The French Conveyancing Process
French Estate Agents
French Estate Agents are more highly regulated than in England and they are also considerably more expensive. It is essential to check that any Estate Agent through whom you are dealing holds a numbered “carte professionnelle†and also a numbered professional guarantee for client funds backed by insurance.
Ideally your Estate Agent should be a member of the Federation Nationale de l'Immobilier (FNAIM). Anyone who regularly advertises and sells French Property is acting illegally if they do not have a carte professionnelle and a guarantee backed by insurance. Many of the Estate Agents who advertise in England and indeed some Agents operating in France are not properly registered Estate Agents.
The only other person legally allowed to take commission for the regular sale of properties in France is the French Notaire who is also allowed to advertise and sell properties through his office. The French Notaire is such case will take a commission as well as the usual legal fees and duties but the commission will not be as high as that charged by a French Estate Agent.
Surveyors in France
For whatever reason, the French rarely employ the services of a Surveyor prior to purchasing a property.
Furthermore, it is unlikely that any Vendor would consent to a clause in the contract of sale making the purchase conditional upon a satisfactory survey.
However, it is our view that if you have any doubts about the structural integrity of the building you are thinking of purchasing a survey is bound to help. If this is the case you should undertake the survey either before signing the contract or have the survey completed well within the 7 day cooling off period.
There is no equivalent in France to the English qualified Surveyor. The French have Land Surveyors (Geometres) and they have Artisans (Craftsmen) and they have Experts Immobiliers (Experts in building). However, most French people make use of a French Architect when they have questions about the structure of a building.
For most English people who wish to have a property surveyed in a fashion which you are used to and receive a report in English then the best thing to do is to use one of the several UK qualified Surveyors operating either in France or in England who specialise in French surveys.
The French Notaire
All property transactions in France must be carried out through a French Notaire. A French Notaire is responsible for insuring that there is a proper transfer of title. The French Notaire is also responsible for collecting all the taxes and duties due to the French fiscal authorities. So to some extent the French Notaire fulfils the function of a French Civil Servant (Fonctionnaire) as well being expected to look after the interests of the Vendor, and often the interests of the Purchaser as well.
For some time it has now been possible to appoint a Notaire anywhere in the country to deal with your transaction no matter where the property concerned is located, albeit that a Notaire with some local knowledge can be useful. The Notaire is often appointed by the Vendor who will often use the same Notaire through whom they bought the property, albeit that the Notaire's fees and duties are usually payable by the Purchaser.
It is possible to appoint your own Notaire to act solely for you on a purchase and this will not cost you any more because the two Notaires are obliged to share their fees between them. However appointing your own French Notaire can increase delay and misunderstanding. It can also reduce motivation because the Notaire is doing the same work for half the fee. Appointing your own Notaire is only recommended if the transaction involves very large sum of money and complex issues.
French Notaires are highly qualified, highly trained and highly regulated. However, most Notaires do not see it as their job to provide you with ancillary advice and assistance at all prior to signing the contract and only to a limited extent through to completion. Some Notaires speak English to a reasonable standard but the person dealing with your file (the clerc : clerk) will not necessarily have the same level or ability. We work with you and the French Notaire to ensure that there are no misunderstandings and that your needs are met.
French Local Authorities (the Mairie : Town Hall)
A significant difference between the purchase process in France and in England is that in England local authority searches are carried out before the Purchaser signs and releases the contract to the Vendor's Solicitor.
In France a contract for existing property, whether it is a Compromis or a Promesse de Vente, is signed before the equivalent of local authority searches are undertaken, and such enquiries from the local authority are made by the Notaire after the signing of the contract and before completion.
Completion is subject to a suspensive clause in the contract which should, but does not always, properly stipulate that if the results of the Town and Country planning search reveal anything which adversely affects the property then the Purchaser may pull out of the proposed sale.
Provided that funds are paid through the French Notaire then there should be no need undertake a separate search of the mortgages registry prior to completion as the Notaire will do this himself.
As it is not generally possible in France to undertake the equivalent of an English local authority search prior to signing the contract, the best way to protect oneself in this situation is to make enquiries of the Vendor and also to make enquiries of the local Town Hall (Mairie). We would always recommend that Clients make such enquiries whilst on site but if not we can offer this service ourselves.
It is worth knowing however that the local Town Hall is only obliged to respond to your questions in a fairly narrow manner. For example if a chicken farm is situated 200 metres from a property the Town Hall may not necessarily mention this fact to you because they are only required to do so if the chicken farm was situated within a 100 metres of your property.
Therefore it is essential to make detailed on site enquiries prior to sign the contract. Obviously we would recommend that the contract be reviewed to ensure that it meets your requirements.
Buying existing Property in France
When purchasing existing property, the initial contract which you may be asked to sign will generally either be a Compromis de Vente or a Promesse de Vente. One is an agreement by you to purchase under certain conditions and the other is an agreement by the Vendor to sell to you under certain conditions.
In most cases the end result is that you are committed to proceeding with the purchase of a French property subject to certain conditions.
It is important to note that the Notaire's fees and duties are on existing French property over five years old will amount to roughly 7% of the purchase price. The majority of this amount consists of duties levied by the French Government. The actual fees received by the French Notaire amount to about 1%.
Completion will usually take place about 3 or 4 months after the signing of the initial contracts, once the Notaire has carried out the Town and Country Planning searches and made sure that there are no rights of compulsory purchase which could apply.
Depending upon the area in which the property is situated and when it was built, the Vendor will usually, but not always be required to supply at their own expense, the results of the following expert reports obligatory at French Law:
- Termites report ; obligatory if the property is situated in a commune which is deemed by the French authorities to be situated in an area at risk of termites infestation.
- Asbestos ; obligatory if the property was built before 1997. If the property being sold is in co-ownership, such a property usually being an apartment, then an expert report regarding asbestos is also required for the common parts of the building.
- Lead Poisoning ; obligatory if the property was built before 1948 in an area where lead paint was used.
- Natural and Technological Risks ; obligatory
- Energy Efficiency ; obligatory
The following further expert reports are now obligatory in certain circumstances :
Gas installation ; if the property sold has gas central heating
- Electricity installation ; if the electric wiring in the property being sold is over 15 years old.
The recent requirement for similar expert report from Vendors in the UK (the "HIPPS" -home information pack) would seem to have been driven by the EU legislation which in turn was most likely derived from this continental system.
Buying French property off plan
In England there is at present no VAT payable upon new building.
However in France the reverse is true and French VAT is payable upon new buildings and buildings which are under 5 years old when sold. It is levied at 19.6%
The Notaire's fees and duties on a property being purchased off plan are levied with a reduced rate amounting to a total of about 3 % to the purchase price.
French VAT will also be levied on the tax price.
In some circumstances particularly with development on some tourist resorts, the French VAT can be recovered from the French authorities provided that the property is let out under certain conditions. This is usually achieved by way of leaseback but leaseback is not the only way to achieve the recovery of VAT.
If buying off plan you will initially sign a reservation contract (Contrat de Reservation) which is your option to purchase.
You will then at some point later, which is usually within a year, be offered a Deed of Sale which you need to sign within one month failing which you could lose your option to purchase and your deposit. Both the reservation contract and the deed of sale set out the stage payments which you will have to make in accordance with the progress of the building and the construction.
Provided the contracts are properly drafted and contain the appropriate guarantees, the protection afforded to Purchasers of off plan properties in France are very favourable compared to many countries, such as for instance Spain. However the purchase documentation is bulky and complicated and thus professional assistance can be desirable.
Buying land in France to develop
The purchase of land for building a development can be very lucrative but it is essential to check that planning permission can be obtained and furthermore the contractual documentation needs to be in order to obtain the proper protections.
Many misunderstandings arise between foreign Purchasers of French property and French builders simply as a result of a failure to properly communicate and failure to appreciate the difference in the law and practise between England and France.
When buying agricultural land it is important to check any rights which may operate in favour of the SAFER (Societe d'Amenagement Foncier Et Rural) and also to check that farmers rights have not accrued upon the property in question.
Suspensive clauses
A suspensive clause is a clause in the Compromis de Vente, Promesse de Vente or reservation contract making the performance of the contract conditional upon the happening of certain events which must be fulfilled before either party could compel the other to complete.
Such conditions are crucial in any proper contract made in good faith.
We can check that your contract contains the appropriate clauses for your protection and request amendments if we consider the contract is not suitable for you.
Cooling off period
There is in most private purchases of French residential property a right to withdraw within 7 days of the signed Contract being sent to the Purchaser by recorded delivery by a Notaire or estate agent, or handed to the Purchaser by a Notaire (but not an estate agent), together with the required statutory notice at French Law of the right of the purchase to withdraw within 7 days.
The 7 day period starts from the day after you receive the statutory Notice and the notice of withdrawal must be sent by recorded delivery addressed to the person from whom the notice was received, being either the Notaire or the estate agent.
It is important to know that this right is not accorded to property professionals nor to purchasers of land without a building of any sort upon the land.