It’s very easy to buy a property in France – even without meaning to. Utter the words, “I’ll take it,” to the seller and under French law you have technically entered into a legally binding contract. In practice, it’s extremely unlikely a vendor will pursue you through the courts until you honour your promise, but it’s a good example of just how different French property laws are from those in the UK. Let’s go through some of the things you need to know.
Finding your perfect property
The options are much the same as in the UK: estate agents, auctions or direct private sales. Make sure any estate agent (un agent immobilier) is a member of a proper professional body by looking out for the acronyms FNAIM, SNPI, UNIS or CNAB.
Before you start, you need to be clear about how you will own your property. There are three common ownership methods in France: en indivision, en tontine or through a Société Civile Immobilière (SCI).
If you are buying with someone else (e.g. your partner), you must buy on a joint basis to protect the interests of both parties. You will need to decide between owning en indivision or en tontine:
- En tontine is like the default ‘joint tenants’ ownership in the UK. You own equal shares and if one of you dies, the other becomes the sole owner. You can not add a tontine clause after purchase, so it needs to be done up front
- En indivision is the equivalent of ‘tenants in common’ in the UK. The ownership ratio can be anything you choose, and if one of you dies, their share of the property can be left to whoever they like in their will
This is a simplified description of the options. You will need to discuss with your solicitor the best option for your own circumstances.
You may hear talk of owning property through a vehicle called a Société Civile Immobilière. This is a company set up for the express purpose of owning and managing a property. There are several reasons why people do this – for example, to circumvent French inheritance laws or to secure certain tax advantages – but the benefits are gradually being eroded and this is now a less common form of property ownership.
Owning a property jointly can raise issues around inheritance, especially if there are children involved: under French inheritance laws you are obliged to leave your children a set proportion of your assets. You cannot leave all your assets to your spouse. Either way, you should seek advice and write wills that are appropriate to the ownership method you’ve chosen and your own situation.
Agreeing to buy
Once you’ve found your dream property and agreed a price, the next stage is generally the actual contract. Unlike the UK, there is no ‘sold, subject to contract’ agreement. Sometimes the estate agent or seller may ask you to make a formal written offer (offre d’achat) but this would technically constitute a contract to buy, so be cautious.
The process of putting together the contract is the job of the notaire – self-employed legal officers appointed by the state. The notaire is bound to uphold the law rather than the interests of his or her client and so generally acts for both the buyer and the seller. To Brits, this can feel odd and if you’re not comfortable you are entitled to appoint another notaire to handle things from your side. The two notaires will split the fee, so there’s no additional cost involved.
The first contract document is the Compromis de Vente which sets out the main terms of the agreement. On signing this, the buyer is normally required to pay a 10% deposit which is held by the notaire. Once this is signed, you are committed to the deal save for two instances:
- You as the buyer have a 10-day cooling off period during which you can withdraw from the sale without penalty (the seller does not have this option and is now committed to selling to you)
- If any conditional clauses (clauses suspensives) you’ve had written into the contract are not met, you can pull out of the sale, so it’s really important that you think these through and ensure the notaire incorporates them
For example, you may want to make the sale conditional upon:
The Compromis will specify a date when you will be expected to sign the main contract, the Acte Authentique. Once this is signed, the property is yours.
Surveys and searches
The seller is obliged to commission a number of professional surveys as part of the sale process. These are collectively known as the Dossier de Diagnostic Technique (DDT).
There are nine reports, although some are required only in certain regions or for properties over a certain age: asbestos, lead, termites, energy efficiency, natural or industrial risks, gas installations, electrical wiring, septic tanks, radon.
Notably absent from the list is the building survey of the kind that we are most familiar with in the UK. If you want a full structural survey, you’ll have to commission it and pay for it yourself. Ideally, you would ensure that the contract allows for you to pull out if the result of the survey is unsatisfactory, but this is unlikely to be acceptable to the seller or the notaire so you’re better off conducting a survey before signing the sale agreement. Because there is no tradition of building surveys in France, finding someone to carry it out may not be as simple as you’d imagine. One option is to find a surveyor in France who is regulated by the Royal Institution of Chartered Surveyors (RICS). Try searching the internet for websites such as ricsfirms.com which lists RICS chartered surveyors in France.
Note also that local searches don’t reveal as much information about the property as a Local Authority search does in the UK. Consider making your own enquiries about the property and any nearby development plans.
The cost of buying a property
This can be hard to pin down in general terms.
The estate agent fees are likely to be between 4% and 10% of the purchase price, but the price quoted by an estate will usually include these – look for the letters FAI. Sometimes the notaire’s fees are also included.
The notaire’s fees, taxes and disbursements (all handled by the notaire) work out at between 5% and 10% of the purchase price for an older property. A new property will cost around 2% in fees but with 20% VAT on top.
It’s all quite bewildering. Thankfully, the Chambre des Notaires de Paris has a handy online calculator to help you estimate the total costs.