Coronavirus: What do buyers of French property need to know?
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Many people are currently confused about what to do and what can be done if they are currently in the process of buying or selling a house in France. Here’s the information so far.
In these uncertain times, many people are questioning how to proceed with ongoing French property transactions, especially in the wake of recent government advice for people to postpone any house moves within the UK. The French lockdown period has been extended until April 15th, and given the UK is currently also in lockdown until at least the 13th of April, flexible travel between the two countries is looking unlikely in the near future. We’ve enlisted the help of some French property experts to answer your questions.
I’m in the middle of making a property purchase. Can I still proceed to completion?
Sue Busby, of France Legal, says: From a practical point of view, it may still be possible to proceed to completion. Most notaires are working, albeit from home, and can receive and prepare documents. Providing the land registry and the Mairie have been able to send the documentation required for completion to the Notaire, then the sale deed can be prepared. Of course, there may be hold ups as there may not be as many people physically working in these places at the moment but technology allows most tasks and communications to continue.
How can I get around signing a contract in person? Can I engage a Power of Attorney?
Barbara Heslop of Heslop and Platt French law specialists replies: Urgent measures are being taken at the highest level in France to pass emergency laws and put in place new processes to enable certain transactions to proceed remotely. The French Authorities, not generally known for doing anything quickly, have certainly risen to the challenge and we have been reliably informed that an ‘Ordonnance’ will be issued from the week of Monday 30 March 2020 to allow for the remote signature of certain notarial deeds. This will be a temporary relaxation and will only apply for the duration of the current lockdown or ‘confinement’ as it is called in France.
It will remove the normally strict requirement for signature of such deeds either in person (i.e. in front of the Notaire in charge of the transaction) or pursuant to a Power of Attorney which a party to the transaction has already given. In place of the usual requirements, it will be possible to complete transactions using electronic signatures via web portals such as DocuSign and Yousign. The use of video conference and video links (such as Microsoft teams) is also likely to be introduced so the Notaire can see the clients actually signing the documents and vice versa.
Verification of the identity of a signatory remains, as always, of paramount importance and so full use of modern technology will be employed to safeguard not just the parties to the transaction but also to protect Notaires, lenders and estate agencies against any potentially fraudulent activity.
In terms of a property sale and purchase, many estate agencies are already sending out contracts for electronic signature and this is likely to become more widespread over the coming weeks where a property was viewed prior to the lockdown and has progressed to the offer and acceptance stage. Notaires are also now accepting, for some transactions, signature of a Power of Attorney without certification of the individual’s signature, provided the individual sends back the signed Power of Attorney with a signed copy of the photo page of his or her passport.
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The Notaire will however only be in a position to complete the transaction if all the pre-completion formalities have been dealt with and all search results have been received. We have also been told this week that time periods which apply to certain formalities (such as the two month period for the purging of a pre-emption right in favour of the local agricultural body or the local commune), have been temporarily halted and the time period will not start to run again until after the end of the lockdown. This may therefore delay the completion of some sales and purchases.
For those buyers and sellers whose Notaire had already completed the administrative formalities and searches prior to the lockdown, it may therefore be possible to at least discuss fixing a completion date.
What if I am in fear of losing my income, or one of my family members becoming ill, and cannot continue with proceedings?
Sue answers: Even the death of a purchaser does not necessarily invalidate the contract but this would depend on the conditions in your contract. Under article 1195 of the civil code, it is possible to get out of a French contract by reason of an unforeseen change of circumstances occurring that makes it particularly onerous for one of the parties to proceed. For instance, if you lost your job and there was no reasonable prospect of getting another one soon, that might be considered a valid reason for withdrawing from the contract. Be careful though as some contracts contain a clause setting aside this right, in which case, it would simply not apply. If your contract does not contain such a clause then you can attempt to renegotiate the terms of the contract eg delaying completion or reducing the price. If the vendor refuses, the contract can be brought to an end, if both parties agree or a judge can be asked to adapt the contract or annul it.
The coronavirus situation in itself would not, in my opinion, constitute a valid reason for withdrawing from a purchase once a contract has been signed and the 10 day cooling off period passed. The best solution would be to negotiate an extension to the planned completion date. A supplement to the contract would need to be signed by both parties to this effect.
Am I able to physically move to France?
Barbara says: It is still unclear however whether the current restrictions in France allow for the physical moving in and out of a property. We suspect there will be very limited cases where the deferral of the completion date is considered impossible. In any event, furniture removal and installation whilst social distancing would undoubtedly be another challenge to overcome!
Any last words of advice?
Jacqui Reddin, Head of Sales Development at Beaux Villages, adds: My advice is don’t panic, and stay in touch with your agent. We are still actively dealing with ongoing sales and even have new ones since lockdown. The buying process is bound to take a bit longer, but if we all stay connected things will start to flow more smoothly.
Keep an eye out for more updates as we monitor the situation.
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