Buying a Luxury French Property – the process

 

Much information is readily available from magazines and internet websites advertising luxury properties for sale in France; it is very easy to get an idea of what type of luxury property is available and at what cost before you actually start your search. Think carefully about the location and type of property. Take into consideration whether you plan for it to be your main residence, second home, holiday home to be let out on occasion, or a property to be let as an investment for the future. Make a list of the important elements. The purchase price, the overall size and number of rooms, is a cave (cellar) or garage essential? Would you prefer a garden, terrace or balcony? These considerations will keep you on the right track to find your ideal property.

Once you have found the luxury property you wish to buy, negotiations will start to secure the property at a price agreed by you and the seller.    When your offer has been accepted by the seller, you will be required to sign a sales contract, the Compromis de vente (sometimes called the Promesse de vente).  The notaire or agent can draft the Compromis de Vente (preliminary sales contract) which will be written in French but you may have an English translation.

 The Notaire:

The notaire is a public official and given the title of Maitre. The notaire is highly qualified in the French legal system and is able to advise about French property, family and succession, and corporate laws. Empowered by the government to legalise property purchase transactions (which cannot be enforced by any other means) he/she is a Public Official and who provides security to the contracts he supervises and is liable for his professional acts. A notaire is responsible for the conveyance, preparing the various documents and confirming the seller’s title to the property, checking that there are no other mortgages on the property etc. The notaire also has indemnity assurance, which provides a financial guarantee to the buyer. The purchaser is free to choose their own notaire, but can use the same notaire as the vendor as notaire fees are fixed and include the French equivalent of stamp duty. These usually range somewhere between 6% and 8% of the purchase price of the property. As these are fixed by law (much like stamp duty in the UK) it does not matter which notary you appoint as the price will be the same. Using two different notaires will not increase the total fees; the fees are split between the two notaires.

COMPROMIS DE VENTE

The Compromis de Vente is a legal contract; you will go through it together with your notaire who will make sure that you are happy with all the details and that the conditions are correct. Whoever is named as the purchaser(s) and if you are intending to use mortgage funds, the same name(s) must appear on your mortgage application.

In this preliminary sales contract details such as:

• Details and identities of the seller and yourself (the purchaser)
• A full description of the property
• The surface area of the property and land
• The purchase price, the breakdown of fees and who will pay each fee
• Details of the notaire and sales agent
• Details of any fixtures and fittings included in the sale~
• Results of reports on asbestos, lead and termites
• Details of your mortgage, the date of when you should have your mortgage offer and the date of completion
• Any let-out clauses (clauses suspensives) and the penalties that will be incurred by you or the vendor if completion does not take place

For you, the purchaser, the clauses suspensives protect the deposit you gave to the notaire or agent as part of your agreement to purchase the property. The most usual is a clause stating that your agreement to purchase is subject to you obtaining mortgage finance.

Other clauses can be inserted, such as the vendor having to carry out necessary repairs or subject to the dimensions of the property corresponding to what is detailed in the Compromis de Vente, and this is where expert legal advice is useful in the negotiation of these clauses.

Once you sign the Compromis de Vente you will be required to pay your deposit (normally 10%) to the notaire which remains in an Escrow account until completition. Once you have signed the Compromis de Vente, the clock starts ticking. There is now a set date by when you should complete on the purchase. You are given a 7 day cooling off to retract from the purchase.

A Survey

Unlike in England the French do not tend to have surveys done to their houses and a French chartered surveyor does not exist.  However there are a number of British chartered surveyors based in France and they can do a variety of services from a small survey to a full structural.  If anything major comes to light then you can sometimes use this to re-negotiate the price agreed on the property

After the Compromis is signed.

The Notaire will now carry out his required searches and conveyancing checking records and documentation concerning the property. The buyer needs certain certificates from the notaire showing that surveys have been carried out to verify any existence of Lead, Asbestos or termites. It is important to remember he/she is totally impartial and works for the French legal system, and will be meticulous to ensure that the sale conforms to French law. This part of the process could take up to three months and in the compromise there will be a date set as the guideline for the final signing and completion.  It is therefore important to keep in touch with your notaire to find out how the process is going so you have an exact idea of the completition date.

To complete……

Once the mortgage offer is received and the notaire has carried out the legal aspects of the sale a mutual time and date for completion will be arranged. It is your responsibility to instruct the notaire to request the mortgage funds from the lender.

Once you know the date you will be completing on your property purchase you will need to make sure your French bank account is open. Funds must be transferred into it in enough time for the completion date and the buildings insurance must be valid from the date of completion. You will need to provide details of the insurance policy at the notaires office.

The final deed of sale which is signed on completion is known as the Acte de Vente (projet d’acte). It will contain much of the same information as in the original Compromis de Vente, but check it through carefully; usually a translator will be requested for you if your French is not fluent. It will state the date that you may move into the property. You will be asked to produce your birth certificate(s) and passport(s) together with marriage certificate/divorce decree if applicable. If you think you may be unable to attend the meeting to sign the Acte de Vente (final deed of sale) you can give a trusted person or friend a power of attorney (procuration) which authorizes them to sign on your behalf.

The Acte de Vente is signed by you, the seller and one notaire. If both you and the seller have different notaires, only one needs to witness the Acte de Vente. Once the Acte de Vente has been signed and witnessed, the notaire has to pay all the taxes, settle all the accounts of the purchase/sale and register the deeds and mortgage. A few months later you will receive a certificate/document informing you that the title has been registered. The original title deed is kept by the notaire, but he is able to make authorized copies.   Also he will give you a one sheet document called an ‘attestation’ which proves you are now the legal owner which is very useful in France and maybe asked for on occasions.

The French Buying Process is extremely well structured and the buyer is very much protected – careful guidance and commitment by dedicated property search experts such as ELITE ESTATES will ensure that every step of the process is fully explained to you.    For anymore questions on this or to talk to someone about the type of luxury property you are looking for in France: contact ts@elite-estates.net

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