French conveyancing

David Anderson takes an in-depth look at how French conveyancing differs from the English system

Anyone who has purchased a property in England will be familiar with the procedures. The conveyancing solicitor makes enquiries of the seller’s solicitor about the property, usually with standard enquiry forms, makes searches of the local authority, negotiates the contract and then completes. A surveyor inspects the property and produces a report on its condition and a valuation.

The procedures in France are quite different and in some ways better than the way things are done in England. The main point to grasp is that the notaire is not like a solicitor. His job is to ensure that the title is transferred to the purchaser and also that all stamp duty and other taxes are collected. As such he does not go into the same level of detail as a solicitor. I have also noticed how little a notaire is prepared to put in writing when it comes to replying to any specific questions.

No pre-contract enquiries

In French conveyancing there are no standard pre-contract enquiries. Attempts to obtain written replies to enquiries about the property from the seller will meet with resistance. The key is to take your time and ensure that any matters which you are concerned about are included in the contract for sale (the compromis).

Do not be rushed into signing the compromis. This document will have standard terms but any particular matters – such as, for example, confirmation that there has been no dispute with a neighbour – need to be dealt with by a declaration from the seller in the compromis. In general, the notaire will not volunteer to insert such clauses in the compromis preferring instead to keep to the usual precedents they use.

It is up to the buyer to raise matters that may either be of a general nature or more likely specific to the property. These will often arise from an inspection of the property and may include declarations as to the property’s condition.

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The notaire will not usually obtain information for you about service charges on the property. These issues are usually dealt with shortly before completion. The notaire will not usually ask the council about any roadworks, plans for adjoining properties or other proposals which may affect the property. These need to be dealt with by you directly with the mairie.

Longer contracts

It is important to remember that compromis in France are longer and more detailed than contracts in England. You should not be concerned about this as a purchaser, provided the terms are fully explained to you and you understand them.

In general, purchasers will be better off if the contract spells out in more detail their rights and is tailored to the particular property. It is worth reading the description of the property in the compromis and checking that the property is correctly described. This description is always set out in detail and includes the number of rooms and annexes. If the description does not tally with your inspection of the property, this means there has been some building work which may lead you to making further enquiries such as asking for copies of planning permission. (In England, you never see detailed descriptions of the building in a residential sale contract.)

Subject to contract

French law does not have the English concept of ‘subject to contract’. This wording is typically put on documents in England, such as letters, to make it clear that no contract comes into existence until the parties formally ‘exchange contracts’ which is always done by the solicitor, usually in conjunction with the payment of the deposit.

In France, it is easy to create a binding contract and this comes about once agreement is reached on the price and the property as well as the parties. In some cases buyers are asked to sign an offre d’achat which is a simple offer stating the price and the property.

The offre d’achat is sent to the seller who can normally accept it within a stated time period. It is important to realise that this document creates a binding contract and many English buyers do not appreciate this. If you don’t wish to be bound immediately, you should simply ask for a compromis to be prepared instead (you have a seven-day cooling-off period after signing the compromis).

Diagnostic tests and surveys

In France, a survey of the property is generally not undertaken as a matter of course. Instead there are various diagnostic searches. These are mandatory although some do not have to be undertaken depending upon the age of the property and its location in France. The diagnostic searches cover lead, termites, asbestos, electrical risks and “natural and technological risks”.

The diagnostics are carried out by specialist companies that produce reports which are obtained by the seller, not the buyer. It is important to appreciate that the diagnostic searches are carried out in a non-destructive way. In other words no holes are bored into walls or floorboards lifted. As a result, the liability of the diagnostic company is limited to what they can discover through a non-destructive inspection.

It is open to you to obtain your own English-style survey although this is quite rare in France (and surveys will also tend to be non-destructive).

It is important to read the diagnostic searches properly. They are of a technical nature and if your French is not reasonable, you will have difficulty reading and understanding them. If any issues are raised by the diagnostic searches or you are concerned about matters which could not be revealed by non-destructive inspection, then you should seek additional clauses to be inserted in the compromis.

The liability of the seller is usually limited to defects in the property which are ‘hidden’ and of which they are aware. As such, it is usually very difficult to sue the seller if you, for instance, discover that there are termites under the floorboards which have not been revealed by the diagnostic search.

Rights of pre-emption

In most parts of France, there are rights of pre-emption over the property. This usually means that the mairie has a right of first refusal over the property. The seller, once he has concluded a contract with you, has to offer the property to the mairie on the same terms that he has agreed with you. It is quite rare for the mairie to decide to buy the property. There are similar rules for agricultural property.

Types of contract

Broadly speaking, there are two types of contract for the sale of land in France. One is the compromis and the other is promesse de vente.

The compromis is a contract that binds both parties while the promesse de vente gives the buyer an option to purchase by a stated time. Important legal consequences flow from whichever form of contract is drawn up at the outset.

In our experience, notaires sometimes do not think the implications through and buyers have no idea which type of contract puts them in the best position. For instance, in a compromis, time is generally not of the essence for completion.

This means that if there is a delay in completion, you cannot claim that you are no longer obliged to purchase the property. The completion date is simply put back a reasonable period of time. In the case of a promesse de vente, the position is different and if you do not exercise your option and complete on the stated time you will lose your deposit and the seller is free to sell elsewhere.

Cooling-off period

In the case of purchase of residential property, there is a consumer protection law which gives the buyer a seven-day cooling-off period. It is important that specific notices are served on the buyer which have to be done by registered post. These can be sent by the agent or notaire. The buyer can withdraw for any reason until a period of seven days has elapsed from receipt of the notices giving him his right to withdraw.

Suspensive conditions

The French contract is concluded at a much earlier stage than the equivalent English contract. The French contract contains various suspensive conditions, which allow the buyer to withdraw from the transaction if they are not met. This could include, for instance, any adverse information received from the town hall that materially affects the price of the property.

It is important that these suspensive conditions are checked through carefully. It can include matters such as obtaining a mortgage or being able to sell an existing property. Needless to say this is a fruitful area for litigators and care needs to be taken to ensure all conditions you may need are included, and that the drafting of the clauses is watertight. n

David Anderson, solicitor advocate and chartered tax adviser

Sykes Anderson LLP

www.sykesanderson.com