What to expect during your French property purchase
Once you have chosen your French property
Probably after many hours of deliberation and over many fine French courses you will want to know exactly what the French buying process is so that there are no nasty surprises round the corner and so you can plan for the future. Here we try to explain the different steps to be taken, what role everyone plays and what is expected from each person. This article covers negotiation, the survey, the signing of the “Compromis de vente” (preliminary contract), the period between this and the signing of the “Acte de vente” (final deed), and also the role of the notary and his fees. It is important to take tax and legal advice before this preliminary contract is signed on how best to arrange your finances and ownership of the property to minimise tax expenditure and in the future inheritance tax issues.
Negotiation
We are here to guide and assist you through the entire buying process and this includes helping you get the best deal possible on the price of your property. The agent in France may well hint at the lowest price acceptable to the vendor, as they do in England. It is wise to follow what they say as they will know roughly what price will clinch the deal and what would simply annoy the French vendor. You ought to speak to us before you make an offer to clear up any issues that you may not have fully understood and to help with the negotiation but there is nothing wrong with letting the agent know how interested you are and if you are about to make a serious offer. It is a fast paced market out there and you don’t want to lose a fantastic property because you spent too long dithering or trying to obtain a better deal by playing it cool and not making your interests clear.
The survey
Unlike in England the French do not tend to have surveys done to their houses and a French chartered surveyor does not exist. The options available to you are: a British chartered surveyor based in France or a local established builder. It is wise to have someone check the property over and check for any expensive repairs which you can sometimes use to negotiate the price and forecast upcoming expenditure. Leapfrog Properties or the agent in France can help organise this survey for you.
The Compromis de vente
This is the preliminary contract between the buyer and vendor which sets out the exact conditions under which the “Acte de vente” will be completed and how the transfer of the property will take place. It is a binding contract that is signed before any conveyancing takes place by the notary. There is, however, a seven day cooling off period during which the purchaser may pull out without forfeiting any of his deposit (usually 10% of the purchase price). This period begins from the time the buyer receives a signed copy of the compromise and if he decides to pull out of the transaction then he must inform the notaire by written confirmation BEFORE the seven days are over. The buyer does not have to give any particular reason for this and should expect his deposit returned to him within 21 days of the notaire receiving the letter. It must be noted though that if the purchaser pulls out of the deal after this period then he is liable to losing the deposit unless any of the “conditions suspensive” (conditional clauses) are not met. This contract can be signed either at the estate agency itself or at the notaire’s office and can be one which has been drawn up by the estate agency or by the notaire although it is always safer to sign one prepared by a notary as it is more likely to protect you and include more details on the transaction. At this point the notary will spend some time with you on the details of the transaction and outline any “conditions suspensives” such as the contract being subject to mortgage approval for example.
Below we outline what information is held within the compromis
Details of the purchaser and vendor- You will be asked to provide information on your civil status which includes the following: Full names, contact details, passport copies, professions, birth and marriage certificates and details of ex spouses.
- Title details of the property.
- A description of the property and a map of the plot showing its exact location within the commune shown by the “plan cadastral” showing the borders of the property and what buildings are included in the purchase.
- The price of the property.
- The agreed deposit which is usually 10% of the price of the property (excluding the estate agent’s commission). This deposit will normally be held by the appointed Notaire and should be in his account upon signing so be prepared and make sure that you have enough cleared funds to do this.
- Circumstances when the deposit may be forfeited (e.g if the buyer pulls out AFTER seven days of receiving the copy of the signed Compromis)
- Declarations by the vendor and obligations of the purchaser
- Certificates of lead, asbestos and termite surveys (detailed below) or arrangements for them.
- Conditional Clauses that must be fulfilled in order for the sale to take place. These include the standard clauses pertaining to the searches conducted by the Notaire (e.g limitation on the property being used for its intended purpose), claims on the Title, mortgage acceptance etc. Also additional clauses can be inserted if agreed by both parties such as building work to be completed or servicing of boiler, planning permission etc.
- Penalty clauses describing what action is taken if either side fails to fulfil his/her part of the deal.
- Declarations on both the buyer and seller’s capability to fulfil the contract
- Details of (Frais de Notaire) Notary fees.
- Target completion date
- Inventory of items included in the sale
Fortunately in France the law states that the vendor is under a legal obligation to not withhold any information form the buyer and thus the purchaser is very well protected. This includes the following information necessary for the signing of the compromis to take place:
1) The asbestos Survey- Any property built before the 1st of July 1997 must be accompanied by a certificate detailing whether or not asbestos is present in the building materials used in its construction which is valid for one year.
2) The termite certificate- The vendor must show a certificate dated within the last three months showing the absence of termite infection within the property. If the certificate shows that there are in fact termites in the building then he must eradicate them at his own expense and provide a new certificate showing that the building is now free from termites.
3) Lead certificate- If the property was built before January the 1st 1948 and is located in an area which has been identified by the prefecture as an at risk area for containing lead then a certificate must be produced showing its presence or not.
4) Certificat de la loi Carrez: A certificate showing the surface area of each house or flat in a co-owned property.
Those four certificates above are essential to have before the compromis is signed and they are all provided by the vendor. Additional information set out below is what must follow by the vendor as the notaire carries out the conveyancing:
1) The rental status of the property.
2) A certificate to show that the property conforms to the building regulations.
3) The building permission for the property.
4) Whether or not the property has construction insurance if it is less than ten years old or if it has had some work done to it in the last ten years.
5) The heating system
6) The gas supply
7) The safety standard of the swimming pool
8) The drainage system
It is also useful for the buyer to check to see if there is any planning permission on adjacent or nearby property and find out exactly what it is so that you know you are not buying something that will for example shortly have a high rise apartment block built next to it. You can do this simply by visiting the local Mairie (town hall) and asking for it.
What happens after the compromis is signed?
The Notaire now carries out his searches checking records and documentation concerning the property. Remember he is impartial and works for the state, not for the buyer or the vendor so he will be thorough to the point at which he is happy that the sale conforms to French law. This could take up to three months and you should use the target completion date to base your planning around but do not use it as a definitive completion date as it is hard to predict exactly how long it will take the Notaire to complete his work. Therefore you should keep in constant communication with the Notaire to find out how it is going and get an exact completion date nearer the time.
What exactly are the duties of the Notaire?
He must ensure that all the conditional clauses have been fulfilled and that the vendor has given full and complete information regarding the property to the buyer. The following checks are also done by him:
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Checking that the title of the property is correct, that any co-ownership records are up to date and check the exact location within the commune.
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Establish the identity of both parties
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Mortgages have been approved and the purchase price will be sufficient to cover the mortgage.
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Rights of way within the property
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Verifying that the property conforms to the building regulations of the commune
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The co-ownership situation
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Rental situation
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Public works that may impact the property
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Ensure there are no covenants other than those within the contract that might adversely affect the property
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Inform any people entitled to pre-emption rights of the sale
Notary fees
These can range anywhere between 3% and 13% of the purchase price of the property- New builds tend to be about 3% while the average is between 7% and 8%. As these are fixed by law (much like stamp duty) its does not matter which notary you appoint as the price will be the same.
And finally….
When you are finally given a date for the signing of the Acte Authentique (Final Deed) you can organise your removals company and your travel arrangements to the Notaire’s office for the final signing. (If you cannot make it you can give someone power of attorney to sign on your behalf). NB. It is important that you make sure all the money required for the transaction including the Notaire’s fees are in the Notaire’s bank account BEFORE your completion date. The final deeds will be read out loud in the office, deeds signed and the property will become officially yours!
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