Factfile - Things you should note before buying a property
Agents & Viewing
In France, estate agents must hold a carte professionelle, which you can ask to see. French agents give out much less information about a property than their UK counterparts – for example, they’re unlikely to give out a property’s address. They will also accompany you on viewings.
Once an offer on a property has been accepted, both buyer and seller sign a compromis de vente, a legally binding contract stating the names and addresses of buyer and seller, the address of the property for sale, the agreed price and so on. Conditional clauses can also be included – for example, that the sale is dependent on planning permission being granted. It is essential that you understand everything that has been included in the compromis and any other contracts – if necessary, employ the services of a translator. (Other initial contracts include the promesse de vente and promesse d’achat, i.e. promise to sell or buy.)
Cooling Off Period
A seven-day period then follows, during which time the buyer can pull out for any reason without penalty or losing their deposit.
A deposit is paid (usually 10%), which is forfeited if the buyer pulls out after the cooling-off period (technically, they could be pursued for the full sale price). The deposit can be paid to the notaire or into the agent’s escrow account (never directly to the vendor).
The conveyancing process is then carried out by a notaire. This normally takes around three months and is followed by the signing (by buyer and seller) of the acte de vente (deed of sale), usually in the notaire’s office. If the buyer can’t attend, they can appoint power of attorney to someone else to sign on their behalf. Ideally, you should view the property on the day of completion as it is sold as seen. The notaire gives the new owner an attestation de vente; final ownership papers are posted around six months later.
The balance of payment is made to the notaire at completion. Agency and notaire fees are also paid at this stage.
Buying fees in France are high compared to the UK (agency and notaire’s fees usually amount to around 10-15% of the sale price). Agency fees are normally paid by the purchaser. In adverts, frais inclus means fees are included, net vendeur means they’re not. Agents are free to set their own rates, but they are generally between 5-10%. Always check from the outset who is liable for the fees and how much they are.
In France, a notaire must be used when a property or land is sold. Buyer and seller can share a notaire or appoint one each (in which case the notaires share the fees). Notaires’ fees are on a sliding scale of 6-8% (depending on the value of the property). In many ways a notaire is like a British lawyer, but they are employed by the French government to ensure a sale is above board and that all taxes are paid. It is often advisable to seek additional legal advice from a lawyer specialised in both UK and French law.
You can use a British or French mortgage, in sterling or euros (or other currency). A mortgage broker experienced in overseas sales can advise you. It’s best to get a mortgage agreed in principle before you start viewing. If you will need a mortgage, this will be a condition of the compromis de vente, meaning that if you fail to obtain one, the contract is void with no penalty to you. Once a mortgage offer is confirmed, the notaire is informed and the sales contract becomes binding.
You can shop around for currency deals just as you can for mortgages. You may want to consider a ‘forward contract’ whereby you purchase currency at a set rate.
Your property must be insured in your name from the moment you become the owner. You can simply take over the previous owner’s insurance, but it is probably best to take out insurance tailored to your own needs, for example, taking into account if the property is a holiday home and left unoccupied for periods of time. One of the notaire’s responsibilities at completion is to check that the property is insured.
Surveys are not commonplace in France, however, you can arrange one with a British surveyor working across the Channel or a builder or architect. Bear in mind that you will need to organise this before the initial contract becomes binding, or will need to insert a conditional clause stating that the sale is dependent on a successful survey. Vendors in France are required to provide a series of diagnostiques or reports on lead, asbestos,flood zones, termites, natural risk, gas and energy efficiency.
When you buy a new property in France, you sign a contrat de reservation at the outset, and then make stage payments for the property. Buying costs are lower; the deposit is 5% and notaire’s fees are around 3% plus there is a two-year exemption from taxe fonciere. New properties come with a 10-year guarantee.
These are similar to UK rates, but they are split into taxe d’habitation and taxe fonciere, and are usually (but not always) less than their UK equivalent. You can check these taxes with the agent when you view properties.
This is one area where many buyers seek legal advice prior to buying a French property, as France has a forced succession system, unlike the UK. This means you cannot leave your property to whoever you wish, and you cannot disinherit your children, whether legitimate or not, or from a current or previous marriage. There are various ways of managing this system, such as using a tontine clause, the communaute universelle marriage agreement or buying via a property holding company (SCUsociete civile immobilier), all of which require legal advice.