceptance (réception) marks the starting point of the statutory guarantees under the French Civil Code. The guarantee of perfect completion (garantie de parfait achèvement) (Article 1792-6 of the French Civil Code) covers for one year all defects noted at acceptance or appearing within the year. The guarantee of good functioning (garantie de bon fonctionnement) (Article 1792-3) covers severable fittings for two years. The ten-year guarantee (garantie décennale) (Article 1792) covers for ten years damage that compromises the structural soundness of the works or renders them unfit for their purpose. The matching of each type of defect to the applicable guarantee is set out in our article on the ten-year, two-year and perfect completion guarantees.

At acceptance, the client has an interest in recording in writing all reservations: poor workmanship, non-compliance with the contract, defective finishes. The client may consign the 5% balance of the price until the reservations are lifted, which is a powerful lever. Acceptance is never a mere formality: it fixes the adversarial state of the works and triggers the guarantee periods. On the scope of acceptance of works and the transfer of risk to the client that it brings about, see our analysis of Article 1792-6 of the French Civil Code.

Legal remedies against the builder

When dialogue fails, several routes open up, often complementary.

Summary proceedings for urgent situations

Summary proceedings (référé) make it possible to obtain protective measures quickly. The client may apply for the appointment of a court-appointed expert (Article 145 of the French Code of Civil Procedure) in order to establish the state of the site, cost the works needed for completion and assess the losses. The client may also seek an interim payment (provision) where the builder's or the guarantor's obligation is not seriously open to challenge. The court-appointed expert's report frequently forms the technical foundation of all later proceedings.

Proceedings on the merits against the builder and the guarantor

Proceedings on the merits seek an order against the builder to pay the late-completion penalties, compensation for losses (rehousing costs, additional costs, loss of enjoyment) and, where appropriate, termination of the contract for the builder's fault. The completion guarantor may be joined in the same proceedings, its undertaking being directly enforceable in the event of established default. Bringing the builder and its guarantor together in a single set of proceedings avoids passing the buck on liability and speeds up compensation.

Construction damage insurance

The client must take out construction damage insurance (assurance dommages-ouvrage) before the works begin (Article L. 242-1 of the French Insurance Code). This insurance pre-finances the repair of defects falling within the ten-year guarantee, without waiting for liability to be established in court. It does not cover delay or abandonment as such, but becomes essential once the house is completed, for structural defects appearing after acceptance.

Time limits to watch

Construction disputes are marked by time limits. An action based on the ten-year guarantee is time-barred after ten years from acceptance (Article 1792-4-1 of the French Civil Code). Personal actions arising from the contract are subject to the ordinary-law period of five years (Article 2224 of the French Civil Code). Waiting is rarely a good strategy: evidence deteriorates, the builder may end up in liquidation, and some remedies become time-barred. Consulting a construction lawyer early makes it possible to coordinate these time limits and to preserve all remedies.

Conclusion

The CCMI is not a contract like any other: it is a protective public-policy regime of which the completion guarantee is the main safeguard. Contrary to a widespread belief, a client who is the victim of delay or site abandonment is not alone in the face of an insolvent builder, since a financial third party has undertaken to complete the house at the agreed price and within the agreed time. These protections must still be called on in the right order and with the right evidence.

The absolute priority arises even before signing: do not pay any instalment without having checked that the completion guarantee certificate actually exists and that the payment schedule complies with the statutory caps. In the event of difficulty, the golden rule is to document everything in writing, to have the state of the site recorded by a commissaire de justice, and to serve formal notice on the builder before approaching the guarantor. Before undertaking any takeover of the site or any termination, have your contract and your chronology analysed by a lawyer: a premature or badly sequenced step may jeopardise compensation that is otherwise due in principle.

Frequently asked questions

Can the builder refuse to take out a completion guarantee? No. The completion guarantee is mandatory for every CCMI with supply of plans (Article L. 231-6 CCH) and this obligation is public policy under Article L. 230-1 CCH. A builder who cannot produce a completion guarantee certificate should receive no payment. Signing a contract without this guarantee deprives the client of the essential protection against site abandonment.

What is the minimum amount of late-completion penalties under a CCMI? Article R. 231-14 CCH sets a floor of 1/3000 of the agreed price per day of delay. For a house costing €200,000, this represents approximately €66 per day. Any clause providing for penalties below this threshold is deemed not written and the statutory minimum applies automatically.

How can site abandonment by the builder be proved? Abandonment is characterised by a prolonged and unjustified interruption of the works. The strongest proof is a report by a commissaire de justice describing the state of progress and the absence of activity, supplemented by dated photographs and the history of written reminders. These items are essential in order to call on the completion guarantee and to bring a claim.

What exactly does the CCMI completion guarantee cover? It guarantees completion of the house at the agreed price and within the agreed time (Article L. 231-6 CCH). The guarantor bears the extra costs of replacing the builder, subject to an excess not exceeding 5% of the agreed price, as well as late-completion penalties beyond a threshold. It does not, however, cover defects falling within the ten-year guarantee, which are dealt with by construction damage insurance.

Can I have the house finished by another company without going through the guarantor? This is inadvisable. Unilaterally engaging a replacement company without prior formal notice and without approaching the guarantor may jeopardise compensation and expose the client to a charge of wrongful termination of the contract. The right approach is to serve formal notice on the builder, have the abandonment recorded, then notify the default to the guarantor, who must arrange completion.

Does a contract that is not entitled "CCMI" escape the protections? No. Characterisation as a CCMI depends on the objective conditions laid down by Articles L. 231-1 and L. 232-1 CCH, not on the title chosen by the professional. A "contrat d'entreprise" or a "works contract" may be requalified as a CCMI by the court, with retroactive application of all the guarantees, including the completion guarantee.

What is the time limit for taking action against the builder? Personal actions arising from the contract are time-barred after five years (Article 2224 of the French Civil Code), and an action under the ten-year guarantee after ten years from acceptance (Article 1792-4-1 of the French Civil Code). Given the deterioration of evidence and the risk of the builder's liquidation, it is preferable to act without delay and to consult a lawyer at the first signs of default.