Self-Build House Loans and Unfair Deferred Amortisation Clauses: A Clause Conditional on an Acceptance Report Without Reservations Is Unfair (Cass. civ. 1re, 17 December 2025, No. 24-12.411)

French Supreme Court, 1^st Civil Chamber, 17 December 2025, appeal No. 24-12.411

What Was the Background to the Case?

On 10 January 2015, a bank granted a couple a home loan called “Primo +”, intended to finance the construction of a detached house. The structure of the loan includes an initial pre-financing phase, during which the funds are released as the works progress and the borrowers pay only interim interest calculated on the sums already paid out by the lender. This phase is supposed to end when the building site is completed, at the start of amortisation, which corresponds to the beginning of repayment of the capital.

The loan offer, however, contains a singular stipulation (Article 4-C of the specific conditions), which the French Supreme Court reproduces in part: “In the case of the construction of a detached house with a contract (…) Amortisation of the file may only begin after production of the acceptance report without reservations (…). An amount equal to 5% of the amount of the construction contract will be blocked until the works acceptance report has been produced (…). Where a report with reservations is received, payment may not be made. The sole condition for releasing this 5% amount is payment into an escrow account opened with a lawyer”.

In practical terms, this clause has a formidable effect: as long as the borrowers do not produce a report without reservations (which, on an average building site, is rare at the time of the first acceptance), the last 5% instalment of the construction contract is not released, and the start of amortisation remains suspended. To break this deadlock, the only alternative offered by the contract is a deposit of 5% in the hands of a lawyer.

Considering that this clause made them bear excessive interim interest over an artificially prolonged period, and that it also conflicted with the mandatory provisions of the Construction and Housing Code on the deposit of sums where there are reservations, the borrowers sued the bank to have the clause deemed unwritten. The Court of Appeal of Metz, by a judgment of 14 December 2023, ruled in their favour. The bank appealed on points of law. By its judgment of 17 December 2025, the First Civil Chamber dismissed the appeal and fully confirmed the characterisation of the clause as unfair.

How Does the Pre-Financing Phase of a Construction Loan Work?

What Is Interim Interest?

Interim interest is the interest due during the pre-financing phase, on the instalments of capital already released alone. Its cumulative amount depends directly on the duration of this phase: the longer it lasts, the more interest the borrower pays that does not reduce the capital. Conversely, the faster the move to amortisation, the better the total cost of the credit is controlled, since each monthly payment begins to amortise the capital.

For a construction loan of €200,000 released gradually over eighteen months, for example, the difference in interest between a start of amortisation at eighteen months (acceptance without reservations) and a start of amortisation at twenty-four months (postponed because of reservations) can amount to several thousand euros. Over even longer periods, when acceptance drags on, the gap runs to tens of thousands of euros.

When Does Amortisation Normally Begin?

In an economically sound approach, amortisation begins when the property is completed and therefore usable by the borrower. The works acceptance report, signed between the client and the builder, marks this stage. The Construction and Housing Code, in its Article 1792-6 of the Civil Code (code civil) and its Article R. 231-7 (for detached house construction contracts), provides that acceptance may be pronounced with reservations where the work presents minor defects, without this circumstance depriving the client of the use of the property.

Article R. 231-7 of the Construction and Housing Code organises precisely this situation: in the case of acceptance with reservations, a fraction of the price (5%) is deposited with a depositary accepted by both parties, until the reservations are lifted. The legislator has thus itself designed a protective mechanism, which allows the property to be put into service without leaving the builder in control of the remaining 5%, but without paralysing the financial transaction either.

Which Specific Clause Is Held to Be Unfair?

The disputed clause is not the mere rule that amortisation starts at the last release of funds: taken in isolation, this stipulation is customary and does not in itself pose any difficulty. The problem lies in the combination of three elements:

• making the start of amortisation conditional on the production of an acceptance report without reservations;
• where there are reservations, the blocking of the last 5% instalment and therefore the indefinite postponement of the start of amortisation;
• the sole alternative offered to escape the blockage: the deposit of 5% of the construction contract into an escrow account opened with a lawyer.

It is this combination that is problematic. It places the borrowers before a choice between bearing full interest on the entire capital for a period that extends well beyond the end of the works, or agreeing to a deposit with a lawyer, a method that is not the one provided for by the Construction Code and that requires the agreement of the builder, who is not obliged to accept it.

Why Does the Clause Create a Significant Imbalance?

Under former Article L. 132-1 of the Consumer Code (which became, since the Ordinance of 14 March 2016, Article L. 212-1 of the same code), clauses are unfair where their object or effect is to create, to the detriment of the consumer, a significant imbalance between the rights and obligations of the parties. Clauses relating to the main subject matter of the contract are exempt from this review, provided they are clear and intelligible.

The Transparency Requirement and European Case Law

For a clause relating to the main subject matter of the contract to be immune from review for unfair terms, it must be drafted in a clear and intelligible manner. The Court of Justice of the European Union, in its judgment Kásler and Káslerné Rábai of 30 April 2014 (C-26/13), specified that this requirement goes beyond mere grammatical intelligibility: it requires that the contract set out “in a transparent manner the specific functioning of the mechanism” and enable the consumer to assess, on the basis of precise and intelligible criteria, the economic consequences.

In the case under comment, the French Supreme Court considers that the disputed clause, “although comprehensible on a grammatical level, does not enable the consumer to assess the specific economic consequences that follow from it for him or her”. In particular, it does not make it clear that, in the case of a report with reservations, the interest on the loan will continue to be calculated on the entire capital already released, until the 5% has been deposited with a lawyer.

This opacity causes the clause to lose its immunity as regards the main subject matter of the contract. Review of its unfair nature becomes possible again.

Incompatibility with Article R. 231-7 of the Construction Code

The French Supreme Court goes further and identifies a second ground for characterising the clause as unfair: the clause imposes on the borrowers a deposit with a lawyer, whereas Article R. 231-7 of the Construction and Housing Code provides, for detached house construction contracts, for a deposit in the hands of a depositary accepted by both parties.

This mere discrepancy produces a major practical constraint. In order to use the deferred amortisation clause without suffering the indefinite postponement of the start of amortisation, the borrowers must obtain the builder’s agreement to the choice of the lawyer as depositary. If the builder refuses (and it has no legal obligation to accept this particular method), the borrowers find themselves trapped in the pre-financing phase, forced to pay full interest until the reservations are lifted, which may happen months or years later.

The Court of Appeal of Metz, followed by the French Supreme Court, infers from this that the clause “places the borrowers in a position where they cannot comply with the contract concluded with the builder, for lack of the latter’s agreement to this method of deposit, or must extend the pre-financing period solely for the bank’s benefit by increasing the cumulative amount of interim interest”.

What Are the Practical Consequences for Borrowers?

The judgment of 17 December 2025 opens very concrete prospects for two categories of borrowers.

The first category consists of borrowers who took out this type of “self-build house” loan between 2010 and 2020 and whose start of amortisation was postponed for several months or several years because of acceptance reservations. They bore higher interim interest than would have been justified by a start of amortisation at the normal date of completion of the works. This excess interest constitutes, for the bank, a sum unduly received that must be returned when the clause is deemed unwritten.

The second category consists of borrowers whose loan is still active today, or who have repaid early. For them, the calculation of the loss must include all the interim interest paid over the period in which amortisation should have started had the clause not operated, that is, at the date of acceptance of the works, with or without reservations.

How to Build a Claim for Reimbursement?

For a borrower wishing to rely on this case law, several steps are necessary.

The first step is to gather all of the contractual documentation: loan offer, general conditions, specific conditions, riders, as well as the documents relating to the construction project (detached house construction contract, schedule of calls for payment, acceptance report, letters lifting the reservations). All these documents make it possible to establish precisely the chronology of the building site and of the pre-financing phase.

The second step is to establish the lack of transparency of the clause. It must be shown that, on reading the clause, an average consumer could not have anticipated that:

• the slightest acceptance reservation would indefinitely suspend the start of amortisation;
• a deposit with a lawyer would require the builder’s agreement, and the builder is not obliged to consent to it;
• full interest would continue to run on the entire capital throughout that time.

The third step is to quantify the loss. The calculation will rest on a comparison between the amortisation schedule actually applied and an amortisation schedule reconstructed on the assumption of a start of amortisation at the normal date of completion of the works. The additional cost in interest is the basis of the compensable loss.

The fourth step is to identify the additional grounds likely to strengthen the claim:

• challenging the interest stipulations in the event of an erroneous APR (TAEG);
• liability of the bank for failure to provide information on the specific operation of the clause;
• liability for breach of the duty to warn if the transaction appears, in retrospect, to have been poorly calibrated in relation to the borrower’s financial capacity.

As regards residual compensation levers, it is worth recalling that the bank may also be pursued on the basis of its obligations arising from the RTS technical regulation of the European Banking Authority (Regulatory Technical Standards supplementing PSD2), still underused in practice but which impose precise technical standards, the breach of which may, in certain cases, supplement the traditional grounds.

Conclusion: A Judgment That Validates a Powerful Defence Strategy

The judgment of 17 December 2025 does not create a radically new body of case law. It follows the decision handed down by the same chamber on 25 March 2026 (No. 24-16.108) on the clause switching to amortising loans for interest-only loans (prêts in fine), and more broadly it is in keeping with European case law on the requirement of transparency in figures.

But its practical scope is considerable. It confirms that a clause that appears technically clear, on a grammatical level, may be declared non-transparent because it does not enable the borrower to anticipate concretely the economic consequences of an acceptance with reservations. It also confirms that confrontation with a protective rule (here Article R. 231-7 of the Construction Code) reinforces the unfair nature of a contractual clause that departs from it to the detriment of the consumer.

For the thousands of borrowers who took out this type of loan, the judgment reopens a fertile field of litigation. The firm LE BOT Avocat regularly assists individuals facing these difficulties and, on the basis of a full analysis of the file, carries out the quantified reconstruction of the loss and the formulation of the most appropriate claims for reimbursement.

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