A Guide To The French Property Buying Process

Matthew Cameron reviews the key points of a French property purchase, from searches and mortgages to completion and inheritance…

After all those years of travelling through France and all those well-read magazines on the coffee table, you have finally identified where you are going to buy your new home. In France. Yet you will have learnt from the articles that you need to take care to avoid the multitude of traps that await the unwary. Hopefully, a few tips and pointers will help you skirt around those pitfalls.

First of all, good property agents will talk to you not only about a specific house, but also about the location in general. It is vital to know as much as you can about both: the mention of travelling around France in the previous paragraph was intended to stress the importance of this. And as many areas are subject to seasonal changes (in the weather, number of visitors, number of businesses open…) It is good to visit at different times of the year.

In addition, you should understand what development plans there may be in an area. A new TGV rail line being planned may be great news for access, but presumably less attractive if it will pass a few metres from your property. Enquiries can be made of the local authority for such matters and solicitors can help here.

Reports and Defects

As part of the sale process, the seller has to organise some inspection reports. It is worth understanding their content in detail (your solicitor can help). They do not, though, constitute the equivalent of an independent structural survey. While adding more cost to the process, a structural survey should offer peace of mind. If you commission one, the best advice is for this to take place before the contract is signed.

Under French contract law, all parties must be clear about all matters relating to the transaction and act in good faith. This means that a seller must declare any defect of which they are aware, and which may have a determining influence on the buyer’s decision to proceed.

Similarly, the buyer should declare in advance any points of particular importance. In this respect, if you need a mortgage offer to finance the purchase, this should be declared from the very outset. The need for mortgage finance is a common basis for an extra condition in the purchase contract. In France, a mortgage lender needs to see the signed contract as part of its lending assessment process.

The buyer declares in the contract how much they need to borrow, and other relevant criteria, such as the maximum interest rate they would be prepared to pay and length of the mortgage term. If they can’t source suitable funding, then they are generally entitled to withdraw from the purchase without penalty.

Most buyers will have obtained some sort of reassurance from a French lender or mortgage broker for the amount they can borrow in advance of actually finding a property. This is an important step for buyers who do need bank finance. It is certainly the case that mortgage funding is a little harder to secure from French banks than it may have been just a few years ago and sellers may be sceptical about agreeing to sell to a buyer who requires finance. So, a confirmation of the amount you can borrow should come as reassurance to them.

Solicitors with an expertise in French law can help with enquiries about the property, for example, by discussing any development plans. If you need to carry out work to the property, that may mean you should consider looking to negotiate a condition in the contract to allow for this. Would you still want to buy the house if you couldn’t convert the barn into a gite or create two new bedrooms in the attic space, for instance?

Where such intentions are fundamental to your enjoyment of the property then your solicitor will be able to explain the different conditions that might be suitable for you and look to negotiate the inclusion of applicable clauses, Of course, a seller might not accept the addition of extra conditions in the contract.

Contracts…

It is worthwhile noting that while a notaire will often draft the first contract, this is not necessarily the case. Many agents are happy to draft their own contracts-and some have professional contract-drafting teams. Whether drafted by agent or notaire, the contract will need to be in French. While contracts may have English translations, these are often general and will be declared as being for information purposes only and not contractually binding. Hence, when we are instructed to review a contract, we will only consider the French version.

The involvement of a notaire is obligatory. Advice from a firm of solicitors is not imperative, but should be helpful. As their roles are slightly different, the two professions should be able to work together rather than in conflict. The notaire‘s fees and all stamp duty and registration charges are payable by the buyer. Yet the notaire‘s role is usually not to represent either buyer or seller, rather to ensure the transaction completes and is correctly registered at the local land registry, with all taxes paid. The solicitor’s role is to act in your best interest, not just that the transaction is finalised come what may.

Once the parties have signed the contract, the buyer is entitled to a 10-day cooling-off period, during which they can withdraw without penalty, and without having to give a reason. This offers protection for the buyer, allowing them the chance to reflect on the purchase to ensure they are comfortable with it.

Presuming you do not decide to cancel the transaction, the notaire will test the various contract conditions and carry out the pre-completion searches. These will include matters such as enquiring whether any charges are registered against the property that would need to be cleared upon sale, or checking with the local authority if any restrictions may negatively impact on ownership.

Once these searches are done, the notaire can organise completion. You can be represented at the meeting via a power of attorney, but it is preferable to attend if you can- especially as you can then collect the keys and move in.

Inheritance planning

The only other point that would require clarification in advance of completion relates to the implications of French inheritance law and tax, the importance of which should not be underestimated.

Many buyers will be aware that in accordance with the terms of the EU Succession Regulation, it is possible to elect to apply the inheritance laws of one’s nationality to assets owned in another jurisdiction, Do not, however, presume that your existing English (or other) will, for example, would be sufficient. It is important to ensure that your existing will is suitable; it may be preferable to update this, to replace it with a French will, or to have both English (or other) and French wills.

Everyone’s personal situation will be slightly different, so expert cross-border advice is important, only to take account of a person’s wishes in relation to their estate, but also to the implications of inheritance tax, which can present some surprising consequences. While in many cases the ability for a non-French person to apply the law of their nationality to their estate in France can be beneficial, it may well be that allowing French law to apply is also perfectly suitable.

Despite the economic, geopolitical and health issues of the past few years, there is still a huge interest in buying a property in France, whether a holiday or permanent home or investment. These overriding concerns make it even more important to ensure you investigate the transaction thoroughly. Solicitors with an expertise in both French law and the related UK (or other) inheritance law and tax matters should be of great assistance.

Matthew Cameron heads the French legal team at Heslop & Platt and Ashtons Legal heslop-platt.co.uk

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