Buying guide part 7: the cooling-off period
PUBLISHED: 16:12 07 July 2015 | UPDATED: 10:59 28 October 2015
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Karen Tait lists 10 things you need to know about the cooling-off period and deposit, from whether you can pull out of the contract to who you should pay
Finding your dream French property is an exciting time. But what happens if a decision made in the heat of the moment doesn’t seem so wise once you’re back on British soil (or even back at your holiday gîte)? Is there anything you can do if you change your mind after you’ve had your offer on the property accepted, signed the sales contract and handed over the deposit? Luckily, in France, where contracts are exchanged at the start of the buying process rather than at the end (as in the UK), you do have a period of grace during which you can legally pull out of the deal. Here are a few crucial facts surrounding the cooling-off period and the deposit.
1. Once the initial sales contract – usually the compromis de vente – has been signed by both the vendor/s and buyer/s, the buyer has 10 days to reflect on their decision. During this ‘cooling-off’ period, the buyer can pull out of the deal without penalty, for any reason. The seller, however, does not have the same advantage as the buyer.
2. The 10-day cooling-off period only applies to a property (a house, apartment etc), not to land or a building plot. You also don’t benefit from this time for reflection if you are buying the property via a Société Civile Immobilière (SCI), or if you are registered in France as a property professional who makes a living from buying and selling or developing property.
3. The cooling-off period starts when you receive the initial sales contract – if you sign it in front of a notaire, they will probably hand you the contract then and there, and ask you to sign receipt of it. If the notaire does not give you the signed compromis, they are obliged to send it to you by recorded delivery post (lettre recommandeé avec accusé de réception); the cooling-off period commences when you sign for it. If it is a bank holiday or a weekend, the 10 days start from the next working day. If you sign by power of attorney then the cooling-off period starts the day after you sign for the recorded delivery containing the contract. If you sign the contract with an agent, you should be required to sign a statement saying you are aware of the 10-day period (this should only be signed after the compromis de vente has been signed by both parties). French law requires that the buyers specify the name of the professional who assisted them with the signing of the contract, whether it is the agent or notaire, and where and when the contract was signed.
4. Where a purchase is by a couple, it used to be common for a single notification to be sent jointly to them, which was often returned with only one signature. However, the French Supreme Court has now ruled that a single letter should be sent to each purchaser, even if they are married, and each should return a receipt confirming that they read and understood the cooling-off conditions. While all these regulations may seem over the top, it is important for the notaire (or agent) to ensure the correct notification procedure has been followed to avoid any problems further on down the line.
5. If you do decide to pull out of the contract, a strict procedure must be followed. You must send a recorded delivery letter to the estate agent or notaire giving notice of your withdrawal, before the 10-day cooling-off period expires. You don’t need to give a reason. If you are still in the area, you can call in to the notaire’s office, and they will ask you to sign a withdrawal form or letter.
6. On signing the compromis de vente (or other form of sales contract), you are required to pay a deposit, usually 10% of the sale price. The amount is sometimes less, particularly on more highly priced properties. For new-build properties, you only pay 5%.
7. You can pay the deposit to the notaire or to an agent if they have an escrow account. Never give the money direct to the seller or to an unregistered agent. If you are concerned about paying the deposit to the agent, ask to see their carte professionnelle as it should show whether they are appropriately registered and insured to hold deposits.
8. If the buyer pulls out of the deal after the 10-day cooling-off period, and providing all the conditions in the contract have been met (click here for for information about the contract and the conditions suspensives), then the deposit is forfeited.
9. Technically, the seller could take the buyer to court to force them to proceed with the sale, but this is a rare occurrence and it is not guaranteed that the seller would succeed.
10. If the buyer pulls out of the contract because one of the conditional clauses has not been met (including failing to get a mortgage), the buyer will receive their deposit back.
More information can be found on the French government website: vosdroits.service-public.fr/particuliers/F10485.xhtml
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