The French Hotel Industry
Preventive referral processes and summary proceedings: avoiding the pitfalls of hotel construction or renovation in densely-populated areas like in Paris
THE FRENCH HOTEL INDUSTRY
With around 1 560 establishments and a further 80 projects in the pipeline, the City of Light is a veritable breeding ground for hotels. Paris' successful bid to host the 2024 Olympic Games will undoubtedly provide an excellent excuse for many properties to treat themselves to a makeover. All well and good, but heavy construction or renovation work can have significant repercussions in densely-populated areas, and be intensely irritating for neighbors. The law makes provisions for such work, which should, in theory, go without a hitch. Yet in our experience, this is not always the case, and one way of attempting to stave off problems and save money is to undertake a preventive referral process.
Before embarking on a hotel construction or renovation project, it is recommended that the developer or owner instigate so-called preventive summary proceedings, since such work could affect other buildings in the neighborhood and lead to significant financial losses. The purpose of these proceedings is to have an independent court-appointed expert assess the condition of the buildings surrounding the project in question. This expert is appointed by the president of the civil court of the area in which project is located. To kick off the proceedings, the hotel developer or owner must request that a bailiff serve its neighbors with a summons.
The interest of the preventive summary proceedings for the hotel developer or owner is to ward off, as far as possible, any disputes surrounding the condition of neighboring buildings that might arise prior to or during the construction or renovation. The interest of the proceedings for the hotel's neighbors is to have their property's condition validated by an independent expert and to be able to report any disorders that may arise during the demolition or construction phase.
Noise is an important factor to be taken into account here. With this in mind, our firm advised a hotel client, located in an area home to manifold hotels, to undertake a preventive referral process to assess the noise disturbance of its construction site by extending the standard expertise to include acoustic expertise, too. The objective here was to avoid any excessive claim on the part of neighboring hotels in response to complaints from their own guests.
Before undertaking any construction or renovation work, hotel developers or owners are advised to instruct, at their own expense, a specialized lawyer to initiate the summary proceedings. The course of action to be followed by the lawyer in charge of the case is summarized below:
- Prior meeting with the hotel developer or owner and the hotel's management to obtain a clear understanding of the work planned and any anticipated disturbances for neighbors and hotel tenants (e.g. hotel shops and the evaluation of acoustic repercussions during the work).
- Review of documents and exhibits pertaining to the preventive procedure.
- Drafting of the writ of summons to be served by the hotel developer or owner.
- Proceedings before the competent civil court, with the hotel's neighbors represented by their own lawyers (note that it is important to largely anticipate the date of the hearing in order not to push back the work's start date).
- Drafting of submissions, pleadings with a hearing before the civil court.
- Attendance at meetings set up by the court-appointed expert on the site where the work will take place and on the premises of those neighbors likely to be impacted.
- Review of the court-appointed expert's preliminary report and comments sent to the client (after the initial site expertise) and the final report, further to completion of the work.
During the site visit, the expert will request access to all the buildings and premises involved, paying careful attention to the condition of each. He or she may return to the site during the work, should any disorders be reported. This is a lengthy process, familiar to lawyers specialized in construction operations. Indeed, the process entails these lawyers accompanying the expert in scrupulously examining each building from top to bottom for any holes, cracks or fissures.
The expert will then summon all the parties involved, even those who were not present at the hearing, in order to present his or her conclusions. Here, it is important to include all the neighbors affected by the work in order to avoid further hearings, court decisions or site visits.
The applicant (the hotel developer or owner) is responsible for the expert's fees, which usually range from 4 000 € to 7 000 €, depending on the scale of the work. In addition, the applicant must pay the bailiff's fees (around 10% of the afore-mentioned fees). The lawyers involved will generally invoice an additional flat fee to the applicant for each additional site visit and resulting report.
A costly and time-consuming process indeed…. Yet by intervening in the preventive summary proceedings from the off, the lawyers acting for hotel developers or owners gain a global perspective of the operation from start to finish. Indeed, these lawyers can be considered the "common thread" that runs through such operations, and are consequently best placed to efficiently assist developers or owners should any conflict arise, saving them time and money in the long run.
1 Source: In Extenso TCH database 2017, Paris city centre (intra-muros)
2 Procédure de référé préventif
3 Tribunal de Grande Instance
4 Individual owners of buildings, individual land owners or syndicates of co-owners
About Deloitte in France
Deloitte & Associés is the Deloitte Touche Tohmatsu member firm in France and the professional services are delivered by Deloitte & Associés, its subsidiaries and affiliates. Deloitte calls on diversified expertise to cover the scope of services required by its clients of all sizes from all sectors - major multinationals, local micro-companies and medium-sized enterprises. Our 6,000 professionals and partners embody the vigor and success of the Firm in their commitment to clients and their constant concern for service excellence. Deloitte offers a very comprehensive range of services: audit, consulting and risk services, tax and legal, accounting and corporate finance, in accordance with its multidisciplinary strategy and ethical approach. For more information, visit www.deloitte.fr
About In Extenso
A member of Deloitte Touche Tohmatsu, In Extenso is an entity dedicated to small and medium-sized businesses. Almost 3 300 employees in 170 agencies in France serve 70 000 clients, including companies, firms, entrepreneurs, tradesmen and women, self-employed lawyers and doctors, associations and local authorities.