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LEGAL DOCUMENTATION - CONTRACTS

Notaire:

The Notaire is a public officer, titled by the state to prepare and execute contracts. They serve to advise with regards to legal status. They earn their fees through a set scale of administrative charges pertaining to the contracts that they execute. They are responsible for all searches performed on the property before completion and are accountable to the authorities for payment of registration fees, and capital gains liability that may be incurred through the transactions. The purchaser is guaranteed clear title of ownership. 

Cadastre:

An administrative document itemising details pertaining to the value, position, position and usage of land. It is used to establish the rates payable. Each commune is responsible for establishing and updating the plan cadastre which is a summary table and map detailing the matrices.

Compromis de Vente

Below is a synopsis of a formula similar to that which we often use.
Contracts do vary and one should verify carefully the contents of every contract before signing. The details below are intended to give a better understanding of the process and do not reflect an actual contract. 

The contract sets out the details of the sale, starting with the  identity of the seller including marital status, place and date, birth details and passport numbers.

The equivalent details are then given for the purchaser.

The details of the property are then laid out giving a basic description and the cadastral references listing each parcel of land, its surface area and its designation. This is usually accompanied by a "plan cadastre" which maps out the boundaries of each parcel.  

Surveys must be conducted prior to the signature of the initial contract  for the following issues:

  • lead (in paint). The levels of lead in the paint and the condition of the paint are listed for element in the house. This is to ensure that children are not exposed to deteriorating paint with lead content as they can peel it off and eat it. The report should be given to any artisans who subsequently  work on the paintwork in order that they may take suitable precautions.

  • termites. Numerous departments in France are considered at risk from Termite activity and within these areas a termite certificate needs to be produces for each sale. If there has been a termite infestation buyers should investigate the level of damage done before proceeding with the sale. Termites have been in France for hundreds of years. Infestation can range from a being only a minor issue to being a critical issue threatening the entire structure of the home. 

  • asbestos. Should asbestos cladding is found one should look into the costs of removal and negotiate this with the sellers. Corrugated compressed concrete roofing has been used extensively on agricultural buildings in France and this form is not considered to be a major health risk.  One is obliged to indicate its presence to any artisans working on the material.

  • Heat efficency. This is a new survey which will indicate the calorific efficiency of each house sold and recommend areas where they can be improved. 

  • There is new legislation for further searches to be done to control both electricity and gas installations.

 

A report is also required outlining the  risk areas within which the property is situated.  This covers areas at risk  of flooding, seismic activity, tornados, avalanche, landslides, etc. The categorisation is very broad however and one needs to make further enquiries once one has seen this report in order to establish whether independent houses are at risk.

The contract will usually contain the following clauses:

"Origine de Propriete"

This clause gives  details of the previous sale through which the sellers became proprietors.  

"Propriete - Jouissance"

A clause stating that the purchaser takes ownership and full possession on the day of the act.

"Charges and Conditions"

The purchaser buys the property "as is", ie in its current condition. The onus is on the purchaser to have visited the property and verified its condition. (Ironically it is less common in France to conduct surveys, although this practice is now on the increase.)

The purchaser accepts existing rights of way. These remain with the property after transfer of ownership.  They will be mentioned in the document. (Should there be any new rights of way created by the existing owner these are subject to a later conditional clause.)

The purchaser takes responsibility for all taxes, contributions and charges, and assumes responsibility for the insurance cover, as from the day of transfer. 

Lutte contre le saturnisme

The seller declares that to their knowledge there is no risk nor history of poisoning  from lead in the area or of any other poisonous material.

Prix

The agreed price is declared, and the purchaser agrees to pay this sum on the day of the act of sale. 

Negotiation

The intervention of the Agency involved in the negotiation is specified and the amount of the commission.

Objet - Plan de Financement

Details pertaining to the financing of the sale and the mortgage should one be required. 

Conditions Suspensive

These take numerous forms but some of the more common are listed below. Should a clause not be met the purchaser has the right to retract from the sale and their deposit is refunded.

a) In the interest of the purchaser

  • Obention of a loan

  •  This is a common inclusion, every purchaser being entitled by law to apply for a loan, which if not granted allows the purchaser to withdraw from the sale without loss of their deposit. 

  • Certificate of Urbanisme

  •  ensuring that the property is zoned for habitation, that there are no rights of way that will impact on the usage of the property, that there are no projects in development that will impact on the usage of the property.

  • Safer

  •  This is a french statutory body who has the right to pre-empt any sale with more than 2 500 m² of land in order - to help the settlement of new farmers, or to facilitate substantial development projects and environmental preservation. This is usually  a  formality.

  • Etat Parisitaire

  • We recommend always including this clause due to the increasing presence of termites. In many departments it has already become compulsory.  The survey covers termites, wood worm, Capricorn beetle and rot.

  • Servitudes - Hypotheques

  •  This clause refers to the notaires duty to examine the title deeds in order to establish: 1) that the revenue generated from the sale is sufficient to clear all debts registered against the property. 2) that there have been no rights of way created by the seller which will impact on the usage of the property and which are not described in the current document. The discovery of a problem gives the purchaser the right to retract from the sale. 

b) In the interest of the seller

  • That the purchaser pays the total purchase price due including the fees due to the notaire and the purchase taxes.

Once this payment has been made and both parties have signed the act, the property becomes the possession of the purchaser.

Reiteration

This clause stipulates that the sale must be completed

  • by an registered notarial act with the notaire(s) stipulated in the contract,

  • prior to the final date set for completion.

Should the terms not be met, the clauses which relate to the ceding of the deposit will take effect.  

Depot de Garantie - Clause Penale

a) On realisation of the sale, the deposit will be deducted from the total sum due.

b) Should any of the suspensive clauses not be met, the deposit will immediately be refunded to the purchaser.

c) Should the suspensive clauses all be met and should the act not transpire due to the fault of the purchaser, the deposit will be paid to the seller, the sale declared null and void and each party are free to go their own way. 

If one party or the other default they are given 15 days to rectify the situation. If the seller refuses to sign, for whatever reason, he must pay an amount equivalent to that of the deposit by the end of the month which follows the due date. The purchaser may pursue the sale regardless in court, but once he cashes the penalty the sum is declared null and void.

Election de Domicile

The address used for all legal documetation. This is usually the physical address of the notaires office.

Situation Hypothequaire

The seller ensures that there is no mortgage on the property, should this be the case.

Declarations Fiscales

The seller declares his residence for fiscal purposes

Assurances

The purchaser may take an optional insurance to cover a portion of the sale price in the event of their death prior to signature, and nominate the beneficiary.

Both parties vouch for the fact that the price declared is the true price. (The sale price should never be under declared. The temptation to save a relatively small sum in fees is counterbalanced by stringent penalties for breaking the law, the likelihood of incurring higher capital gains taxes down the line, limitations in raising finance and risks of losing the sum paid outright without acquiring the property.)

The name of the notaire is reiterated, and the parties agree that the sale can go ahead under the conditions and the price stipulated. In the case of a dispute a legal tribunal will decide.

The purchaser has the right to withdraw from the contract for a period of 7 days after acknowledging receipt of a copy of the contract.

Note : All information on these pages are set out and intended as a guideline only and should be verified with a  notaire,  advocate or lawyer should you wish to take any firm advice relating to any legal matter

 

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