The objective of structural damage insurance is to quickly take charge of claims compromising the built structure. It operates for a period of ten years and is passed on to successive owners.
The property developer having the quality of owner, he is legally bound to take out damage insurance, even if he calls on construction professionals covered by a ten-year guarantee.
Clear explanations to better understand the interest of book damage insurance for property developers …
Decennial insurance does not replace structural damage insurance
Since structural damage insurance covers the same risks as decennial insurance, many new builders or contractors think that they can ignore the purchase of structural damage insurance.
But it is not. Any project owner is legally obliged to present a damage insurance certificate before the start of a project. Although each stakeholder, craftsman, construction professional or construction company, must give the promoter a ten-year insurance certificate, this in no way releases the latter from his responsibilities.
Indeed, the structural damage insurance comes, unlike the ten-year guarantee, quickly compensating the insured damage, namely those compromising the solidity of the building or rendering the property unfit for its usual use.
It therefore allows the developer to restore the property as quickly as possible, thereby ensuring the safety of the owner or tenant occupying the premises. Any promoter who has not taken out property damage insurance can be legally prosecuted: he incurs a fine of up to 75,000 euros and six months in prison.
Why should the property developer take out book damage insurance?
The real estate developer is a client. It is he who decides to carry out the construction work in order to sell the goods that he has had built on his behalf, most often as part of a real estate program.
He calls on many professional stakeholders to design and bring the work to life: architect, surveyor, project manager, design office, building companies (mason, carpenter, roofer, soloist, painter, heating engineer, plumber) , etc.
Each participant is required to have a ten-year guarantee. However, it is the real estate developer who decides on the erection and construction of the building. Whether it concerns houses, buildings or professional premises, he must assume the risk inherent in his profession and be the holder of structural damage insurance.
This legal obligation also enhances the work of the property developer. If the sites are well organized and well designed, the risk of seeing the construction degraded is minimal and a guarantee of professionalism.
What does book damage insurance include?
The property developer’s damage insurance must take effect before the opening of the construction site. Even if the case is rarer, it is the same for renovation or rehabilitation projects of real estate.
The criterion to be retained is as follows: the structural damage insurance is compulsory when the work carried out is likely to compromise the solidity of the building or render the property uninhabitable.
If the structure is damaged in the ten years following the construction work, the damage-to-work contract allows rapid management of repair and restoration work, without first seeking the responsibility of the various stakeholders on the site.
Note that it only intervenes after the expiration of the one-year warranty known as the perfect completion of the work, unless formal notice remains unsuccessful to the person concerned. In all cases, the liability actions fall to the insurer.
Structural damage insurance thus compensates for poor workmanship and construction defects. It is valid even if the damage results from the instability of the ground. In other words, it makes it possible to make the property conform to its expected use as quickly as possible.
This insurance is essential so that the tenant or the owner can enjoy his property in decent conditions, without compromising his state of health. Conversely, the ten-year guarantee often comes into play only after months, or even years, of liability studies and legal proceedings.
Damage to property developer, essential to sell
The insurance policy indicating book damage insurance is essential for two key players in the real estate world, with which the real estate developer works on a regular basis:
- The banker: he requires property damage insurance so that the property developer can have access to the loan
- The notary: he must attach the property damage insurance to any contract of sale or sale of the property
In addition, it is transferable insurance. It covers a specific property and not a person. If three owners succeed each other in the same property during the ten years following its construction, each one can claim the damage-to-work insurance for the serious damage that he has observed on the building.
The absence of a structural damage guarantee therefore poses a heavy risk on the shoulders of the property developer. Not only does it make the sale of a property very complicated and lower its price, but in addition the developer remains responsible for construction defects and poor workmanship, including in the event of bankruptcy or cessation of activity.
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