Today is: 30 July 2010
David Anderson, solicitor and chartered tax Adviser, has an imaginary conversation about French conveyancing with an English person proposing to buy a property in France.
Please note that taxation and property are complex subjects and you should not take or refrain from taking any step without full independent advice on the particular facts of your case. The content of this article is of a general nature and no liability is accepted in connection with it.
Q. I have read up on the French conveyancing procedures and it seems straightforward. What can go wrong?
A. Quite a lot. One of the main problems is that the notary usually gives the buyer limited information (if at all). The canny buyer pushes the notary for information both before and after signature of the compromis de vente (contract). In property investment knowledge is money, so the more you know, the earlier you know it, the better. British buyers rarely do this in France and are easily brushed off with “this is the French way” which is nonsense.
Q. What sort of documentation should I see?
A. It is useful to see the certificat d’urbanisme, which is roughly equivalent to a local search. Some notaires in fact do not apply for this because it is quicker and cheaper to get a renseignement d’urbanisme, which both has less information and does not make the local authority liable in negligence, for incorrect information contained in it. This point is not widely appreciated by UK buyers. Most UK buyers do not see or go through the certificat d’urbanisme, which in many cases is not prudent.
Q. How do you analyse the result of the search?
A. The search contains matters such as the “occupation coefficient” which are best dealt with using expert advice.
Q. Can you ask additional questions when applying for a certificat d’urbanisme? For instance, what the plans are for adjacent land?
A. No. However, you can ask the Mairie separately. This is a good idea. In practice the certificat d’urbanisme either comes directly from the Mairie or if the Mairie is small it comes from the Direction Départementale de l'Équipement (DDE), which fills it in, though the Mairie signs it off. In small towns or villages, we may be able to speak to the Mayor him- or herself directly and pose questions in this way !
Q. How about other searches which are usually undertaken in England?
A. They are often not done by the notary in France. These could include water/sewerage searches, searches of the actual address of the property (numerotage), and for the certificat d’alignement.
Q. I understand the Mairie and the French Agricultural Land Board (SAFER) usually has pre-emption rights over the land. Why can’t the notaire do the pre-emption search before I sign the compromis de vente ?
A. This is quite frustrating for people who want to “exchange and complete” simultaneously. The notaire has to give these bodies information about the sale including the price in case they want to buy it. He cannot do this until exchange of contracts because only then is the agreed price set in stone. Be careful about money “sous la table”; it may appear a good deal until the authorities pre-empt you at the price set out in the contract.
Q. How does the notary get the documents from the Cadastre (“land registry entries”)?
A. By internet. However there is no detailed plan showing the plot.
Q. I understand one does not raise pre-contract enquiries in France?
A. Generally this is the case, though in our view you should (and could). There are draft French pre-contract enquiries, which notaries have and will use if pushed hard. We recommend they are used if practicable.
Q. What sort of pre-contract enquiries should be raised?
A. Similar to the ones in England. These cover disclosure of any disputes involving the property, known defects affecting the property, access including connections to utilities and any rights of way affecting the property, etc..
Q. What about flats?
A. Different pre-contract enquiries are used here. You should see the règlement de copropriété, which is similar to the lease. Many UK buyers buy flats without the notaire providing a copy of this until completion. Check, for instance, that holiday lets are allowed (if applicable). The management company known as le syndic should have a cahier technique showing works on the building. If this is not available (even if you don’t look at it) this demonstrates somewhat the quality and professionalism of the Syndic.
Q. What about mortgages on the property?
A. This is not like England. The notary pays off the mortgage from the sale proceeds. Often the notary does not know the seller’s outstanding mortgage on the day of completion. If the seller has negative equity the notaries have an insurance policy, which covers this. However, this only protects you to the extent that money passes through the notaire’s account. This is where “sous la table” deals for high amounts can go badly wrong and buyers can find themselves talking to insurance investigators (which may be the least of it).
Q. What about the day of completion?
A. Make sure you read the transfer document carefully. We have seen instances in which additional onerous clauses have mysteriously appeared, which clauses were not in the contract. If you have any doubts about papers handed to you for the first time at the completion meeting do not complete. Get them checked first even if completion is delayed a few days. Better, insist that the draft transfer is faxed to you or your legal adviser in advance of completion.
Sykes Anderson can advise on both sales and purchases of French property.