French Conveyancing

An outline of the Legal Process of Purchasing French Property

In France, the process of purchasing a property also falls broadly into two stages, the preliminary stage and completion. The difference with the English system lies in the detail. The basic difference is that under the French system both the vendor and purchaser are forced to commit themselves to the transaction much earlier than in England.

The Preliminary Stage

The French preliminary stage is marked by an early "exchange of contracts" to use English legal parlance. Once a prospective purchaser after viewing a property has decided to buy it, he will be invited, generally by the estate agent handling the property, to enter into a binding written contract and pay a deposit. This contract will take the form of either an option to purchase (promesse de vente) or a conditional contract (compromis). Both of these types of contract generally comes in the shape of a model form, into which the estate agent enters the particulars of the vendor and purchaser, a description of the property, the price consideration and the amount of the deposit . Although different in scope and nature each contract has a common thread running through it , which is that once signed the purchaser will not be able to withdraw from his bargain at will, without a penalty, unless he can show good cause. This rigorous rule is mitigated to a degree as follows :

- a non-business purchaser is given a 7 days "cooling off" period during which to reconsider his decision and resile from it, if he chooses.

- If one is intending to buy the property with the help of a mortgage loan, genuine and properly documented failure to secure such a loan, will cause the contract to lapse without penalty.

- Provided the contract has been properly drawn then if subsequent searches show the property to be burdened by various onerous encumbrances of a financial or planning nature, the purchaser may resile from his purchase without penalty in most circumstances.

As is apparent from the foregoing, in a French purchase of land searches and inquiries follow upon the signing of a binding contract rather than precede it as is the practice in England. Once this signing takes place and the deposit is paid, the sale of land proceeds to its "completion" stage.

The Completion Stage

Whereas in England the preliminary stage is often of a lengthy duration, while the completion stage in generally short, matters in France operate in the exact reverse. There the preliminary stage which culminates in the signing of the contract and the payment of a deposit takes place quickly, while the completion stage generally proceeds at a leisurely pace.

It is not uncommon for over three months to elapse between the signing of the contract and the execution of the deed of transfer which marks the completion of the purchase process. It is usually at "completion" stage, French style, that the services of a notaire are retained, generally by the vendor or his estate agent. A French notaire, is a cross between an English solicitor, a licensed conveyancer, and a tax collector, an unfamiliar hybrid creature to the English eye. To this panoply of functions, he may add, if he chooses, that of estate agent. A notaire holds his office from the French government, and the number of notaires practising throughout France is limited. It must be added that unlike solicitors in England, notaires do not do litigation.

The Role of the Notaire during Completion

In his capacity as licensed conveyancer, the notaire, has a monopoly over drafting deeds of transfer of property. The French land registry office, will only enter on the land registry, such deeds of transfer as have been executed by a notaire. In other words, in order to acquire a title over land good against the whole world, a purchaser must have his purchase embodied in a deed of transfer prepared by a notaire. Although, generally retained by the vendor, the notaire is required by law, to hold an even hand between the vendor and the purchaser and see that their respective interests are preserved. In practice the fees of the notaire,charged on a degressive graduated fee set by statute (unless they are off scale), are paid by the purchaser.

It is in this character of "officer " appointed by the government that the notaire, acting for both parties, will requisition an official search in the land charges register with a view to finding out if the land is encumbered by charges by way of security, whether there are cautions against it and raise inquiries with the relevant authorities regarding planning restrictions and environmental problems. Once, it is clear that a "clean" title can be made over and that there a no onerous burdens, the notaire will advise the parties that the sale can proceed to completion.

A date will be set for such completion and on the day the vendor and purchaser will attend at the offices of the notaire, where the deed of transfer will be signed by the parties and the notaire, after the deed has been read out to them by him. This time consuming procedure can be dispensed with, through the device of getting the parties each to sign beforehand a special power authorizing a clerk of the notaire to act as its attorney and sign on its behalf on the day of completion without their needing to be physically present. The execution of the deed of transfer and the payment of the price outstanding take place concurrently and the right of entry on the part of the buyer is exercised at that stage.

It is also at the time of completion that the fees accruing to the notaire are discharged and that ad valorem stamp duty payable on the transaction is levied. Following completion, the notaire, will lodge the deed of transfer with the local land registry office, together with any deed creating a mortgage charge, if the property has been purchased with the help of a mortgage advance. This deed of charge is executed by the notaire at the time of completion and the cost thereof charged to the borrower (purchaser) on a graduated statutory scale. Evidence of completion, comes in the form of a declaration provided by the Notaire to the Purchaser on the day of completion ("attestation") and thereafter a certified copy of the deed of transfer, issued by the notaire to the purchaser. The original deed of transfer remains on file at the offices of the Notaire. The French local land registry office also holds a copy.

Advice for prospective French Property Purchasers

On the strength of this outline it may appear that the legal aspects of purchasing property in France are fairly straightforward and that a would be English purchaser is secure in placing reliance in the expertise of the notaire dealing with completion. As always unfortunately the devil is in the detail, and the notaire, will only right transactions which are bad on the face of it, and seldom if ever ensure that the purchaser averts avoidable snares which are obvious to professionals but not to the lay person. One of the main reasons for this has to do with the fact that the involvement of the notaire takes place only once a binding contract has been "exchanged" by which time it has already become difficult to rectify early errors. The reality is that the window of opportunity for doing so in practice remains open only until such time as a deposit is paid down to which must be added the 7 days of "locus poenitentia (reconsideration). It is,therefore, highly advisable for the prospective English purchaser, who has signed or is contemplating "exchanging" contracts to seek appropriate advice at this point in time, so as to ensure that this contract will include such safeguards as are necessary to protect him against a one-sided transaction. Further information on the French conveyancing system and the role of the Notaire can be found elsewhere on this website.