The laws relevant to the purchase of a property, depend to some extent on the type of property you buy. For example, a vineyard or farm will be subject to different procedures and costs.
On the assumption that you are buying a house with 1 hectare (2.47 acres) of land or less then the procedure is as set out below.
Should the house have more than 1 ha. the procedure is basically the same except that there might be intervention by The Société d'Amenagément Foncier et d'Establissement Rural (SAFER) which has an automatic right of pre-emption in order to preserve land which it feels should either continue or remain in agricultural use. It rarely exercises this right , but the Notaire (roughly the equivalent of a Solicitor/Lawyer) is under an obligation to notify the SAFER to give it the opportunity to object to the sale. Should it do so, then any agreement is null and void and you can recover the deposit paid on 'exchange'.
Initial Agreement
An agreement is negotiated between buyer and seller and the initial contract which is called a Compromis de Vente is then signed by both parties. This is normally drawn up by a French Estate Agent, but if there is no agent involved is prepared by the Notaire. There is a cooling off period of 7 days after signing by both parties during which time the buyer can back out without penalty. Once this cooling off period is over the Compromis de Vente becomes a legal document, binding on both parties and should not be taken lightly. At this stage the buyer pays a deposit of a minimum of 10% of the purchase price which remains `blocked' in a special account at the Notaire’s or the Agent’s office until such time as completion takes place or the purchase is aborted. At this stage the property is taken off the market.
There are other kinds of less familiar contract such as the Promesse de Vente where the contract is not binding on both parties to the same extent as the Compromis. By signing it the vendors still commit themselves to selling the property to the purchasers, but this commitment takes the form of promising not to sell it to anyone else within a stated period, usually 3 months. A deposit of between 5% and 10% is again paid and again the purchaser will usually forfeit the deposit if they do not go ahead.
There exist other forms of preliminary contract such as the offre de vente, offre d'achat and an exchange de lettres - none of which are recommended in preference to the Compromis or the Promesse.
Surveys of the condition of the property you intend to purchase by professional surveyors or 'experts' are unusual in France. It is more usual to request local artisans to give an opinion as to the condition of say the roof, or the walls and for them to give quotations for the work. French buyers would be more likely to approach an architect or 'expert' but even then it is unusual for them to be asked to prepare a detailed report as has become `de rigeur' in certain European countries. It is certainly prudent to carry all this investigative work before signing the Compromis as once this agreement has been reached - as mentioned above - it is binding on both parties. Once the Compromis has been signed there follows a period of generally 6 - 8 weeks in which the searches are carried out to ensure that the property is not subject to any imminent environmental changes and during which time the purchaser will be required to resolve the financing of the purchase. These searches and the other contractual matters are carried out by the Notaire. The Notaire is unlike most European Solicitors/Lawyers as he is not appointed to act for either party in the transaction but as a public official whose duty is to the State. Their function is to ensure that the transaction is carried out legally and accurately and in accordance with the proper processes and to give the transaction absolute validity that cannot be contested. Accordingly, it is unnecessary to appoint a second Notaire to act for yourselves, although you may feel more `comfortable' having your own Notaire or perhaps European Lawyer to explain some of the points that arise which may be unclear as it unusual for Notaires to volunteer advice.
If the buyer intends to take out a mortgage then it is necessary for this to be declared at the time of the agreement and a substantive clause in the Compromis protects the purchaser's interests in the event that a loan is not made available. In this event, the sale does not proceed and the deposit is returned. In the event of the discovery of a `planned nuisance' through the searches, the buyer can withdraw and the deposit is returned. Should, however, the buyer break the contract, the deposit is paid to the vendor as an indemnity - conversely, should the vendor break the contract, the deposit is returned to the purchaser.
Final Contract
At the end of this period, which can be extended at the agreement of both parties, the final contract, the Acte de Vente or Acte Authentique is signed at the Notaire's office and the property passes to the buyer, who must pay the balance of the purchase price to the Notaire who then pays the vendor. It should be noted that the balance must be in the Notaire's possession before the contract is signed. It will also be necessary to provide to the Notaire before completion a copy of your birth certificate translated into French and, if applicable, a copy of a Marriage Certificate also in French.
Early advice should be sought in order to understand fully the complexities of French succession law which does not allow you to leave your share of the property to whom you wish - even if you have an existing Will. There are ways of circumnavigating these laws but if you wish to leave this French property to your heirs, the cats' home or Great Aunt Puddleduck, then it will be necessary for you to take action before the purchase is completed.
From the signing of the Contract the purchaser is responsible for the insurance of all the buildings on the property which is a requirement under French law.
Fees and Commission
The buyer pays the legal fees and registration taxes which amount to approximately 7.5% of the purchase price, including any geometrist's costs that might have been incurred such as establishing boundaries, repositioning boundaries and preparing plans for the Acte de Vente. These fees are paid to the Notaire on the day of signature of the Acte de Vente and are paid as an 'all encompassing' sum together with the balance of the purchase price.
Please note that if you are purchasing a property using a mortgage from a French bank there is an extra charge for registering the loan with the central, government run, register. The notaire's charges for this all go to the government.
The Agency's commission is normally included in the price of the house as shown on the agents particulars. This indicated by the letters FAI after the price and stand for Frais d’Agence Inclus. These are also shown on the Compromis de Vente and paid to the agent on completion of the sale and production of the agent’s invoice.
