The system of buying a property in France is not so different from the one in the UK. Balancing the two systems, none is better or worse than the other but they both have their particularities. Whereas exchange takes place after the formalities have been carried out in England, the French exchange (signing of initial contract) takes place prior to carrying out the searches. The purpose of this article is to give you an indication of the process of purchasing a property in France. In any case it will replace any advice that you would seek through a professional.
1. LOOKING FOR A PROPERTY
The first step will be to seek a property that you like. Properties in France are mainly marketed by Estate agents. They are professional who are registered and hold a professional certificate to practice. They usually take instructions from sellers who need to sell their property. The Estate agent's fees are not regulated and are totally free. Notaires in FRANCE have also the right to market properties on behalf of their clients. Not all Notarial offices have a sales department. Their fees are lower than estate agents and regulated by French Law.
I will not tell you what to do when you visit a property but it is sensible to look around the property and make sure that you have not noticed anything that may concern you. Do you have direct access from the main road? Any recent work that would require authorisation and insurance? Any visible easement? And most importantly planning permission for the property? The list is not exhaustive but it gives you an idea where to start.
It is difficult for an agent or Notaire to provide the purchasers with a diagnostics report on the property because some of the diagnostics are only valid for a limited period of time. Nevertheless the title should provide you with some indications if the current owner purchased it only a few years ago.
You can also discuss with the agent or Notaire fixtures and fittings and contents. They will have to discuss what will be left in the property and whether or not it is included in the original price.
2. MAKING AN OFFER
Once the property has been located, you will usually be requested to make an offer to the vendors. An offer can be made verbally or in writing. It is difficult to accept an oral offer because it will not necessarily bind the person who makes it to a contract and it could be complicated for the other party to prove that his Buying a Property in France 2018 contracting party wished to proceed. It is for the reason that written offers are always requested by the estate agent or vendors. Since the reform of contract law in 2016, the code civil has introduced articles regulating offers. Without going through the whole process of making an offer, you should always remember that an offer accepted is a contract and could lead to several issues or problems if it has not been drafted properly to protect your interests.
You will always read that the offer is the preliminary step to the signing of the initial contract but in reality any vendor could still force the sale with an accepted offer. It will be important for the purchasers to seek legal advice to help them make the offer (if they have not received a pre-standard form from the estate agent) and to be careful with the wording so as not to put them in a situation where they might be bound to the purchase even before signing a contract agreeing the terms and conditions and notably any let out conditions.
3. SIGNING OF THE INITIAL CONTRACT
Once the offer is accepted and parties have agreed to sign an initial contract, the Notaire should be appointed to draft it. This is one of the most important moments of the transaction because the contract will fix the conditions of the sale including those agreed by the parties. There are several forms of contracts to be used in FRANCE, promesse unilaterale, promesse synallagmatique de vente (also known as compromis de vente), vente autonome, vente conditionnelle (mainly used by estate agents with their pre format contract), all of them with different particularities. The most common are the promesse unilaterale, mainly used by Parisian Notaires, that will commit one party only or the compromis de vente which will bind both parties to the transaction under conditions.
The latter is the most common sale agreement used by Notaires and estate agent. Contrary to the promesse unilaterale, the parties, i.e seller and buyer, will be bound by the sale. The sale is agreed but the transfer of ownership is postponed until the searches are carried out by the Notaire and any let out condition fulfilled.
A deposit of 10% is usually payable by the purchaser. The sum will be offset from the price should the transaction go ahead or allocated to the seller should the purchaser withdraw without any valid reason. The failure by one party to complete will not exempt him from being forced to complete by the Court. The deposit paid by the purchaser will be used as compensation to the seller but he will still have the right to continue the procedure and request the purchaser to complete.
As far as the conditions of the contract are concerned, the purchasers can request suspensive condition such as the obtaining of a mortgage, sale of their property, planning permission for work to be carried out. Be aware that the conditions set out above are only given as an example and each of them will need to be drafted and comply with European or French law. You can add any condition that you would like providing that it is permitted or feasible as per the law.
The contract will also set a completion date. Please remember that unlike in England where parties are really committed to completion date, in France it is more a provisional date that can change if one of the searches has not been received by the Notaire, the mortgage of the purchaser is delayed, or planning permission not granted.
4. COOLING OFF PERIOD/LOCAL SEARCHES
Terms of the contract agreed, contract signed by both parties, then the next step is the cooling off period that benefits the purchasers. Under French law the purchasers have a period of 10 days to withdraw from the contract without losing his deposit or being compelled to complete. The cooling off period will start the day after the contract is notified to the purchasers either by post or electronic mail (most used notifications).
However, for the past few months we have seen the Court rendering important decisions regarding cooling off periods, and Notaires and estate agents should be aware of them before sending any registered post to the purchasers (for further information on the subject please visit my website - news).
The Notaire will then carry out the searches with the local authorities and land registry.
Depending on the area where you are buying, your property may be subject to different searches that may delay completion. For instance the sale of the property may be subject to the right of pre-emption of the agricultural body (SAFER) and a delay of two months will be required to complete (unless you are willing to pay a fee that can vary from 100â‚¬ to 600â‚¬) to have a response from the body within a couple of weeks.
Final step is completion at the Notaire's office. The Notaire is responsible for drafting the final deed which will be the purchasers' title deed. Before completing he will request the purchasers to pay the provision of fees that will cover his fees and stamp duty (for clarification, please refer to my recent article on Notaire's fees on Facebook).
After reading the contract to the parties, with the assistance of a translator if required, he will provide the parties with a certificate of completion. The document will enable the vendors to terminate his insurance contract and switch utilities. It will have the same purpose for the purchasers.
The title deed will be registered at the land registry and a certified copy returned to the purchasers within a few months.
During the process I will never remind my clients enough that they also have to take into consideration the estate planning aspect of the transaction. Buying a property abroad does not necessarily mean that you can do whatever you want when it comes to estate planning. There is always a solution and sometimes it is wise to discuss about it before completing