Legal - Acquisition - Sales contract
Once you have found a property, you will negotiate and enter into an initial agreement with the vendor. French law does not recognize the concept of subject to contract and therefore an offer to purchase a property should not be made unless you are absolutely certain that you wish to purchase. You should consider before the offer is made all the conditions that you wish to include in the contract.
Compromis de Vente
A common type of preliminary sale agreement for a property purchase is called a Compromis de Vente and is a binding contract between the buyer and the seller, which sets out the terms and price of the sale. Let-out clauses (Clauses Suspensives) can be inserted into the contract making the purchase subject to certain conditions. Usual clauses are:
The purchaser cannot obtain a mortgage or property loan;
Exclusion by the French Land Commission (SAFER);
An unsatisfactory Certificat d'Urbanisme, assessment of planning status of the property.
Promesse de Vente
Another type of preliminary sale agreement is the Promesse de Vente which is similar to the Compromis de Vente except that there are no let-out clauses (Clauses Suspensives). With this contract the seller agrees to sell the property by a certain date, for a certain price and according to set conditions. This is the most common type of agreement in France, and the main advantage to a buyer is that the seller cannot withdraw its acceptance of your offer if all of the conditions in the agreement are met. The disadvantage to the buyer is that if he decides to withdraw he will lose his deposit.
The initial contract is normally prepared by the estate agent or by a notaire for larger transactions and is often available for signature. The deposit will be forfeited if you withdraw from the purchase for any conditions not covered by the contract and you may be sued for non-completion.
Deed of Sale
Completion is when the final deed of sale (Acte de Vente) is signed at the notaire's office and legal ownership is transferred to the buyer. It is also the point when the payment of the balance of the purchase price plus any other payments, such as the notaire's fees, taxes and duties are due. If a mortgage has been arranged then the bank will pay the mortgage monies directly to the notaire.
It is normal for both parties to be present when the deed of sale is read, signed and witnessed by the notaire. Each page has to be initialed by both the seller and the buyer and both must sign the last page after writing in French "bon pour accord" which means they have understood and accept the terms.
The proof of ownership is provided and guaranteed by registration of the property at the French Land registry (Bureau des Hypothéques). The relevant sections of the deed of sale are sent for registration at the Land Registry and after about 2-3 months you will receive your title of ownership (Titre de propriété).