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Overview of Purchasing Real Estate in France (and the Compromis de Vente)

David Ronis

By some accounts, France is the most popular vacation destination in the world. For generations, its attractions have been a great source of pleasure for countless English speakers. Many of these visitors have developed interest and subsequently purchased property in France. Some have established secondary residences. Others have decided to relocate altogether in order to pursue business or personal goals. Still others move for their retirement.

In France, these English speaking buyers encounter procedures, customs and protocol surrounding real estate transactions that are quite different than those in their own countries. Much has been written on the subject in order to satisfy potential buyers' need for information. In fact, this market is quite adequately served by a plethora of books that have recently been published as well as a growing number of Internet web sites. However, despite this wealth of available information, the language barrier presents a formidable obstacle for potential English-speaking buyers who lack adequate proficiency in French. Consequently, many tend to work with real estate and legal professionals who have a command of both languages. Others will employ interpreters. Still, an information gap exists. There does not appear to be a body of professionally drafted, readily available English translations of French real estate documents. Non-French-speaking buyers must rely on others for translation assistance, whose skills may not be sufficiently fine-tuned to the subtleties of legal translation. The need for comprehensible, translated documents of this kind is evident. It is the intent of this paper to contribute to filling this gap by translating one commonly found document - the Compromis de Vente [Bilateral Agreement to Sell/Buy]. To give the translation some context, it will be preceded by an overview of the purchase process. If the reader is interested in more detailed information on the subject, a bibliography and suggestions for further reading can be found at the end.

To Receive a Copy of the Translation

As this was an academic paper for a course in French to English Legal Translation, the translation of the Compromis de vente was its centerpiece. I thought that the Slow Travel community would be more interested in reading about the purchase process than examining the translation of a legal document. Thus I have edited the content for Slow Travel consumption by leaving out the contract. If anyone who reads this is interested in seeing the Compromis de vente itself as well as the translation I did, it is available to purchase.

Purchasing Property in France - Overview

Before setting out to purchase property in France, is advisable to take certain preparatory measures. The buyer should decide where in France s/he wishes to purchase property, what kind of property s/he is looking for and how s/he intends to use it. Whether the property is intended as a primary residence, vacation home or rental property, there will be legal and tax ramifications affecting its purchase and any subsequent sale. It is also recommended that the buyer spend quite a bit of time in the area in which s/he intends to purchase before seriously looking at properties. The more familiar s/he is with the geographic area, the community, its resources, customs and quirks, the fewer "surprises" there are likely to be after purchase (e.g. moving in and later finding out that the neighbor's rooster crows daily at 4:30am).

The means of financing the purchase will impact the transaction. It is best for the buyer to have worked out as many financial details as possible early on during the process. S/he should have established a budget, made mortgage inquiries and preliminary application, if necessary, and be informed about the various expenses and fees associated with the proposed purchase.

There are some cases in which property should be inspected or surveyed by a qualified professional before an offer is made. Traditionally, this has not been the protocol in France. However, depending upon the property, there may be structural or infrastructure issues that it would be wise to have inspected. Inspections can be done by an expert immobilier [chartered surveyor], architecte [architect], géomètre expert [land surveyor], or even a surveyor based outside of France.

Other factors affecting the purchase, which should be considered prior to looking seriously at properties, include taxes, plans for construction or renovation, and inheritance issues. Taxation in France is quite complicated and there are significant differences between the US and French systems. For instance, in France, there are two kinds of basic property taxes - the taxe d'habitation, paid yearly on January 1 by the person inhabiting the property on that date, whether owner or lessee; and the taxe foncière, paid by the owner of the property regardless of occupancy. There is also the French version of the Capital Gains Tax, called plus-value, as well as gift and inheritance taxes, all with particular stipulations and requirements unlike those in the US. In addition, residents and non-residents of France pay different taxes.

Some properties are purchased with the intention of doing some kind of construction or renovation. If this is the case, there are various legal documents that protect both owner and contractor. A devis [detailed estimate for work] is commonly drawn up, laying out details and costs of prospective projects. Building on undeveloped land requires different documentation and is regulated by another set of rules. Additionally, in some locales, changes made to the exterior of buildings are regulated and must be done with the proper official clearances, usually issued by the local mairie [Mayor's office/Town Hall].

Inheritance rules in France are rather complex and quite restrictive as well, especially with respect to real estate. Regardless of the owner's legal residence, the disposal of biens immeubles [real estate] in France is subject to the regulations of French law. The impact of these laws can often be quite different than that to which we, in the US, are accustomed. In many cases, rules of inheritance favor children or other family members over spouses. There are ways of ensuring one's wishes after death are followed, but doing so is not a simple matter. One popular, but not uncomplicated, way to deal with inheritance issues is to purchase the property through a limited corporation called a société civile immobilière or SCI. Simply put, since shares in a company are classified in France as biens meubles [personal property], they are not governed by French inheritance and taxation regulations. Thus, the disposal of real estate purchased through such corporation is not subject to the same stringent laws as is property classified as biens immeubles. All in all, it is advisable for the prospective homeowner in France to seek legal advice regarding inheritance issues before purchasing.

When ready to proceed, the buyer has a number of options. Among the different types of properties on offer are parcels of land with or without existing structures, new houses or apartments just being built, currently occupied, independently-owned houses and apartments, and properties that are part of a coproprieté [co-ownership arrangement similar to a condominium in the US]. Properties on the market can be found in any number of local and international real estate publications as well as on the Internet. If the buyer wishes to look while driving or on foot, available properties can be found displaying à vendre [for sale] signs. Alternately, s/he can work with an agent immobilier [real estate agent]. Properties are also sometimes bought at auction (listings can be found at a notaire's [Notary (public)] office, or in a publication called Marché Immobilier des Notaires). New properties are frequently marketed through promoteurs immobiliers [developers] as well as by some notaires. One of the best sources of finding real estate is through word of mouth. Quite a few sellers do not advertise and prefer to sell directly to the buyer. When property is purchased this way, a significant amount of money can be saved by not paying real estate agent's fees.

Agents immobiliers essentially function in much the same way as they do in the US, that is to say, they match sellers with buyers. However, there are a few notable differences. As in the US, they are retained by sellers in order to market their properties. The seller usually pays the real estate agent's commission, which tends to be figured in when the sale price is established. Agents are obligated to act in the seller's best interest, however their own interests weigh heavily into the equation. If the sale does not go through, they are not paid. Agents' commissions can be anywhere between 0.5% and 10%. Often a lower percentage will be charged for a high-end sale and vice versa. Although there are some large real estate agencies in France, more often, agents work alone or at small agencies that cover a limited territory. When bringing a client to see a property, the prospective buyer is frequently asked to sign a bon de visite [property visitation slip], which protects the agent by stating that it was s/he who officially showed the property. Working with an agent in France also differs from the US system when it comes to various licensing, bonding and fee-paying formalities. When dealing with an agent immobilier, it is wise for a buyer to establish as good a working relationship as possible, but also to seek their own legal advice.

The majority of real estate transactions in France employ a notaire, a legal professional who is also a public official. Although it's perfectly legal to purchase property without one, only notaires can officially witness and register real estate transactions with the bureau des hypothètiques [Land/Mortgage Registry], thus rendering them binding. All monies are paid to the notaire, who holds them in his or her bank account and distributes it, as appropriate, among the various parties owed. S/he also handles a number of other details of the transaction. Sometimes, notaires act as agents, most often in the case of an auction. Even though usually retained by the seller, a notaire, when acting in this capacity, must remain impartial as, officially, s/he represents neither buyer nor seller. Although notaires are public officials and their fees are set by the government, they are paid by individuals, most often buyers, in the case of real estate transactions.

The Compromis de vente

When a property is found and a price is agreed upon, one of three types of avant-contrat [preliminary agreement] is usually signed. The most commonly found avant-contrat (especially south of the Loire River) is the compromis de vente [(provisional) sales agreement], sometimes known as the promesse synallagmatique de vente [bilateral agreement to sell/buy]. This agreement legally commits both buyer and seller to the transaction, even though it is still pending. It effectively "front-loads" the purchase process by binding buyer and seller much earlier on than in parallel situations in the US, for instance. To all intents and purposes, this document officially makes the purchaser the new owner of the property. It is characteristically far more complicated than the final deed and, as such, it must contain full details, conditions, allowances and protection clauses. This document, and thus the concept it represents, is one of the distinguishing features of French real estate transactions.

Although there is no one standard format for the compromis de vente, the law requires that it include certain particulars of the sale. Some of these are the buyer and seller's état civil [full set of official personal information including citizenship and marital status], description of the property, ownership history, price, a statement declaring when the buyer will take possession of the property, and details of any mortgage. One required stipulation of the compromis states that the buyer must pay a deposit, amounting to 10% of the purchase price, that will be held in the notaire's non-interest-bearing escrow account. Upon closing, this amount will be paid to the seller and applied to the sale price. Typically, there are a number of clauses suspensives [conditions that must be met before the transaction is completed] included in the compromis, which usually protect the buyer. These can vary with the circumstances of each sale, but they might include stipulations such as the following, by which the buyer can be released from obligation without penalty if:

  • the transaction cannot be completed owing to the buyer's inability to obtain a mortgage. (This is one of the protections of the loi Scrivener.)
  • all rights of preemption are not removed.
  • a previously unknown easement is discovered.
  • the parties cannot obtain the title to the property.

Also, in the compromis, a date is set for the closing and signing of the acte de vente [final deed of sale]. Although the compromis de vente binds seller and buyer, the signing and notarial registration of the acte de vente at the Land/Mortgage Registry serves as protection from third-party intervention.

Note: The Compromis de vente and its translation were inserted in the original paper at this point.

Conclusion

Returning to the usual sequence of events in the real estate purchase process in France, after the compromis de vente is signed, there is usually a period of two to three months before the closing (even though this example stipulates only one month). During this time, the notaire initiates various searches, confirms that paperwork complies with strict rules in order to be accepted for registration with the bureau des hypothèques, insures compliance with the clauses suspensives and contacts any official bodies necessary to effectuate the transfer. When the parties come to the closing, they sign the final deed or acte de vente and the balance of the purchase price is paid. Is not necessary for both parties to be at the closing if they have authorized procuration or pouvoir, power of attorney, designating a proxy.

Although the acte de vente completes the transaction, the importance of the initial contract, in this case, the compromis de vente, is indisputable. Whereas the registration of the acte de vente by a notaire officially records and protects the transaction from third-party intervention, all of the binding terms are established and agreed upon in the compromis de vente.

One translated version of a sample compromis de vente, unfortunately, will not significantly alter the fact that a comprehensive set of translations of related documents is lacking in the larger body of information available on the subject. One is hopeful that, in the near future, such resources will be available for English speakers wishing detailed legal information regarding purchasing real estate in France. For further exploration of this topic, the reader is referred to the sources listed in the bibliography. They represent only a portion of the existing publications and web sites offering information and advice on this subject.

Glossary

à vendre: for sale
acte de vente: final deed of sale
agent immobilier: real estate agent
architecte: architect
avant-contrat: preliminary agreement
biens immeubles: real estate property
biens meubles: personal property
bon de visite: property visitation slip
bureau des hypothècaires: Land/Mortgage Registry
cadastre: Land/Tax Registry
clauses suspensive: conditions that must be met before sale is completed
compromis de vente: provisional sales agreement
coproprieté: condominium
devis: estimate for proposed work
état civil: personal information including marital status
expert immobilier: chartered surveyor
géomètre expert: land surveyor
loi Scrivener: law that includes mortgage contingency protection clause
Marché immobilier des notaries: publication listing properties on auction
notaire: notary (public)
plus-value: capital gains
la possession trentaine: 30-year residency claim
pouvoir: proxy, power of attorney
procuration: proxy, power of attorney
promesse synallagmatique de vente: bilateral agreement to buy/sell
promoteur immobilier: real estate developer
société civile immobilière (SCI): non-trading real estate corporation
taxe d'habitation: tax paid by occupants of property
taxe foncière: property ownership tax

Resources - Bibliography and Further Reading

Books

Use our link to Amazon.com to find these books.

Davey, Charles, The Complete Guide to Buying Property in France, Kogan Page, London, 2003.

DeVries, Andre, Buying a House in France, Vacation Work, London, 2003.

Hampshire, David and Watson, Jim, Buying a Home in France 2003-2004, Survival Books, London, 2003.

Hawking, Jane and Thoresby, Valerie, At Home in France: Guide to Buying and Renovating Property In France, Allegretto Publications, London, 1994.

Igoe, Mark and Howell, John, The Sunday Times Guide to Buying a Property in France, Cadogan Guides, London, UK, Pequot Press, Guilford, CT, 2002.

Kristen, Clive, Buying a Property in France, How To Books, London, 2002.

Lindsey, Alan S., Glossary of House Purchase and Renovation Terms -- French-English and English-French, Hadley Pager Info, Surrey, UK, 1996.

Raybois, Laurence, Chez Moi - The Foreigner's Guide to Buying a Home in France, Poli-Ana, Inc., Redmond, WA, 2002.

Websites

www.directgestion.fr: Links to a Word document with the French version of the Compromis de vente

www.assurteam.com/be/fr/gc/fr_contract_house.pdf: Links to a PDF file with the French version of the Compromis de vente

www.virtualhome.be/jur/juri_compromis.htm: Compromis de vente

www.ameri-title.com/ask_Easements.asp: Easements

www.bonoron-location.com/eng/conditions.htm: Election of domicile

www.sykesanderson.com/lib/french_marriage_contract.pdf: Election of domicile (links to PDF file)

www.france-property-and-life.com: France Property and Life - Moving to France Made Easy

www.francevoila.com/property/: France Voilà

www.frenchbuy2let.com: French Buy 2 Let

www.henleyglobal.com: Henley & Partners

www.french-property.com: Internet French Property

www.archidirect.com/francais/infocenter/loi_scrivener.htm: Loi Scrivener

www.anil.org/actualite/ha88/financement_88.htm#J

www.moving-to-france.com: Moving to France

www.sudfr.com/immobilier/legal.htm: My French Property Le Bonheur

www.propertyfinance4less.com: Property Finance 4 Less

chunking.express.free.fr/immobilier/guide5b.pdf: La Réglemention Immobilière (links to PDF file)

www.sesqui.fr: Sociétés Civiles Immobilières

larecherche.service-public.fr/ladoc.cgi?text=tutelle: Tutelle/Curatelle (site no longer works)


David Ronis is a classical singer, actor and translator living in New York City. www.davidronis.com

© David Ronis, 2004

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