French property law: clause and effect

Writing certain clauses into property contracts can protect your position as a buyer. Sue Busby details three areas that can help you safeguard the initial purchase contract

Once you have agreed to buy your French property, you will be presented with a contract, usually in the form of a compromis de vente. This is a very important document which binds you to the sale, just like the one that we exchange shortly before completion of the sale in the UK.

Once you have signed it, you can only withdraw under certain limited circumstances. Therefore, it is important to ensure that it is as protective as possible for you as the purchaser.

Contracts may be prepared by the agent or the notaire and the quality varies a lot. Certain clauses which are desirable for the purchaser are regularly missing from these contracts, or are in a form which is not as useful as they could be to the buyer, as outlined below.

SUBSTITUTION CLAUSE

It may not always be obvious at the beginning of the transaction which is the best type of ownership structure for you.

Should you include your children as owners? Should you buy the property through a company instead of as individuals? Buying through a company can sometimes be a good way to avoid French succession law. Or you may like to buy the property in one spouse’s name only for tax purposes.

Often these things are not considered before you are presented with the all-important contract to sign on the dotted line. However, it is possible to include a substitution clause in the contract, which means that whoever you designate as purchasers at the beginning of the transaction can be changed up until the time of completion.

If after discussion with your lawyer it becomes clear that ownership through a company would make more sense or that you should put your property into the names of your children instead of yours, you are free to do this. Without the substitution clause, however, you have no automatic right to change the name of the buyers.

PLANNING INFORMATION

Most contracts will include a clause that allows you to withdraw from the contract if an inconvenient public utility easement is discovered on the property.

This means, for example, that a public body/authority has a right to come onto the land to check something or carry out maintenance which may mean that you are prevented from using that part of the land.

Another example would be having to keep the space above your land clear so as not to interfere with radio waves.

The matter of alignment is also often not adequately dealt with. Throughout France there are alignment projects going on, giving local authorities the right to shave away pieces of land for the benefit of the commune, usually for safety reasons, such as widening the road.

The clause will usually say something like ‘The buyer can withdraw from the sale if an alignment project renders the property unfit for its use as a dwelling’. It is fairly obvious that shaving away a section of the land does not necessarily render the property unfit for its use as a dwelling but may well spoil the enjoyment of the land and lower its value.

Therefore, it is a good strategy to modify this clause to state that you can withdraw from the purchase if the property is affected by any alignment project at all, or at least one that affects its market value.

EASEMENTS IN TITLE DEEDS

While the clause above may protect you against public utility easements and alignment projects, it will not protect you against private easements such as a right of way across the land for pedestrians, or perhaps for a neighbouring farmer to drive his tractor across your land in order to access a field situated behind the property.

Such easements are often not discovered until just prior to completion, as they are found either in land registry documentation or old title deeds, yet your contract obliges you to accept any such easements on the property before you know what they are.

Therefore, it is very important to add a clause stating that you can withdraw from the purchase if any rights of way or other easements are discovered that may lower the value of your property, or spoil your enjoyment of it.

I have only mentioned above the clauses that are most often missing from a contract. Of course, there are many others that should be there so it is always advisable to instruct a lawyer to check and provide you with a report and advice on the contract before you proceed.

A little bit of care at the contract stage can save a lot of heartache later on.

Sue Busby is the owner of France Legal, a firm of French property lawyers

Tel: 01449 736644

www.francelegal.co.uk