French Property Law
Promesse de vente - (French Property Sale contract)
French Property Law: Expert Advisors
Classically, a French property purchase will require the following: a Notaire (French property lawyer), a French Property Estate Agent and a Financial Advisor. If completing the French property purchase outside France, the compromis de vente / acte de vente must be notarised as the French Consulate.
Notaire
Notaires (French property lawyers) ensure the registration of the French property purchase at the French Land Registry. They are responsible for the collation and disbursement of French property purchase transfer taxes and all necessary contractual (compromis de vente and acte de vente) checks. As this is their principal role, not to the client as such, they may act for both parties on a French property purchase / sale.
It is important to choose the correct Notaire. It is fair to say that not all have developed a French property ‘service’ given that they are assured of a percentage of the French property transfer. However, with the increase of foreign investors in French Property, Notaires are beginning to develop a French property service. Purchasers may begin to request an English service with trained staff who understand the French property purchase process from an Anglo-Saxon point of view. This is very important with respect to their needs and French property inheritance law.
A good Notaire can change the whole dynamic of the French property purchase, they are undoubtedly in the strongest position to comment on French property law and inheritance planning. They also must have a significant professional insurance scheme for French property purchases / sales. Notaire's may expect to charge for a developed English service, the value of this should be offset against alternatively sourcing a language or legal intermediary.
French Property Estate Agents
French property estate agents are commission based. Consequently their interest is to see the French property purchase / sale complete. They can act as a driving force to put pressure on other advisors to complete the French property purchase / sale rapidly. French property estate agents have a more developed sense of service; speaking English, liaising rapidly with other parties.
French property estate agents can draw up a compromis de vente / promesse de vente. They are legally regulated to provide a minimum standard. The offer stage often takes place between the owner of the French property and the purchaser, via French property estate agent (if applicable). Although, Notaires are usually not directly involved at this stage, it may be advised that the more prudent French property purchaser instructs a Notaire to examine the compromis de vente / promesse de vente before committing or within the seven-day cooling off period.
French property estate agents are free to set their own fees in France, however most agents implement a self-imposed tariff (in which the fee is usually a percentage of the price). Depending on the way the transaction is structured, the French property estate agent's fee may be included in the price or stated separately. Economically, the end result for the purchaser is identical in both cases. However there are legal differences between the two methods. A saving on French property transfer tax can be made if the price excludes the commission. Conversely, if the purchase is to be financed by a bank, the latter solution can be less favourable to the purchaser since the price will appear lower for the bank's purposes and the bank may refuse to finance the French property estate agent's fee. These options should therefore be considered very carefully as they involve more than merely saving tax.
Financial Advisor
French banks should not be overlooked as a communication tool in the French property purchase. Most major French banks have a multi-lingual international department.
French Banks keep in close contact with the French property lawyer to ensure that the contract is drafted suitably, the security is registered appropriately and the French mortgage set up. The Purchaser is protected as the contract will be subject to the purchaser gaining a loan in accordance with the specific criteria laid out in the compromis de vente / promesse de vente (interest rate, duration, etc.)
It is worth noting that part of the risk analysis for French Banks often comprises medical examinations and completion of extensive questionnaires. These are usually completed between the preliminary and final contract.
French Consulate
The French Consulate will witness signatures and are accepted by Notaires. This will usually incur a small cost and it is carried out by appointment requiring the necessary proof of identity.
- Click here for details and contact of the services of the French Consulate
- Click here for a list of French Consulates