How to buy a property in France
All property deals in France are handled by a Notaire (Notary) as he/she is the only person permitted by law to perform conveyancing transaction in France. The Notaire has to oversee the legal aspects of the sale as well as the technical condition of the purchased object. The Notaire acts on behalf of the State and is appointed by the Minister of Justice, and the fact that an instrument is drawn up by a Notaire is a guarantee of its legality and authenticity.
The Notaire oversees the transfer of funds that are carried out through his account and ensure that all the taxes and fees are paid in full, including any other additional payments (for example, buyer’s first mortgage and insurance payments). Notaire fees, which are mainly taxes and stamp duty on the real estate transaction, are due and charged in the contract conclusion day. The fees depend on the type of the real estate: under five years old new property accounts for 2-3%; over 5 years and older property accounts for 6 -7 %.
As a rule, all legal subtleties of the property selling and purchasing process takes about 2-2,5 months.
A Sale & Purchase agreement for French property sale -"Compromis de vente"
The first stage of French property purchasing process is to sign and set out the main terms of the agreement between the buyer and the seller (Compromis de vente). Normally the buyer pays a 5-10% deposit on signing the agreement, which is held by the Notaire into its bank account. This deposit is stored on the bank account of the notary until the final completion or annulation of the sale and purchasing deed.
You should note that all financial operations to purchase property in France are non-cash and amounts exceeding 10 000 of euro are subject to control.
Statutory French Property Surveys - DTT “Dossier de Diagnostic Technique“
On signing the agreement, the survey reports (all information relating to the technical condition of the purchasing property) must be provided to the Notaire by the seller for annexation to the sale and purchase agreement and, ultimately, the deed of sale according to the French law. The survey reports include,full details of the property, its surface area and boundaries, including dependences (outbuildings), fixtures and fittings the results of legally required reports:
- checks for lead, asbestos, termites in the property
- electricity and gas safety certificates
- energy performance report
- natural risks statement depending on the object location zone. (for example, flooding) and whether there are any conditions suspensives (conditional clauses) or other statutory disclosures.
A seven day right to agreement annulation– Droit d’annulation «SRU»
Once you have signed the Compromis de vente, the property object is withdrawn from sale and is reserved for the buyer. During this time, “cooling-off period”, the buyer can withdraw the agreement and take back the deposit according to the Droit d’annulation SRU (la Solidarité et le renouvellement urbains). The seller can not withdraw without paying the buyer damages equating to 10% of the property price (if you had sent a deposit, this would also be returned to you). At the end of this period, the buyer is legally bound to purchase the property and can not withdraw without being liable to pay damages equating to 10% of the property price (if you have paid your 10% deposit, your deposit will cover this.) However, the buyer may not be liable to pay these penalties if any of the suspensive clauses outlined in the Compromis de Vente are not met. On signing the Compromis de vente, the Notaire verifies purity of the deal. He checks the each party’s rights to buy or sell the property. He requires buyer and seller full names, contact details, professions, birth and marriage certificates, passport copies, details of ex-husbands and wives to ensure that there are no pre-emptive rights on the property. He also conducts a search in the land registry to see whether there are any third parties with a claim on the property.
Right of pre-emption - Droit de préemption
According to the French law, one of the rights of the Mairie (Town Hall) is the right to stop or pre-empt the sale of a property if the community intends to buy it (in whole or in part) for an intended purpose at the specified price in the Convention de vente.The droit de préemption is a sort of pre-emptive pecking order that allows a public entity to claim a priority over a property that has been placed on the market for sale.
As part of his duty to conduct searches as to legal title, possible rights of way etc, the Notaire will contact the local mairie to check if it intends to exercise its rights of pre-emption. ). If the mairie is interested in buying the property, the buyer will receive the deposit back without any additional compensation. The mairie must reply within two months and if it fails to reply, the sale can proceed on the assumption that it does not wish to exercise its right of pre-emption (as is the case with an estimated 99% of sales).
The Notaire also checks the property location zone to ascertain if there are any risks posed by industry in the area and historical heritage if any.
The buyer needs to plan ahead in order to transfer the balance of the payment to the Notaire’s account in plenty of time for the signing date of the full contract, Acte de Vente. The buyer should decide whether to purchase as a legal entity or an individual and solve all the inheritance and ownership issues.
It is necessary to know that to purchase a property for primary residence implies taxes on activities on the territory of France.
Deed of Sale- Acte de Vente
Once the deed of sale (Acte de vente) is signed, the transfer of ownership is carried out. The seller must give the keys to the buyer. The Notaire’s office will organise the bank transfer to the seller’s account and the estate agency fee.
The Notaire registers the deed of sale at the mortgage office of the Conservation des Hypothèques. The authentic copy of the deed of sale, signed by the notary and stamped by the tax authorities, after 3-4 months will be finally returned to the buyer: it will be the deed of property, officially.
It can take quite a long time for you to receive this title deed (Titre de propriété). Usually, it takes between two and three months to receive this document. In order for you to complete the necessary administrative processes, following your purchase, the Notaire will provide several certificates. The certificate can be presented to any of the public utility services to get a connection e.g. electricity, gas as well as to get the insurance on the property.
Our company, PropertyServiceAzur, provides assistance in obtaining mortgage at a rate of 1.8%-2% per year + Euribor and makes a change of contracts for utilities. Upon the request of the client, it is possible to manage the purchased property.
Meanwhile, your Notaire, who plays an important role in the entire acquisition process, continues his work as an ant, the most important of which is When you have signed the deed of sale, you should ask the Notaire for a certificate of purchase (called attestation), which you can use to gain access to public services for the property, and open a bank account etc. if you have not already done so accordingly.