Buying a home in France is usually the beginning of an exciting new chapter in an expat's life. However, property transactions in France differ significantly from those in the UK. If you are about to invest in the French property market, it's a good idea to be ready, as being prepared will get your new life in France off to the best possible start.
There are a few legal and administrative issues to negotiate before you can take possession of the idyllic French property of your dreams, so it's important to leave nothing to chance.
The contracts involved in the house buying process
In France you will be expected to sign two main documents during the property buying process. The contract to buy is referred to as either the 'Promesse de vente' or 'Compromis de vente'. The second document transfers the property to you and incorporates all the terms of the contract - this is called the 'Acte Authentique'. You should expect to sign the initial contract fairly early in the process, as finance and searches are arranged after an agreement to buy has been reached.
Because you are committing to the purchase before the various legal and financial checks have taken place, it is imperative that you incorporate conditions in the contract that protect your interests as the buyer. These conditions are referred to as 'clauses suspensives' in France, and they must be satisfied if the contract is to ultimately become an enforceable legal document.
Preparing the contract
There is a minimum amount of information that is required in any contract to buy a home in France, and this will be compiled by your notaire. The type of information included in every contract includes a detailed description of the property, the legal dimensions of the home, any land associated with it and details on legal ownership. The notaire will also ensure that details of the sale price, finance arrangements and time limit for completion are included in the contract.
You should ask to see a copy of the seller's title deed, information on property taxes and some utility bills for the house before agreeing to sign the initial contract. If you're buying a flat, it's also a good idea to request a copy of the last residents' meeting minutes.
Before you sign a contract, you and your notaire should make some enquiries as to the structural integrity of the building. You may also want to identify where home improvements are required in advance, or where extensions to the home may be desirable. If you identify any restrictions to such plans, the value of the property may need to be re-evaluated. However, you can insist that certain issues must be addressed before the completion of the sale - by inserting a 'clause suspensive' for each one. For instance, you may want to stipulate that a sale is dependent on planning permission - known as a 'Certificat d'Urbanisme Positif' in France - being obtained before the property changes hands.
You have 6 weeks to get a loan approbation by a bank in France. Please contact your BNP Paribas adviser as soon as your real estate offer has been accepted. If your loan approbation is negative, you will be able to get your deposit back. If you want, your BNP Paribas mortgage adviser can directly contact your notary to keep him updated about the progress of your application. BNP Paribas will also help you understand all the processes in place, as well as the timing to respect, for you to take your decision in time.
Negotiating the contract
While there are several reasons why you may feel the need to insert a 'clause suspensive' into your house buying contract, the vendor or their notaire must agree to such a condition first. Remember; it is highly unlikely that a French property owner will agree to a clause that stipulates a foreign property must be sold first in order to raise the capital required for a property purchase in France. Your notaire will explain which 'clause suspensives' are required in your contract.
It is possible that the clauses you have inserted into your contract take longer to satisfy than the agreed time limit allows. If this is the case, it is possible to ask your notaire to negotiate an extension, thus pushing completion to a later date. However, the seller will have the final say on whether or not an agreement can be granted. If any of the clauses haven't been met by the seller, there is recourse to delay or even cancel the purchase.
Once you put pen to paper, you will be required to put down a deposit of between five and ten percent.
While most contracts are drawn up by notaires in France, this job is sometimes completed by an estate agent. However, if this is your first foray into the French property market, it's prudent to have your notaire draw up the contract. Notaires have experience and in-depth knowledge of the legal framework that governs the transfer of property, and they can explain each step of the process along the way. A notaire will never prepare a contract for you to sign without first seeing an original copy of the title deed and verifying legal ownership of the property in question.
If you're buying through an agent, there is a chance that you will be presented with a contract to sign almost immediately as they have standard contracts available. However, it's always best to seek expert legal advice before committing to a purchase. Having your notaire draw up a contract with your best interests in mind will allow you to insert the 'clauses suspensive' that protect your investment.
If you want to secure a property, but you aren't in full possession of all the facts about it, you may be asked to sign an 'offer to buy' agreement - known in France as an 'Offre d'achat'. This is a legally binding document, however, so you'll need to be almost certain that you've found the property you're going to buy. You will probably be asked to pay the deposit at this stage, but it's always prudent to seek expert legal advice from a notaire before doing so.
Unlike buying property in the UK and many other EU markets, buying a home in France means committing to a purchase legally at a very early stage in the process. It also involves the payment of a deposit from the moment you agree to buy. This puts the onus on you and your notaire to do your research as quickly as possible. However, the French property market is one of the most secure and stable in the world.
Provided you take expert advice throughout the house buying process, you can look forward to a wonderful new life in the home of your dreams.