IF you have found a property that fits the bill the next few steps are vitally important.
Agreeing a purchase price will be your first move and don’t go down the path of dodging tax by under-declaring the figure.
Although the French love nothing more than a bit of tax evasion if the authorities find out you face a hefty fine and even a prison term.
But also make sure the price agreed is the price that appears on the contract, more on this later.
Be sure that the price you are paying is the current market value and be clear exactly what you are getting for your money, are fixtures and fittings included?
Also does the price include the estate agent’s commission, if it does then push them to see if they will cut their rate to ensure the sale goes through?
Once you are happy with the price for your property then the initial contract, the Compromis de Vente, is drawn up.
The estate agent or the notaire can prepare this, but the estate agent’s version must satisfy the notaire’s requirements.
By this point you should have appointed the services of an English-speaking lawyer with experience of the French property process.
It is important, as there are many different terms and rules that have to be adhered to, and if you don’t have the experience problems may arise.
It is also at this point that the purchaser must pay a deposit of approximately 10 per cent of the purchase price. On new build property it can be 5%.
The amount can be negotiated and often the vendor will agree to a time delay if the deposit is coming from abroad.
The payment is usually made to the notaire, occasionally the estate agent who must be bonded, via bank-to-bank transfer.
The deposit will only be refunded if strict conditions are met, so if you do withdraw you will lose the money.
Make sure you know the exact terms of the return or forfeiture of your deposit.
Also it will be possible to get an idea of the fees and other costs involved with the purchase.
This will give you an idea of the amount you will need to transfer between bank accounts upon completion of the sale.
The Compromis de Vente must contain standard items, which include:
The price agreed which must be declared as the true market value for the property, giving the tax authorities a figure to check if required.
As well as details of purchaser and seller, a receipt for any deposit paid and a possible date for completion.
It is also at this point that clauses suspensives can be agreed upon, which aim to protect both sides should problems arise.
These clauses can include the completion of building work, the approval of planning permissions or a mortgage.
The agreement should also give you an idea of a possible completion date, but this is very flexible as the notaire will have to undertake searches on the property, which may take some time.
As you can see the range of detail and information the Compromis de Vente contains can be wide ranging, which is why using a lawyer may save you much heartache.
A very useful feature of the French purchase process is the seven-day cooling off period.
The time runs from when you receive your signed copy of the Compromis and allows you to back out from the sale without penalty.
Once the seven days are over, the rest of the sale will take approximately three months to complete, this will culminate in the Acte de Vente.
It’s worth keeping in touch with the estate agent and notaire so you are up to date with the progress of the sale and have a better idea of a completion date
Comments
9 responses to “The Compromis de Vente”
i am supposed to complete on a property soon.. i have to withdraw as the exchange rate has become so bad that the property has become over priced… also by looking the property market is slowing and prices are dropping..i have told agent . and they say i have to pay there 10.000euros fees if i withdraw.do you know if this is correct as in comprimi the vender pays the estate agent.
Hi Lorna, difficult to say completely what you should do without full info on your situation, but if you have paid your deposit and pull out of the deal you will lose it.
If it’s more complex than this you might have to call upon a notaire to help you further.
Regards
Craig
I am selling a house in France and the seller has failed to complete for 20 months after the completion date fixed in the compromis. There are no applicable clauses suspensives. The compromis was drawn up by the agents and in addition to the usual penal clause which says that the deposit will be lost if the buyer fails to complete, there is also a general condition which says that the deposit can only be forfeited with agreement by both parties or with a court order. Is this usual, or in fact legal? The buyer, who lives in the US, refuses to consent to forfeiting his deposit and I am faced with the expense of obtaining a court order to get the deposit.
I paid a deposit on a flat in June. The compris de vente stated that the size of the cellar was double the size of the actual cellar to go with the flat. Because no satisfactory recompense was made, I pulled out of the contract and my Notaire advised me that I was eligible for a full refund of my deposit because the contract was not met. This was in early October and I have not received any money or information why not even though I have asked my notaire on 2 occasions. My notaire says that she has not had a reply from the vendor’s notaire. Do you think I have been given false information and that I am not eligible for a refund?
Dear Peter Sadgrove,
The clause subjecting the deposit to be refunded upon an agreement by both parties or upon an enforceable court order is in effect a usual one. Unfortunately, it is also usual that notaries tend not to get involved in a matter that becomes contentious.
It may be of interest to you that the costs of litigation may be refunded to you by the other party if a court order is issued in your favour. However, it still leaves the sting of advancing the fees until then. There is sometimes a possibility to avoid litigation by a mediation procedure which, if successful, reduces costs and time. I may be able to help, should you need any legal advice and assistance to act on this (guillaume.barlet@bhim.co.uk).
Kind Regards,
Guillaume Barlet
French law & wealth consultant
Bank House Investment Management Limited
Dear Jane Marston,
It is difficult to assess your situation without any knowledge of the clauses inserted in the contract mentioned. However, usually notaries include a waiver protecting the vendor should any discrepancy exist between the surface area in the contract and the real surface area. This does not mean that it has been applied in your case and even if it has, it may not prevent you from claiming a refund.
I may be able to help, should you need any legal advice and assistance to act on this (guillaume.barlet@bhim.co.uk).
Kind Regards,
Guillaume Barlet
French law & wealth consultant
Bank House Investment Management Limited
Dear Sir,
I am buying property from 19 beneficiaries (succession), and one of these is refusing to complete. The date was 30th June. My notaire tells me that a court order has been made. I don’t understand the significance of this ‘court order”
Please help.
S
Dear Snotay,
Assets sold from a succession can be tricky in particular when some heirs or beneficiaries are being difficult.
There are different procedures and it would be hazardous to let you know which one has been pursued. I would be glad to help but would need more details.
I suggest contacting me on the details below.
Kind Regards,
Guillaume
French law & wealth consultant
(0033) (0) 1242 520 074
guillaume.barlet@bhim.co.uk
If the sellers have signed a compromis de vente, but the buyers have not, is there a contract, i.e. an obligation on the sellers part to proceed with the sale? No deposit has been taken.
NL