There are two main legal stages involved in your sale, the first contract (ie: compromis de vente or promesse de vente) and the actual transfer of title, which takes place on signature of the Acte de Vente.
Like as purchasing a property in France, it is advisable to retain the services of a bilingual French lawyer in order to assist you in the process of selling you French property.
In addition, a French notaire must be instructed, as only such French notaire can draw up the deed of sale (acte de vente), which formally transfers legal ownership of your property to the buyer.
Marketing the property
You may sell your property alone as there are increasing numbers of direct marketing opportunities, through property journals, the Press, exhibitions and the internet. Notaires are also able to market and sell your property.
You may also use the services of a estate agent. However, care should be taken not to place undue reliance on the estate agent, who is not a legal adviser and may not always be able to explain the issues to you. Also, estate agents are highly regulated in France. So, make sure that the estate agent you are dealing with is properly registered (as an "agent immobilier" in France) and is holding a “carte professionnelle” (professional card registered).
French Agents usually charge commission on a percentage basis (between to 5 to 10% of the sale price). The contract signed with the estate agent is called the “mandat”. This agreement will specify whether the commission is payable by you, your buyer or split, the minimum acceptable price, if the agent is granted exclusive right (mandat exclusif) in which case , you will be liable to pay the agreed commission even if you sell your property without the Agent’s help, whether directly or through another agent, etc.
Please make sure that the mandat does not include a power for the Agent to sign a contract on your behalf at that price. Check also the term and the cancellation provisions (otherwise the mandate may automatically be renewed which can be a problem especially if you have granted the agent an exclusive right). As such, do not hesitate to request the assistance of a French lawyer before signing any agreement with an estate agent.
After marketing the property, if you receive an offer from a buyer, in whatever form (verbal or written), then strictly speaking, a binding contract arises between you and the buyer if you accept it. As such, a written “offre d’achat” from the buyer can be enforced if such document has been accepted by you in writing.
Once the formal pre-contract (ie: compromis de vente or promesse de vente) is signed, the seller has a seven day cooling off period. Please note that this is not available to the seller, who is bound by the terms of the contract, upon the signature.
The law strictly forbids the seller asking for a deposit prior to formal signing of the written contract. So if you accept an offer, you are not permitted to then ask for any kind of deposit. This must only take place when the formal contract is signed.
So, when the formal contract has been signed by the buyer, the said deposit, normally 10% of the purchase price, is payable. This is deposited with the notaire or the estate agent if so authorised. The deposit is a part payment of the purchase price if the contract is completed, but may be forfeited if your buyer withdraws from the contract. The contract will usually contain conditions, such as the availability of finance to the buyer; if these conditions are not fulfilled the deposit is refundable. You must usually pay the buyer the same amount in damages (as well as refunding the deposit) if you withdraw from the contract. If you want to forfeit the deposit but your buyer disputes your claim, the notaire will not release the deposit unless you have settled the matter amicably with your buyer or the French courts have determined the matter.
In practice, a buyer’s failure to complete may lead to extended negotiations before a deposit can be forfeited, often through the intervention of an avocat for either party.
Your obligations as a seller
With accordance to the French law (French civil code), as a seller, you have mainly three main obligations:
- The obligation to deliver what has been agreed to be sold: you must ensure that your property will correspond to its description and other details specified in the sale contract.
- To ensure that the buyer enjoys quiet possession, free from any claims by third parties. You must for example be able to ensure that all registered charges are cancelled by producing vacating receipts and certificates of cancellation. You have also a duty to inform your buyer about your property, about easements and any charges affecting it and you must produce evidence of a thirty-year title. You must be able to ensure freedom from eviction, roughly the right for peaceful possession free from any claim by any third party.
- A liability to undisclose hidden defects. According to the French Code Civil, you are not liable for apparent defects, which your buyer could discover for himself. However, you are liable for latent defects (vices cachés) which render your property unfit for their intended use or which so substantially diminish such use that your buyer would not have bought your property, or would have paid a lower price, had he known of them.
The sale process
As part of the sale process the seller is required to arrange for a number of surveys and reports to be prepared on the property. These surveys are called the Dossier de Diagnostic Technique (DDT). When completed, they are attached to the sale and purchase agreement.
It is imperative these surveys are carried out, failing which the buyer can later withdraw from the sale, or can seek a lower purchase price. Make sure that surveyor has an accreditation from a Comité d’accreditation français (COFRAC).
Fixtures and fittings
You and your buyer must be clear about which items are included in the sale. If any items of furniture are to be included, an inventory signed by all parties should be attached to the contract, and their value included in the sale. Since the value of furniture, if declared in the contract, can work to reduce your capital gains tax and the buyer’s stamp duty liability, then an itemised inventory is required with a price put to each item as this may be scrutinised by the tax authorities.
Once the sale and purchase agreement has been signed, then the notaire will carry out the usual searches in connection with title to the property. This process normally takes around two months.
It includes consultation with the local council and national land agency, both of whom may have a right of pre-emption to buy the property. Sitting tenants also have a right of first refusal on the sale, but only on the same terms as the purchaser.
Once the notaire has completed the searches and other preparatory work, you will be able to complete.
The notaire is personally liable for the registration taxes and the buyer (invariably) must pay these, together with his costs and the purchase price, before completion.
Just as when you purchased your property you may have had to attend at the notaire’s office to sign the acte de vente, so signature in person is required on a sale. If you are unable to travel to France to sign the acte de vente, then you will need to give a power of attorney (procuration) to someone to sign before the notaire on your behalf. This power of attorney will need to be legalised by having an Apostille. This will enable the document signed abroad to have full effect in France.