06/12/2017 by FRANCE TAX LAW 0 Comments
Cooling off period and post office
The cooling-off period, which was introduced after the law dated 13th December 2000 and amended by the law Macron dated 6th august 2015, provides that a
non-professional purchaser can withdraw from the contract within a period of ten days starting "from the day after the first notice by the post office”. Notaires and estate agents tend to send contracts duly signed by the parties to each purchaser by registered post without worrying whether or not the recipient of the letter is the actual purchaser.
A recent court case dated 12th October 2017 brought a new position regarding the validity of a cooling off period signed by a third party.
In this case, a contract was sent by registered post to a purchaser and was signed, not by the purchaser himself, but his mother. A few months later and prior to completion, the purchaser decided to withdraw from the transaction invoking that the cooling off period was invalid. The vendor, on his side, requested the payment of the penalty clause as per the stipulations of the contract. The cooling off starts the day after the letter is first presented to the purchaser by the post office, whether he is there or not to sign it. If the recipient is away, the post office will leave a card to collect the letter at the local post office. Whether the purchaser decides to pick it up or not the cooling off period has started and is valid under French Law. When the letter is signed by a third party and not the
recipient, it should still trigger the 10 days because it was presented and signed by someone.
Indeed, the purpose of the rule laid down by Article L. 271-1 of the Construction and Habitation Act is to ensure that the purchaser has received a notification of the contract containing his undertaking, to which he may withdraw within a certain period, the latter only starting when he receives the contract or was informed by post that it was at his disposal.
The High Court of Justice had a different interpretation of the article L 271-1 of the Construction and Habitation Act. The Court considered that the identity of the recipient is important. The mother who signed the letter was not the purchaser, therefore, there was no proof that he has ever been made aware of the cooling off period by his mother. In this case, the vendor also tried to convince the Court that the mother had a verbal mandate to act on behalf of his son. Again the Court ruled out this argument.
There are two conclusions to be drawn from this judgment:
First of all, if the purchaser does not sign the letter himself, the cooling off period cannot begin. Thus, when the letter is presented but not signed by anybody, the cooling off period runs, whereas a letter signed by a third party will not start the cooling off period. We can understand the position of the Court: In the first scenario the recipient knows that a letter was sent to him by the post office. In the second scenario, he may not know it by the negligence of the person who signed on his behalf.
Secondly, the Court accepts that a third party can act on behalf of the purchaser but with a valid mandate. The mandate can be reproduced in the initial contract, or
separately. The attention will be brought to Notaires or Estate agents who draw up contracts to insert a clause listing the potential attorneys.
This is new step in the cooling off period process to reinforce the validity of the notification and protect the vendor. Notaires and estate agents will now have
to ask their clients the identity of any person who may be at their residence and susceptible to sign on their behalf.