The Compromis de Vente is the first formal and legally binding stage in the property purchase process in France. It is a written contract of sale agreement which legally binds together the seller and purchaser. The format may vary but all Compromis de Vente should state clearly the key points of the sale agreement. The agreement can be drafted either by the estate agent handling the sale or by the Notaire. A Compromis prepared by the estate agent will need to eventually satisfy the Notaire as regards its validity.
The document should contain:
* Details of purchaser and seller (you will need to provide “Civil Status” information including your full names, contact details, professions, birth and marriage certificates, passport copies, details of ex-husbands and wives)
* Confirmation of the name and ownership “Title” details of the property
* A description of the property including reference and map of the plot as it is recorded in the Land Registry of your local Commune
* The price agreed (sometimes furnishings and fittings may be negotiated as a separate amount)
* The deposit agreed. This is usually 10% to be held in escrow by the Notaire or in some cases the agent
* The circumstances under which the deposit may be forfeited
* Some declarations by the vendor about the property
* Some obligations of the purchaser in buying the property
* Arrangements for applicable diagnostics such as lead, asbestos and termites among others
* Provisional conditions or Clauses Suspensives
* Full details of the estate agents fees and provision for legal fees
* Various declarations by both purchaser and vendor about their ability to complete the contract
* Statements describing what happens if either side fails to complete his part of the bargain, e.g. penalty clauses
* The target completion date
* Inventory of items to be included in the price
* Right by the buyer to inspect the property prior to the acte de vente
Expect to pay 10% of the total price agreed for the house (excluding the agents commission)
Methods of payment
Check with your agent or the notaire but generally you will need to have deposited cleared funds into the notaires bank account prior to signing. This can take several days so it is best to do it ahead of time. Bank drafts may be accepted in some situations. Payment can be made into an escrow account or to the Notaire.
These conditions are known as “clauses suspensives” and typically relate to mortgage acceptance, satisfactory planning status or pre-emption by the French Land Commission. You can add your own conditions if the vendor is willing to accept them.
The role of the Notaire
The Notaire acts impartially between vendor and purchaser to conclude the transaction on behalf of the state. It is not mandatory for a notaire to intervene at the compromis or promesse stages.
Loss of deposit
The Compromis de Vente will set out clearly the penalty conditions under which you would forfeit your deposit. Generally speaking, should you back out, the only situation under which you might not forfeit your deposit would be if any of the clause suspensives (provisional conditions) were not met or if you could prove that the vendor made statements about the property which were untrue and which he would have know about at the time of signing.
A target date is set but this should not be relied on too heavily to book travel arrangements etc. Ideally you should wait until the process is well underway before asking your agent or notaire to confirm that all is proceeding according to plan to sign on the date proposed. The duty of the Notaire is primarily to the state and they will not hesitate to delay proceedings if any legal issues have not been adequately resolved.
Translation of the contract
Generally this is regarded as your responsibility. You can either employ a translator or rely on the agent handling the transaction to translate for you.
A vendor’s Notaire
Many property sales are handled by one Notaire, who acts impartially on behalf of both purchaser and vendor. If you wish to have your own Notaire or an English speaking French property legal specialist then this is also acceptable, although fees may be higher. You may wish to do this to ensure an accurate understanding in your own language or, if you are seeking advice on inheritance or capital gains tax issues, to keep your personal affairs outside the domain of the vendor’s Notaire.
Personal information required
The Notaire handling the sale will require your full names, contact details, professions, birth and marriage certificates, passport copies, details of ex-husbands and wives
What is included in the sale
A property may be made up of smaller parcels (parcelles) of land. You should check the Plan Cadastral (map showing the property and it’s parcels) from the French Land Registry to make sure of what you are buying. A copy of the plan will be attached to the contract documentation.
The cooling-off period
You have ten days from the date on which you receive a copy of the signed Compromis (you will generally be given an instruction about this period) during which you can still withdraw from the sale, without penalty. If you decide to withdraw you must communicate this in writing to the Notaire within the ten day period.
The Acte Authentique (Acte de Vente)
This is the final agreement of the sale which you (or a proxy, someone you legally nominate) must sign in the presence of the Notaire after he has read it aloud for both parties
Searches conducted by the Notaire
The Notaire conducts searches regarding public works that may impact the property, changes to the title which may impact the sale or parcel of land. Note that he is not able to conduct searches which reveal any planning applications or proposed developments on adjoining land which may be privately owned. To be safe buyers should always visit the Mairie in their local commune (before signing the Compromis de Vente) to ask about developments, planning applications or changes of land use near their property.
It is not obligatory but it is a good idea to ask for an inventory to be attached to the Compromis de Vente and it should ideally include not just items of furniture but things like light fittings, kitchen units, garden sheds, external ornaments and even sinks and bathroom fittings.
THE PROMESSE DE VENTE
The promesse unilatérale de vente is quite a different contract as it is only the seller who enters into an obligation. It is therefore one-sided. As the buyer you are effectively acquiring an option to buy the property at an agreed price and it prevents the seller from selling to any other party for a period of time, usually between two to three months. As the buyer you pay a sum in consideration for this “freeze”. You can then decide whether or not to exercise this option and you can just let the time elapse. If you decide against proceeding with the purchase of the property, the seller gets to keep the money paid to reserve the property but you as the buyer are under no further obligation in regards to going ahead with the purchase or compensating the seller. If there was a conditional clause included in the wording that was up to the seller to fulfill and hasn’t been achieved then you as the buyer are entitled to get back the money that you paid for the option. In theory this option is enforceable and obligates the seller to sell the property at the agreed price if the buyer decides to exercise the option, but in practice the court is rarely, if ever, going to force the sale and will rather demand compensation in the form of a lump sum plus interest from the seller to the buyer. In all other respects such as cooling-off period or conditional clauses, the elements of the promesse are similar to the compromis document.
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This article is for general information purposes only and does not constitute legal, or other professional advice.