Introduction

This guide is to give an outline of the conveyancing purchase and some of the matters to look out for.

Type of Property

The following are the most common forms of purchase:-

• A house
• An apartment
• A new build property
• A building plot

The process

Investigation

With regard to all types of property purchase, before signing any document, you should be satisfied that the property meets your requirements. By this we mean the purpose to which you will put the property once the transaction has gone through. You may wish to consider:

• Whether the property is connected to mains drainage and sewerage

• Does the property have the benefit of planning permission

• Can the property or its outbuildings be converted (Holiday homes)?

• If the property is an apartment, are you able to let it? Are there any restrictions on say holiday lets?

• Do you have the necessary rights to enjoy the property; for example rights of access or the right to use communal services?

• You may also wish to ensure that the property is not affected by development proposals by the local authority or other bodies such as SNCF

We raise standard form enquiries of the estate agent before you sign a purchase contract. Whilst there is resistance to completing these enquiries we consider them important and you must judge whether you wish to proceed if adequate replies are not received. Long forms of enquiries are not standard to the French Conveyancing process, however you must remember that unless you have lived in locality of the property for a considerable period the information which you have about it will be limited.

At the information gathering stage it is important to obtain a list of fixtures and fittings, which will be included with the sale of the property. Depending on the status of this moveable property as a fixture or fitting it may be possible to reduce the price being paid for the land and in consequence the stamp duty. What constitutes a Fixture or a Fitting in French law differs considerably from that of English Law. You need to be sure that all items which you understand are included in the sale actually are and completion of the form which we produce should ensure that this is the case.

Signing the purchase contract

Unlike in England and Wales, it is unusual for a Notary (French Property Lawyer) to draft the contract for sale unless the transaction is particularly complicated. Instead the contract is drafted by the estate agent normally in favour of the seller. The contract is the document where the parties agree the terms of the sale. If you need planning permission for the conversion works or if you have certain other requirements such as those set out above, then you will need to ensure that they are contained in the contract.

With this letter you will find a Property Purchase questionnaire, which is designed to establish your requirements when purchasing your property and which may need to be embodied in the contract for sale. It is therefore important for you to complete it and return it to us at the earliest opportunity.

We request that the contract is sent by the estate agent directly to us in order that we may check it and ensure that your requirements are being met. We then report you on the title to the property and with the replies to the enquiries which we have made above.

Different types of contract

As mentioned above there are 4 common types of property transaction in France. The contract which you will be asked to sign depends on the type of property, they are as follows:

•  House or Apartment: Compromis de vente

•  New Build Property: Contrat de Reservation or Contrat Preliminaire

•  Plot of Land (For development) Promesse de vente

It is possible to see a Promesse de Vente signed for the purchase of a property in category 1 above, but this less common.

Compromis de Vente

If category 1, applies to you then you will usually be required to sign a compromis de vente. Both buyer and seller usually sign the same document (unlike an exchange of contracts in the U.K) and it is then dated. The Compromis de Vente is the contact with the most similarity to the standard contract for the sale of a residential property in the U.K, although there are important differences which will be set out in the Report on Title sent to you prior to signing.

In England title to the property (or proof of ownership) is usually deduced prior to the signing of the contract, this is not the case in France. After the contract is signed the notary checks the title and carries out a number of enquiries before the transfer of the property takes place. If the seller's ownership of the property cannot be sufficiently proved then the sale will not go ahead and the deposit money will be refunded.

Similarly the searches and checks carried out to clarify such matters as whether any major development will affect the property are carried out after the contract has been signed. If the searches and enquiries reveal adverse information which would lead you to withdraw from the purchase then you may be able to do so although this will depend on the provisions of the French Civil Code and any additional protection you have given yourself when agreeing the terms of the contract before it was signed.

Contrat de Reservation/ Contrat Preliminaire

If you are purchasing a property off plan, then you will be required to sign a "Contrat de Reservation" or Contrat Preliminaire". Do not be mislead by the use of the word "reservation". By signing this type of agreement you are not agreeing to reserve the property, you are agreeing to purchase it and will be legally bound to proceed once it is signed.

The key point with regard to these types of development contract are that unlike in the U.K you will be required to make stage payments for the property. The usual stage payments are as follows:

35% on completion of the foundations

70% when the building is hors d'eau (weather proof)

95% On completion of the building works

100% on the date that the keys to the property are passed over.

Depending upon the building guarantee offered by the developer the legal title to the property will pass to you either at the outset of the transaction or once the foundations of the property have been built.

If you are purchasing the property with the aid of mortgage finance you should check with your lender that funds are available for the relevant stage payments during the construction transaction.

Promesse de Vente

This type of agreement is most common to the purchase of a development plot upon which you will arrange for the construction of a property to you own specifications.

The Promesse de Vente is more akin to an option agreement than a contract for purchase in that it will give the purchaser the right to have the property sold to him on the achievement of certain circumstances. A typical example is where the developer agrees to construct the roads and utilities which will serve an estate but where the owners of the individual plots will be responsible for the construction of their own house. The option to buy the plot arises on completion of the services but which allows the purchaser to withdraw if they choose to.

Between signing the contract and Completion of the purchase

As previously noted title to the property and searches of the Local Authorities are carried out after the contract has been signed. Once the contract has been deposited with the notaire and the deposit paid, he will begin to carry out this work. It is the stage that the conditions, which you have agreed to in the purchase agreement, will come into play. If you have stipulated that you need planning permission for a conversion then the notaire will wait for this to be obtained before completion can take place. If the property is an apartment, rather than a house then the notaire will make enquiries of the Management Company as to the current service charge accounts together will numerous other enquiries including whether major works are proposed to the property. If the information is adverse to your purchase it will once again be a question of what you have agreed in the contract as to whether you will be required to proceed or not. The French Civil Code offers purchasers more protection that in the U.K if adverse information is discovered but it is important to ensure that these laws are not waived in the contract and that the law offering you protection will specifically apply to your set of circumstances.

Completion of the purchase.

The notaires searches and enquiries usually take approximately 2-3 months from the date that you have signed your purchase agreement. If you are purchasing off plan then the balance of the purchase price will not be payable until the property is completed, even though the legal title will be transferred much earlier.

Once the transaction is ready to complete the notaire will provide a statement setting out the balance required to do so and request funds. If you have obtained a mortgage offer in order to purchase the property then he will also request the mortgage advance.

On the day of completion (i.e the transfer of the legal title) you will need to attend at the notaires' offices in order to sign the Acte Authentique which will transfer the property to you. The notaire will read out the contents of the Acte. This will include the details of the price being paid for the property and deal with any other matters, such if the property is being sold subject to any rights, such as rights of way. You will then be asked to sign the Acte and pay the purchase price the keys released to you.

If you are unable to attend the notaires offices or do not wish to do so, it is possible to arrange for a Power of Attorney (Procuration) to be signed at our office which will give the notaire the authority to sign the necessary documents on your behalf.

Other matters to be taken into consideration.

7 day right to rescind

If you are not purchasing your property in a professional capacity (e.g as a builder, developer, estate agent) and the purchase in not of a development plot then you will be able to rescind the contract for purchase even though you have signed it and paid the deposit 7 days after you have received notice from the notaire that he is in possession of the contract and the deposit.

The rules regarding this point are complicated and in order to benefit from this statutory protection you should read the Report on Title which you will be provided with very carefully. You will not be surprised to hear that there are strict formalities which will need to be obeyed if you should wish to take this course of action, failure to do so may invalidate your right to withdraw.

Mortgages

It is not uncommon in French property transactions for the purchaser to obtain their mortgage offer only after they have signed their purchase agreement. It is possible to specify in the contract that completion of the sale will only go ahead provided that a mortgage offer is obtained.

It is important to note that the contract will strictly limit the buyers right to rescind the contract on the basis of a failure to obtain a mortgage offer. The contract will have to state:

• The name of the Lender to whom you intend to apply

• The amount of the Loan

• The term of the loan

• The maximum interest rate you will accept

In addition you will have to apply for the mortgage within a certain time period from signing the contract and if the application is rejected then this will need to be sent to your notaire in within the timetable laid down in the contract. Non-observance of any of the points set out above would mean that you would be unable to rely on this provision.

Structuring the Transaction

Our conveyancing service does not extend to structuring the transaction which usually involves consideration of tax issues in both France and the UK. We deal with this at additional cost.

Inheritance provisions

French law operates in a different way to English law and the devolution of the property on death and the Inheritance Tax payable is usually different that payable on an English property. Our conveyancing service does not include this service but can be provided at extra cost.