Buying Guides - French Property Buying Guide (June 2007)

Buying property is strictly regulated in France, so ensure you use professionals who are fully registered in the French system.

The first step is to decide what and where you want to buy, and how much you can afford to spend (or how much a bank is willing to lend you for a mortgage). Deciding ‘what and where’ is easier if you have visited the country and established the purpose of the property you intend to buy: i.e. holiday home, primary residence, investment property or some other function.

The people

There are English-speaking estate agents (agents immobiliers) throughout France. They earn commission from the sale of the property and will try to obtain the best possible price for the vendor, but also know (typically) what price the vendor will accept. They should be able to give you an estimation of fees and other charges related to the property purchase. Estate agents  must be properly registered in the French system and carry an appropriate ‘professional card’ (carte professionnelle).

Property searchers find property based on your criteria (price, location and so on). Some charge a fee, while others take a percentage commission from the estate agent instead.

The notaire is a public official, given the title of Maître, whose job is to legalise property transactions. Notaires are responsible for the conveyance, preparing the various documents and confirming the seller's title to the property. They have indemnity assurance, which provides a financial  guarantee to the client. The purchaser is free to choose their own notaire or to use the same one as the vendor.

A mortgage broker must have professional indemnity insurance and be registered with each bank and mortgage provider they represent. A good broker will liaise directly with the lender on your behalf. They receive their commission from the bank or lender. It can be difficult to raise mortgage finance on wooden buildings, stone cabanons, derelict barns and properties with agricultural land. Some lenders won’t accept properties that have been registered for commercial use such as gîtes and chambres d'hôtes.

A pre-sale structural inspection by a surveyor is not obligatory, but is advisable when buying an older property or one for renovation purposes.You will need the advice of an expert –
an architect or surveyor – if you are relying on mortgage finance for renovation works. Works must be completed by tradesmen registered in France, with the correct insurance current – it is an essential guarantee for the bank or lender.

Whether you are buying for cash or with a mortgage there are costs you will need to fund. The deposit, usually 10% of the purchase price for older properties (less for new properties under construction or buildings under five years old), is paid at the point of signing the agreement to purchase (compromis de vente), or sometimes after the seven-day cooling-off period (in which you may withdraw from the agreement with the deposit returned in full).

It should be paid to the notaire or agent representing you (as long as they have the appropriate insurance), never to the vendor. The deposit is held until completion.

Legal fees for an existing property are generally 8% of the purchase price and roughly 4% for a new-build property. Legal fees include the notaire’s fees and the land/property registration fee (which varies from region to region). Agency fees are typically 5-10%; there is no fixed rule as to whether the vendor or buyer pays this.

Making the purchase

Once the vendor has accepted your offer, you will be required to sign the compromis de vente (sometimes called the promesse de vente). Legal advisors, notaires or estate agents may draft the compromis, which will be written in French, but may have an English translation. It is a legally binding agreement between the buyer and the seller, so check all the details and conditions are correct. The compromis can contain let-out clauses (conditions/clauses suspensives) and details the penalties incurred by either buyer or seller if completion doesn't take place.

If you are buying a new property ‘off plan’ the agreement may be in the form of a contrat de réservation or contrat préliminaire which will provide details of the property to be constructed and a timetable for completion. There is no equivalent to the fixtures and fittings questionnaire used in the UK so, before signing and paying your deposit, make certain that all the items you think are included in the sale are actually included.

The agreement must include an accurate description of the property being sold and you  may wish to agree an inventory of small items with the seller. Once the completion date has been established make sure your French bank account is open and that the funds will be there.

Building insurance must be in place at completion. The acte de vente (final deed of sale) contains much of the same information as in the original compromis, but check it carefully. Your notaire should send you a draft a few weeks before completion, but you may need to specifically request this. It will also state the date on which you can move into the property.

At completion, the acte de vente is signed by both buyer and seller, and witnessed by one notaire (either that of the buyer or seller). The notaire pays all the taxes, settles the accounts of the purchase/sale, and registers the deeds and mortgage. A few months later you will receive a certificate informing you that the title has been registered. The original title deed is kept by the notaire, although you may request certified copies.

Property taxes

There are two taxes on all residential property. These are collected by the State for the local authorities. They are assessed at individual rates according to location and can vary substantially. Taxe fonciére (owner's land tax) is paid by the person who owns the property on the first day of January. Payment is due annually in October or November although monthly payment can be arranged. Taxe d'habitation (occupant's tax) is only due on habitable buildings and is paid by the occupant of the property on the first day of January. If the house is furnished and supplied with water and electricity then this tax must be paid, even if the property is only used for occasional visits.

www.angloinfo.com - Hundreds of pages of online information designed to help English-speaking people in France.

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