- THE PRELIMINARY CONTRACT (Promesse or Compromis de vente)
One of the singularities of the French system is having a preliminary contract signed at the start of the process which may either be drawn up by an estate agent or by a Notaire. This contract can be called a “Promesse de vente” or a “Compromis de vente”.
When the contract is ready, the Notaire or estate agent invites sellers and buyers to a meeting to sign it. You will then be asked to transfer a deposit usually amounting to 5% of the purchase price. Bear in mind that although you are only required to transfer 5%, you are legally bound to a payment of 10% if you withdraw without a good reason.
Once the contract is signed, you will have a 10-day cooling-off period during which you will be able to withdraw from the purchase without losing your deposit.
- OBTAINING THE BANK LOAN / MORTGAGE
As soon as the cooling-off period has expired, as a buyer, you are legally bound to the purchase. However, if through no fault of your own, any of the “suspensive conditions” of the contract are not fulfilled by the date specified in the contract, you will be released from the contract and will be able to recover your deposit. If the purchase is subject to a loan / mortgage being granted, the usual timeframe is 2 months from the preliminary contract.
If the loan / mortgage is not granted, the buyer can exit the preliminary contract without losing the deposit. Be careful to stick to the terms of the loan agreed in the preliminary contract to avoid potentially losing the deposit.
Usually, completion takes place 3 months after signature of the preliminary contract, once all the “suspensive conditions” have been lifted.
Before the completion, as a buyer, you are requested to transfer the balance of the purchase price, taxes and fees to the Notaire’s office account. Please note that in France the buyer pays all the transfer fees, which include stamp duty (about 7%) and the Notaire’s fees (about 1%) of the purchase price.
Completion will then take place in the Notaire’s office by signature of the final Transfer Deed (“Acte de Vente”). As for the preliminary contract meeting, the parties can attend in person, via videoconference or sign a power of attorney.
The price will be paid through the Notaire’s office account and the keys will be handed to the buyer during the meeting or given to the estate agent if the parties are not present.
The Notaire will later carry out the registration of the transfer, together with all the legal formalities.
- THE NOTAIRE’S ROLE
The Notaire is a public officer who has to ensure that the legal process is correctly followed, to register transfers and collect taxes. His/her main duty is to authenticate contracts. S/he has to give advice to each party, equitably, if needed. Nowadays, it is very common for both parties to have their own Notaire.
The Notaire’s fees are fixed and regulated by the law and cannot be negotiated. French law guarantees that the costs remain the same for all clients. (In case where several Notaires are involved, they split the costs between them).
If you would like to buy a property or if you need more information about conveyancing, we invite you to contact us at: firstname.lastname@example.org. Our team of bilingual specialist lawyers assist our international clients in their personal and professional matters including the purchase and sale of properties.