Explained: the compromis de vente
- Credit: Archant
Once a price has been agreed, the buyer and seller of a French property sign a preliminary contract, the compromis de vente. Here is everything you need to know about this legally binding contract
Ann Edmondson guides buyers and sellers through the practical elements of setting up life in France. Contact: email@example.com
What is the compromis de vente?
Of the two contracts that buyers normally sign in the French conveyancing process, the preliminary contract (the compromis de vente) is no doubt the most important. It is in this contract that all the requirements, wishes and needs of the purchaser must be expressed so that both vendor and purchaser understand the time frame within which the conveyance can be completed.
After deciding on a property, you will normally make either a verbal or written offer of purchase. Since the SRU Law of 2000, it is forbidden to hand over payment in any form, including cash, bank transfer or cheque at this stage.
Your offer should contain a succinct description of any specific needs and requirements you may have and, even if accepted by the vendor, the ‘real’ acceptance will usually be the signing by both parties of the preliminary sales contract. These specific needs will be included as clauses suspensives (let-out clauses) in the preliminary sales contact.
Once signed by both the buyer and the seller, the compromis de vente is immediately binding on the vendor and becomes binding on the purchaser after a 10-day period of reflection.
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What are clauses suspensives?
One example of a clause suspensive is the need for attaining planning permission, such as for the building of an extension, installing a pool, changing the use of the property, or creating the use of the property, or creating an easement/right of way across a neighbour’s property. Another example may be the need to make an application for a mortgage. As you will need planning permission or the agreement of your bank to proceed on the property, these conditions must be included in the contract. In the event that your requirements aren’t met, it will be possible for you to pull out of the purchase without any penalties.
Once you have agreed the terms of the contract, it is only with the express agreement of the vendor, if at all, that the purchaser will be able to make any changes. The vendor may request a financial compensation for any changes they agree to, especially if it delays the date on which they will receive their payment of the sale.
Obligations of the vendor
The Alur Law of 2014 introduced and underpinned certain obligations of the vendor. Although vendors had hitherto been under obligation to disclose in good faith all information concerning the property, they now have the obligation to do so prior to the signing of the preliminary sales contract.
For example, if the purchaser intends to acquire a property with a sea view, the vendor is obliged to disclose if they are aware of any construction project that will obstruct that view – although the project will normally be revealed in the town planning searches that are carried out by the notaire after the signing of the preliminary sales contract.
Other examples of the statutory obligation include the disclosure of any building works that have been carried out without required building permission, as well as the provision of documentation concerning any co-ownership rules if the property is situated in a co-ownership.
Obligations of the purchaser
Although as a purchaser you have certain rights of protection, you also have certain obligations. You have the obligation to inform the vendor of any applications that will be made so that the vendor has a clear understanding of the timeframe of the completion of the sale – and therefore when they will be paid. The vendor may be in a hurry to sell the property and may not be able to wait for the conditions of the purchaser to be met.
If the purchaser needs to include any additional or omitted desires between the signing of the preliminary sale contact and the completion contract, this will necessitate a modification of the preliminary sales contract – possibly triggering new negotiations with the vendor, rejection by the vendor or the demand of compensation payments if the modifications means that the payment is delayed.
Drafting the contract
In a simple sale where the purchaser has no particular requirements, the preliminary sale contract may be drawn up by the estate agent. However, bear in mind that the agent may be keen to have the sale signed and it’s possible that they won’t have all the necessary skills of knowledge to talk you through the process.
It is highly recommended that you seek advice from either your solicitor who is well versed in French law or the notaire who will be handling your property purchase in France.
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