Legal Formalities for Property Purchase in France
The system for purchasing property in France, governed by the Napoleonic code, is clear, simple and protects both the buyer and the seller. Once you have found the property which is going to become your new home in the sun and you have negotiated the price, you pass immediately to the signature of a 'compromis' or 'promesse de vente/achat'.
This agreement can contain conditions which you, as purchaser, require to be fulfilled before the purchase becomes irrevocable. These conditions may involve a loan for purchase, clarification on limits, planning permission, state of the property etc. plus the requisite searchs undertaken by your notary to establish title. The conditions will be very clearly set out in the agreement. Following the signature of the compromis you will receive a signed copy and from reception you have 7 days to withdraw from the deal.
When these conditions have been fulfilled to your satisfaction, buying the property then becomes irrevocable. The seller is bound by this agreement and cannot sell to someone else or get out of the sale without heavy financial loss, which can be up to the value of the property.
At the same time, should the purchaser try to get out of the deal at this stage, he or she will lose, at the least, the deposit which represents 10% of the purchase price which will have been paid to the notary when the agreement was signed.
It is a fair and safe system that safeguards the purchaser against gazumping of any kind. The period of time between the signature of the agreement and the final act of purchase is normally between 2 and 3 months and is agreed by both parties. It takes the notary this amount of time to complete his searches.
You become owner in the practical sense on the signature of the final 'Acte Authentique' and when you have paid the remainder of the price.
The notary in France is not the same as at home in the sense that he is a legal representative who has to verify the title and any liens on the property of whatever sort. Thus he is responsible if, in the future, there is some dispute concerning the property and its legal status. Hence, in France, it is normal for one notary to represent both the buyer and the seller.
Nevertheless, should you particularly wish to have your own notary, there is nothing to prevent you from doing so: the two notaries will then split their fee between them. This fee (about 1% in total) is included in the legal costs of about 6.5% of the price (varying on value) which also include State taxes. The purchaser is responsible for these legal fees while the seller normally takes the agency fees at his responsiblity which also come to about 6% but which are included in the sale price.
Do contact us to clarify any questions which arise out of this brief introduction to French legal procedures for purchasing property. It is a much less complicated system than those operating in many other countries and once understood, should present no cause for anxiety.