> LEGAL ASPECTS
First stage - Viewing the property
This will occur with the estate agent, commercial agent, estate agent employee or the vendor him or herself in the case of a direct purchase. You will normally be required to sign a 'bon de visite' after the viewing if you have visited the property via the intermediary of an agent. This document attests to the fact that you viewed the property on that date and is essentially for the purposes of proving this fact should you then deal with the vendor directly. Should you do this, you should be aware that the agent may be entitled to claim the agency fee from you.
When viewing, you may wish to take the opportunity to discuss various matters relating to the property and you may consider it prudent to take notes and photographs. Issues to discuss would include:
- drainage system;
- rights of way or other easements that may affect the property or that the property may benefit from;
- whether particular contents will be included in the purchase price or whether you can buy them separately;
- whether the property is sold with vacant possession. You should pay particular attention should you see that part of the property has livestock on it as rural tenancies (bail rural) can automatically transmit to new owners.
Second stage : The first contract
Those who have purchased property in certain countries will be all too aware of the fact that after an offer, several weeks can elapse before any binding agreement is entered into and then one party can pull out just before exchange of contracts with no recourse possible, thus leading to a loss of money and time. The French system seeks to avoid this possibility and it is this aspect which is fundamentally different from real estate purchases in some other countries.
In France, after an offer is made on a property and accepted, a compromis or sous-seing priv�is drawn up. There is also another form of contract known as the promise to sell or purchase (promesse de vente or promesse d'achat) which functions in a different manner and is most often encountered in the Paris region. This contract can come very shortly after an offer, maybe even on the same day, and is extremely important because it lays down the terms and conditions of the purchase and governs the timetable, the checks to be made e.t.c.. Both parties will be tied into the purchase of the property subject to conditions that have to be met prior to completion taking place (conditions suspensives). If the conditions are met then the sale will occur. If they are not met, both parties will be free of any engagement and the deposit paid will be returned to the purchaser. If the conditions are met but one party decides not to go ahead, what occurs will normally be governed by the clause in the compromis in this respect (clause p�ale) and one party can take legal action to force the other to respect his or her obligations. Generally if it is the purchaser who does not wish to proceed, he or she will lose the deposit and may be liable to pay additional compensation.
The following are types of conditions suspensives of a contract:
- that there is nothing in the town planning documentation that adversely affects the property or is likely to diminish its value e.g. a plan to build a TGV route across the garden;
- that there are no easements over the property that have not been revealed to the purchaser;
- that there is no mortgage over the property that cannot be paid off from the purchase price;
- that the purchaser obtains a mortgage;
- that the reports into termites, lead and/or asbestos that are required by the law applicable to the property do not reveal the presence of active termites, lead or asbestos;
- that outline planning permission is obtained for conversion or extension of the property.
There are also a number of other conditions that may be required depending upon the individual circumstances. Care should always be taken to ensure that these conditions are validly worded and offer as much protection as possible to the parties.
In relation to the asbestos, termite and lead reports the general practice now is that these are drawn up and produced at the time of the first contract. Whether the reports are compulsory will depend upon the age of the property and, for lead and termites, where it is situated geographically.
You will purchase the property in the condition that it is in upon the date of completion. The vendor, unless he or she is a professional estate agent, only owes you a guarantee for defects in certain narrow circumstances. It is very much a case of 'caveat emptor' or 'buyer beware'.
In this context, it should be noted that surveys are not common practice in France. Should you require a survey then it is possible for one to be undertaken, though the person responsible for drafting the survey should be carefully chosen. It is also advised that a survey should be completed prior to the cooling off period (referred to immediately below) to enable you to have the choice of not proceeding if you are not satisfied with the outcome. If the vendor agrees, it is possible to include a condition suspensive relating to the obtaining of the survey but this needs to be carefully worded to ensure that you are protected if the results are unsatisfactory. A general 'subject to survey' condition would not be sufficient.
You will benefit from a seven day cooling off period at the first contract stage. The exact way this works will depend upon each case but usually the signed contract will be sent to you by recorded delivery letter. If you decide to withdraw during the cooling off period, you do not have to provide a reason and any deposit paid must be returned within 21 days of the date of the withdrawal. The vendor does not benefit from a cooling off period.
The deposit is also payable at this time. The deposit can be up to 10% of the purchase price and should be transferred directly to the notaire's account or to the escrow account of an agent if there is such a facility. It will then be held until completion occurs and will be put towards the purchase price. It will not earn interest. The best means of paying the deposit is often by transfer to the notaire's/agent's bank account as there can be difficulties with cheques that are not drawn on a French bank account (even Euro cheques). Never pay cash as it can be impossible to prove payment and in the hands of an unscrupulous person it can disappear very quickly if a refund is claimed!
Third stage : The intermediary period
This is the period when the notaire will undertake his or her work in relation to the conveyancing process. This period only commences once the first contract has been finalised. The notaire is responsible for contacting the various administrative bodies to notify them of the sale, obtaining the necessary paperwork, commissioning the checks and searches e.t.c.
The notaire will require copies of the following documents from you:
- birth certificate
- marriage and any divorce certificate(s)
- passport
- any other certificates that may be relevant e.g. death certificate of a late spouse.
Some notaires will require a translation of the original documents.
Fourth and last stage : Completion
In France, completion occurs by the signing of a deed (acte authentique). The signing of the acte authentique will be witnessed by the notaire. The acte should contain full information about the purchasing parties, the property, title to the property, declarations for the taxation authorities and the results of the various checks, searches and reports. It should also contain details of how the purchasers will own the property between them.
All parties should be present at the signing. If one party cannot be present then a power of attorney (procuration) will have to be drafted. The signing and witnessing of this document can be subject to particular rules and the exact requirements will depend upon the precise circumstances. For example, it may be necessary to sign the procuration in front of a lawyer in the home country and then have it legalised by the insertion of what is known as an 'apostille'.
Usually possession of the property is taken immediately after the acte has been signed and witnessed. This may not be the case if the property is rented out (on this point, particular care should be taken as tenants have extensive rights in France about which a purchaser should be fully aware before taking them on) or if it is the purchase of a new development of which the construction is still ongoing.
If the taking of possession is delayed for a reason such as to allow time for clearance of the property, it is possible to include a clause in the deed specifying a deadline for the handover of possession, with a sum withheld from the vendor until this is complied with and a daily penalty if the deadline is exceeded (known as a clause d'astreinte).
Payment of the purchase price and all the fees (minus any deposit that has already been paid) will be required in cleared funds before completion can occur. You should thus ensure that the payment is made in a timely fashion in a means acceptable to the notaire (often a direct bank transfer is the safest form of making the payment). Attention should be paid to the fact that delays can occur when transferring money to a notaire due to anti-money laundering regulations and you should preferably allow in the region of 5 to 10 working days to be certain that there is sufficient time for the funds to clear.
It is highly advisable to view the property prior to the completion to ensure that the vendor has respected his obligation to clear the property of furniture (unless it has been agreed otherwise), has not made any alterations to the property that were not agreed upon and generally to check that the property has not been damaged since the initial viewing. Also, you can ensure that any items that it was agreed should remain are still in the property. This is one way of safeguarding yourself against being the victim of one of the horror stories that many of us have heard about as immediate action can be taken in the event that the vendor has breached his or her obligations (for example by using a clause d'astreinte).
NB : The above outline does not constitute legal advice and is provided for purely informative purposes. Whenever you feel uncomfortable with a particular situation or deem it necessary to seek legal advice, as may also be the case with inheritance issues and taxation matters in addition to the purchasing procedure, we would encourage you to do so as a matter of course.
