When buying a property in France, you’ll almost certainly sign a document called the compromis de vente, but what does it all mean? Ann Edmondson spells out the first few paragraphs
Understanding the pre-sales contract
If you are moving to France or buying a holiday home there, the compromis de vente is one of the most important documents you will ever sign. Setting out a detailed description of the property and the requirements of the purchaser, this pre-sales contract is legally binding, though you will have a cooling-off period during which you can pull out of the sale without penalty.
For the purposes of this article, I have assumed the purchase of residential property only. This month we’ll be looking at the first paragraphs, covering: The civil status of the parties The cooling-off period The deposit, notaire’s fees and government taxes The description of the property The use of the property
Civil status of the parties ( état civil) This paragraph will include: Full names and wife’s maiden name if applicable Habitual residential address Nationality Whether you are fiscally resident in France or not Marital status Marital regime (this is important under French law as it will determine who is really buying the property, who will own it and what will happen to the property in the event of divorce or death) Profession Date of birth In order for the notaire’s office to draw up the civil status details, both parties will be required to provide valid identification. Where applicable you may also be asked to provide a marriage certificate, divorce affidavit, death certificate and/or affidavit of capacity if you were born abroad.
The civil status check by the notaire also enables the verification of the true identity of the seller, ensuring that they are the true owner of the property and that they have the right to sell it. For example, the owner may have received the property through a gift by a donor who is still alive, and who has forbidden the sale of the property in their lifetime. The cooling-off period ( faculté de retraction) Also known as the period of reflection, the cooling-off period was introduced as a statutory right in 2001 and is now 10 consecutive days. The law was introduced to allow the consumer to ‘cool down’ after making any heat-of-themoment decisions. After its signature the pre-sale contract will normally be sent by registered post with acknowledgement of receipt. The cooling-off period will start the day following the first presentation of the document at your address – regardless of whether or not you are there to receive it – and will run for 10 consecutive days. If the 10th day falls on a Sunday, the deadline is extended to the Monday.
If during this period you decide not to go ahead with the purchase, you have the responsibility of informing the notaire or estate agent by registered letter only. The date of postage will be proof that you have given notification within the 10 days. In this case your deposit will be returned to you, and the seller will be released from their undertaking to sell the property to you.
After the 10-day cooling-off period, you are bound to the sale, and if you change your mind for any reason after this period, it may be much more difficult to get the deposit returned to you. On the other hand, the seller is bound to the pre-sales contract immediately after having signed it. They do not benefit from the cooling-off period.
The deposit ( dépôt de garantie) A deposit of 5% - 10% of the purchase price is usually paid at the time of signing the pre-sales contract. If signing in front of the notaire, and if the deposit is more than €3,000, you will be required to pay by bank transfer. However, if the amount is under €3,000, you can still make this payment by cheque. Notaires’ fees and government taxes ( frais de notaire) Mistakenly called notaires’ fees, the conveyancing costs about 7.5% of the purchase price. This is made up of government taxes and notaire fees. When signing the pre-sales contract, the notaire will make an approximate calculation of their fees, the government taxes and sundry disbursements, and you will be required to make a provisional advance payment to cover these costs. The balance due will be calculated for the completion. On a sale of up to €300,000, for example, the notaire fees and taxes can be roughly broken down as follows: – Purchase price: €300,000 – Taxes: €18,458 – Notaire fees: €3,193
Description of the Property ( designation) The exact address of the property will be stated in this description, known as the designation, and the corresponding section numbers under which the property is registered at the land registry together with the surface area of each section. It is important that you check that the references given in your pre-sales contract correspond to the plans you may
Any works carried out in the past decade will carry a 10-year insurance guarantee so be sure that your seller provides you with this document
have or any checks that you have carried out yourself at the land registry ( cadastre). There will also be a fairly precise description of the property you are buying, be it a house, or an apartment in a co-ownership. If buying a house with land, ensure you know where, if any, the boundary markers are located, and if you are subjected to any easements (rights of way) across your land by a third party, or if indeed, you will need to have right of way across a neighbour’s plot of land for your own access to any ancillary buildings or plots.
If you’re buying in a coownership ( co-propriété), the description will include the floor on which your apartment is located, and the size of your apartment, your notional share of the building, and any cellars, garages or basement units being sold with your apartment. Be sure to check unit numbers correspond to any plans you already have.
Insurance checks Whether buying a house or apartment, if your seller has carried out any renovation works that have required planning permission, ensure that the works conform to the authorisation given in the permission. You may find yourselves the unwitting victim of having to pay for square metres that your seller has not official title to. Any works carried out in the past decade will carry a 10-year insurance guarantee. Be sure that your seller provides you with this document. Any extensions or buildings constructed without proper planning permission will not be covered under insurance in the event of destruction, by fire or otherwise, and you will find it difficult to replace building work that did not legally exist.
Use of the property The notaire will check your intended use of the property. If this should change between the pre-sales contract and the completion, and require either planning permission or the agreement of the co-ownership, this may delay the completion, and cause novation (a new pre-sales contract being written to replace the previous one). The seller has the right to refuse as it means that they will receive the sale price later than originally agreed.
However, if the intended change of use has no impact on the seller, this is usually straightforward. It is always wise nevertheless to keep your notaire and seller informed.
Ann Edmondson guides buyers and sellers through the practical elements of setting up life in France firstname.lastname@example.org