FURTHER UPDATE: Covid 19 – New Rulings Concerning Property Sales

Editor’s note: This article is an update on a previous article relating to French property sales procedures under Covid-19

The French government has introduced various emergency rulings on 25^th March 2020, due to the Covid-19 pandemic. One particular ruling, the ‘suspension of certain time limits prescribed by the law’, has a significative impact on property sales. This ruling has been initiated in order to neutralise the negative effects of exceeding the existing legal, contractual or administrative time limits during the “legally protected period”. Here are some important dates to help understand the ruling:

• Lockdown 17^th March – 15^th April 2020 – (likely to be extended)
• State of emergency – 24^th March 2020 – 24^th May 2020
• Legally protected period (LPP) – 12^th March 2020 – 24^th June 2020

Another ruling published on the 16^th April 2020 brings important modifications/new interpretations to the previous ruling on the 25^th March 2020.

1. Nullify the effects of exceeding the legal time period when ending during the LPP

Purchaser’s cooling off period

The 10-day cooling off period is now excluded from the former ruling and cannot be extended.

Mandate cooling off period

The 14-day cooling off period for mandates does not come under the initial ruling on the 25^th March, and therefore this period has not been extended.

Obtaining as mortgage (as a condition of a purchase)

The delay remains unchanged.

Rule: According to article L313-41 of the Consumer Code, a 1-month minimum time period is allowed for obtaining the mortgage offer. In reality, 45 or 60 days are often provided.

Concerning: all sales whereby the suspensive condition to obtain a mortgage comes to an end during the LPP.

Solution: 24^th June 2020 + 1 month (or longer if stipulated in the pre-sale contract) = the mortgage offer must be obtained by the 24^th July 2020 in this example.

2. Nullify the effects of exceeding the contractual time period when this ends during the LPP and
3. Nullify the effects of exceeding administrative time period when this ends during the LPP.

Replacing of the fixed delay period for a sliding delay period

The initial ruling stated that the delay to execute a contractual or adminIstrative obligation without sanction was to be extended to 24^th July 2020 (one month after the end of the LPP). This fixed system is to be replaced with a sliding system. The delay is suspended from the start of the LPP for the entire term of the LPP, and then recommences on 24^th June 2020 from the point it left off on the 12^th March 2020.

Remote signing of acts by notaires

A new ruling brought in on 3^rd April 2020 authorises the notaire to sign acts remotely without the presence or representation of the parties involved from 5^th April 2020. This is a step forward, however many notaires are not set up to work remotely, and to ensure the steps required for this to happen, and so it is not guaranteed that your signing can go ahead. This ruling is in place for one month after the end of the state of emergence i.e. currently 24^th June 2020.

Many notaires are working and pre-sale contracts (compromis de vente or promesse de vente) are being signed, and completions are happening where possible.

These new measures have been brought in to allow the property market to pick up as quickly as possible after the state of emergency is over.

Jane Thom of estate agency Agence Thom www.agencethom.com

 

FrenchEntrée Editor’s comment:

In a move to help the construction and real estate industries, the French government has amended its 25 March 2020 bill which had extended the deadlines for retraction from a compromis de vente (sale agreement) and examination of planning applications.

This meant that buyers who wished to cancel the compromis could not do so, and sellers would have had to face much longer sale periods. It became clear that buyers and sellers would have to wait until the end of the summer to implement agreements made at the beginning of the year.

These legal deadlines have now been shortened, so if you signed a compromis de vente during the state of health emergency, the withdrawal period now runs normally. For appeals, however, a minimum period of seven days must be observed.

“It appeared that there were problems with some of the provisions of this text, which is why a new ordinance [bill] was issued on 15 April,” said the Office of the Minister of Housing. However, this new version of the bill will only be effective if public services and notaires can carry out their administrative duties.