The article 58 of law ALUR, which came into force on the 26th March 2014, created an article 9-1 in the law no 65-557 of 10 July 1965 related to regulations governing the co-ownership of constructed buildings.
Under this new provision, all owners of a French property located in a building, which is under a co-ownership status (“co-propriété“), are now required to take out public liability insurance, whether they are occupying their homes or not.
The reasons behind this new legislation lie in the fact that about 5% of occupant homeowners did not have insurance and 50% of non-occupant homeowners were not insured either.
It is now mandatory for owners of a French property located in a building under a co-ownership status to have home insurance.
However, the obligation is confined to cover public liability (“assurance de responsabilité civile”).
French Insurance companies are now offering insurance products to non-occupant homebuyers covering their public liability (i.e. damages suffered by tenants), multi-risks (fire, water damages, thefts) as well as payment of mortgage installments or rents in the event of a major accident.
The original text provided that the obligation of insurance was monitored by the syndic (co-owners representative) but this provision was deleted in the final text.
No control system, or no sanctions are imposed by the law ALUR. In case of lack of insurance, the liability of the syndic seems excluded.
Furthermore, the law ALUR has also created the possibility for the homeowner to contract dwelling insurance for and behalf of the tenant if the later fails to produce his insurance certificate (in France tenants of an unfurnished property must have a dwelling insurance). This faculty concerns residential leases governed by the law of 6 July 1989. The owners can deduct the insurance premium from the rents.
If you have any questions on this topic, please do not hesitate to contact Loic Raboteau via email at loicr@bandmlaw.co.uk or tel on +44 (0) 207 356 0833.
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