Compromis de Vente Q&A

Annie Digby offers advice regarding the ‘compromis de vente‘ sale contract…

Unlike in the UK, the ‘compromis de vente‘ or preliminary sale contract in a French property transaction is signed early on and while this binds both parties, the sale is not guaranteed until a few formalities have been dealt with.

If you are a buyer, the estate agent or the notaire (depending on who drafted the compromis) will send you a letter advising you of your 10-day cooling- off period. This period starts from the day after you receive a copy of the signed compromis by registered post, by hand or by secure email. If you want to proceed with your purchase, you do not need to do anything but if you wish to exercise your right to withdraw from the transaction for whatever reason, you must let the agent and/or the notaire know of your decision by sending them a letter by registered post or similar means before the 10-day period expires. If you have paid a deposit, it will be returned to you.

If you buy an apartment, your cooling-off period will not start until you receive not only a copy of the signed compromis but also a copy of all documents relating to the building of which the property forms part (copropriété). This includes the minutes of the last three annual general meetings, the condominium regulations, the maintenance logbook, and the pré-état daté (a document issued by the managing agent giving information on service charges, costs of works, etc).

Your ‘cooling off’ period will not start until you receive all these. Once the purchaser’s cooling-off period has expired, the transaction is binding for both parties but there is still no guarantee that the sale will proceed to completion.

Indeed, it is subject to a number of conditions precedent which must be fulfilled by a certain date before completion can take place. Once all conditions precedent are met, any potential restrictions preventing the completion of the sale are removed. Therefore, if a purchaser fails to complete at that stage of the transaction, they are liable for the payment of a sum amounting to 10% of the sale price to the buyer. The seller may also claim damages for breach of contract.

In view of the above, it is important to understand that although the transaction is binding once it has been signed, completion is not guaranteed until the buyer’s cooling-off period has lapsed and all conditions precedent have been met. Until then, a seller cannot be certain that they have sold their property.

These include standard conditions, for example, that there must be no adverse planning restrictions and no easements (e.g. rights of way) affecting the property or reducing its value, or that there must be no existing charges (such as mortgages) of a value exceeding the sale price, and no pre-emption rights being exercised by either the local authority or SAFER (an organisation protecting certain parts of rural France).

Additional conditions precedent may be added to protect the purchaser’s position and they will vary from one transaction to the other.

For example, if the purchaser intends to apply for a mortgage, the compromis will be subject to the condition precedent that they must obtain a mortgage, the details of which must be clearly set out in the contract.

If a purchaser intends to carry out building works to the property, and those works are subject to either full planning permission (permis de construire) or other consent such as déclaration de travaux, it is advisable to add a condition stating that the purchaser must obtain the relevant consent prior to completion.

If the seller is not prepared to wait for such consent to be obtained, it is advisable to insert a condition stating that the purchaser must obtain a certificat d’urbanisme opérationnel positif, i.e. a certificate issued by the local mairie indicating that, in principle, the proposed works will be possible. This does not equate to full planning consent and therefore, post-completion, the purchaser must apply for the proper consent but should be confident that, provided the works comply with the relevant planning regulations, planning consent will be granted.

If the surveys attached to the compromis refer to defects and both parties have agreed that the seller must remedy them prior to the completion of the transaction at his own costs, this should be inserted as a condition precedent in order to avoid any uncertainty.

It is also advisable to add a condition precedent if the seller has carried out structural works such as an extension or swimming pool less than 10 years before the sale, but no planning permission and no compliance certificate were issued by the local planning department. The compromis should state that the seller must obtain retrospective consent or provide documentary evidence that the works were completed in accordance with planning regulations, failing which any risks associated with a lack of consent pass to the purchaser.

As mentioned above, non- standard conditions precedent will vary with each transaction. If in any doubt, advice from an independent legal adviser is highly recommended as the notaire dealing with the transaction is under no duty to suggest conditions that may be beneficial to a purchaser.

Annie Digby is a retired solicitor who now works as an independent legal adviser specialising in French property guellec-digby.co.uk

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