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These notes are offered as a general guide as to what actually happens when one sets out to buy a property in France. Procedures may vary from one region to another, and for different types of property, and your own circumstances. However, I hope they may be useful up to the time when more specific information is required.
Up to the point of reaching agreement you will rarely be allowed to visit a house unaccompanied. Surveyors are virtually unknown in most parts of France. As a result buyers tend to make up their own minds regarding the condition of the property, though the agent on the spot will usually be able to recommend an architect or even a local builder who can give advice.
The "asking price" is not necessarily the "selling price", it is quite normal to make offers, and vendors may accept or reject them, or make counterproposals. Once the bargain has been struck verbally the moment has come for the signature of the first contract and the payment of the deposit by the purchaser. This latter is normally 10% of the purchase price and is paid into the client account either of the estate agent or of the Notaire. It is worth noting that it is rarely possible for this money to attract interest while held as a deposit.
This first contract is a 'contrat sous condition suspensive' and is generally referred to as a 'compromis'. The "conditions suspensives" are those over which the contracting parties have no control and the three most common are:
  1. The obtaining of a 'Certificate d'Urbanisme'. This is a document issued by the Planning Authority showing the restrictions, whether architectural or in terms of the usage to which the property may be put. It also shows what, if any. public works are projected which might materially affect the value of the property (it might be wise to make this latter an additional condition!).
  2. The renunciation by the Commune (Municipality) of its right to purchase compulsorily. The Communes have a preemptive right to purchase whenever a sale is agreed but the right is, normally, only exercised when quite large amounts of real agricultural land are in question.
  3. The Obtaining of a 'prÍt' - mortgage to purchase.
Once these conditions are fulfilled, always supposing that they were relevant to the contract and were written into it, the contract is finalized and it remains the business of the Notaire to "reiterate" it in a somewhat different form for the purposes of having it inscribed at the Land Registry. This MUST be done by a Notaire, there is no other way. The buyer has the right to choose the Notaire.
If for any reason, the two parties are not able to be present at the same time it is usual to get one of the parties to sign an unilateral promise which, in fact, to all intents and purposes, becomes the same contract as the 'compromis', as soon as it is accepted and ratified by the other party. They are drawn up to be valid for a short period and must be ratified within that period.
MORTGAGES are usually available from the French Banks (there are also Companies that are set up for this purpose). There is no legal limit on borrowing for a principal residence - it is only limited by what the credit company is prepared to lend. They are not permitted by Law, however to lend more than 50% of the value, usually taken to be the purchase price, for the purchase of a second home.
CONVEYANCING COSTS are always borne by the buyer in France. The amount varies in relation to many different factors and may be as low as 7% or reach figures in excess of 12%.
ESTATE AGENTS COMMISSION is calculated according to a scale laid down by Government Decree. It is usually paid by the vendor, but it is best to clarify this with the agent, as it is about 6% to 10% of the purchase price. As with legal costs much more exact figures can be given when the price and description of the property are known.
CAPITAL GAINS TAX This is, of course, only payable when one sells and has made a capital gain. The law is extremely complex and the only generalization one can make is that the longer one holds a property, the more allowances you are likely to get to set against the tax. However, I mention it at this stage just in case you find that the vendor of what you wish to buy is a nonresident of France. In that case the Law requires that the vendor has a fiscal representative to be responsible for the payment of the capital gains tax. Often the Tax Inspector will waive this condition but this varies and one cannot rely on getting this dispensation. Various categories of person may be the fiscal representative but the one which is always acceptable to the Inspectors is the new owner. You may therefore be asked to take on this responsibility. Should this arise, do not be too daunted. Provided that the sale has been open and above board and a reasonable price was paid in relation to the true value of the property there is very little risk. The far greater risk is that one glosses over the need to have either a waiver or a fiscal representative and that the Notaire finds that he cannot register his 'acte' (the final deed) - that you are not the owner and that the vendor waits ages for his money.
these notes prepared by :
Malcolm Reynard
28 rue des Docteurs Bourguet
34500 Béziers
who can accept no responsibility for their accuracy.
Telephone : +33 (0) 467 280 530
e-mail : volpone@occitan.net
If you need help writing letters in French to Banks, the telephone company,
the social security etc. follow this link : Ecrivain Public / Letter Writer
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Revised -- August 9, 2006