If you intend to purchase a property in France, the chances are that the French conveyancing procedure will be new to you.  How does it work in practical terms?

The purchase takes place in two stages:

1) The preliminary sales agreement (« Compromis de vente »)

Once you have found the property, an agreement is negotiated between you and the seller.

  1. a) The preliminary contract is the document you sign in the case you wish to purchase a property from a private seller. It is as binding as a sale contract for both contracting parties.  On signature of the contract, you are generally asked to pay a deposit of 5 to 10 % of the price. You pay it to the notary on an escrow account.
    This down payment is held by the notary and not given to the seller until the final sale date.
  2. The suspensive condition to this contract is the mortgage authorization from the bank. In the contract, the mortgage criteria are listed (interest rate, mortgage amount, etc) and if the buyer cannot find a mortgage that meets the criteria, then this will annul the sale, and the buyer will get a refund of his 10% down payment

  3. b)The reservation contract is the document you will sign in the case you make a purchase in a new program sold as VEFA (Vente en l’Etat Futur d’Achèvement), that is to say off plan. On the day you make the reservation, you will have to sign :
  4. - the contract itself,
  5. - the specification sheet of the building
  6. - the block plan as well as the floor plan,
  7. - and in the case of a lease-back program, the lease contract which guarantees you a rent for 9 to almost 12 years.

You will also have to make a reservation check of 5 % of the purchase price - to put the apartment on hold-- to the bank of the notary in charge for the program.

When buying off plan, the owner will be asked, once the bill of sale has been signed, to pay the total price through stage payments proportionate to the progress of the works. A payment schedule is attached as an annex to the reservation contract.
The contracts are then countersigned by the developer and a countersigned copy is sent to the purchasers. The cooling off period of 7 days that the purchasers have if they wish to cancel their purchase starts on the day that the letter is first delivered. After this period, if you don't want to buy the property, you will lose that amount unless the suspensive clauses are put into practice.
There is usually a three-month date set from the date of contract, which will be the final closing date. This gives the buyer sufficient time to secure a mortgage for the property.

2) The Final Deed (“Acte de vente”)

The final deed finalizes the transaction between the buyer and the seller. The signing of the deed by both parties has to be witnessed by the solicitor (“notaire”). He's a public officer who is impartial in theory. Nevertheless we prefer to introduce you an English-speaking notary who will defend your exclusive interests.  In this way we avoid any conflict of interests because each party has its own representative.

It can take anywhere from two to three months - from the moment the property buyer signs the Preliminary Sales Agreement, to the moment he or she signs the deed of sale.

Before presenting the deed of sale for signature, the notary is to verify that the seller is really the owner of the property in question, to verify the state of the building and any government mandates to take this building over by government control (only in rare cases when the building is considered to block some important government project). Recent laws require that the notary verify the actual size of the apartment via an architect’s drawing, that the pipes in the building do not have lead in them and that there are no termites in the building. Any of these can be legal grounds to annul the sale if the buyer wishes to do so.
Once the date for the definitive deed has been fixed, the notary will collect all funds to cover the transaction price and the registration fees (around 7% of the purchase price and payable by the buyer). The draft of deeds are sent to the purchaser by the solicitor with, if necessary, power of attorney if the client does not wish to go to the solicitor’s office in person to sign the final deed of sale. This power of attorney gives the solicitor all authority to sign for and on behalf of the purchaser. From that moment onwards, the property will be yours.
French law states that the notary must retain the original deed of sale, while the buyer will be given an official copy.


Credit : fp-consultant