Legal Guide To Buying Property In France

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In France the process of buying a house is a little different to that in the UK. In addition the process is different depending upon whether the property is new or old.

Old Property Purchase Guide

Upon agreeing to buy a property you sign a 'compromis de vente', an agreement to purchase that is legally binding. Many of these provided by estate Agents are standard formats however they are often amended by hand and it is important that you know what you are signing. In England people are used to making offers and agreeing to buy long before the final legal commitment, in France this is not the case.

To assist we would suggest faxing the 'compromis de vente' to a UK solicitor who is a specialist in French property matters and who speaks the language well. We would recommend John Howell and Co. and you may request a quotation for their services though ourselves. An French speaking English solicitor does not replace the services of a Notaire, the legal officer in France who carries out the conveyancing, but they do provide excellent peace of mind and will watch out for your interests.

Often a French Estate Agent will specify a Notaire to carry out the legal conveyancing on the purchase. It is quite possible, however, to request a different Notaire to act on your behalf and the two Notaires will split the fees between them.

The legal costs of purchase of an older house (including the French equivalent of Stamp Duty) will add about 8-10% onto the purchase cost. This is reduced to 3-5% for new properties. This cost cannot usually be mortgaged so it is required in cash from the buyer on top of the mortgage deposit. In addition many people would like the comfort of a UK based, French speaking expert lawyer to assist in the process. Whilst not strictly necessary it can save unnecessary worry and will sometimes ensure an expensive mistake is not made whilst completing the purchase. This service will cost between £1500 and £2000 and we recommend John Howell and Co.

New Property Purchase Guide

When you see a development and a particular new property that you like it is important to act quickly. Some developments sell quickly, particularly leasebacks so to get the property of your choice you need to follow the French system. Some developers will give you a verbal option for a few days against a property, others won’t, particularly if the development is near the end of its sales, however a verbal option isn’t worth the paper it is not written on !

Really for safety you should sign a reservation contract as soon as possible to ensure the property is taken off the market. All of the French buyers do this and it takes a little time for foreigners to understand the strong consumer law that protects purchasers of property in France. A reservation contract that you sign is sent to the builder for signing and will come back to you by registered post in a few weeks. Upon receipt you have a 7 day cooling off period during which you can change your mind about the purchase.

In addition, every reservation contract has a ‘mortgage clause’ so that if you cannot obtain the mortgage that you have stated you will apply for on the form then the contract is null and void and your deposit is returned.

Finally from two to several months after signing the reservation contract the Acte de Vente is signed and the property is yours – even though the development is probably only up to foundations stage or so. This is standard practice in France.

The deposit (typically 5%) is normally paid at the same time as signing the reservation contract, however you never pay the builder direct, always the legal Notaire who puts the money in a safe Escrow account.

When the Acte de Vente is signed the second payment is normally due – typically a further 25% paid to the Notaire. If a mortgage has been arranged with a lower deposit than 30% then the bank will pay part of this second payment.

Further stage payments are made to the Notaire over the build cycle of the property and these are normally met by the bank. Interest is due on the increasing bank borrowings over this period but this is easily offset usually by the property value increase in this period.

What legal advice do I need ?

There are 3 choices you can make about seeking legal advice when purchasing.

1. Take no paid-for advice and use the same Notaire as the builder or the one appointed by the seller of an old property to transact the sale. Total legal costs (inc. stamp duty etc) will be around 3-5% for new properties and 8-10% for an old property.

2. Appoint your own Notaire to act just for yourself. They will share the fees under French Law with the sellers Notaire so there is no extra cost to yourself. We can suggest English speaking Notaires in France. Total legal costs will be around 3-5% for new properties and 8-10% for an old property.

3. Appoint a UK specialist overseas property lawyer for full advice. We can recommend legal specialists based in the UK and Ireland – costs will be around 1.5% of the property price for a leaseback purchase and 1% for a normal new or old property. Total legal costs (including the French Notaire costs) will be around 4-6% for new properties and 9-11% for an old property.

Buying Through A Company

It is quite possible to buy a property easily and cheaply through a special type of french property company called an SCI. For legal and inheritance law reasons it is recommended to review this option - please read our guide to buying a french property through an SCI.