Rights of Children in Sale of French Property

Inheritance law case study – October 2009

[Note from the Editor: there are significant changes to inheritance EU law applicable in 2015]

“My wife died recently. We jointly owned a property in France where we intended to live when we retired. I have now decided to sell the house. However, my Notaire has informed me that because our children are under 18, I cannot sell the property unless the sale is authorised by a UK Court. Is this true? What do I do next?”

Unfortunately, this enquiry is far from unique and regularly arises in situations where married couples have acquired a property in France, owned it for many years and have perhaps overlooked the consequences of not reviewing the ownership structure to reflect their changing circumstances.

In this case, the property had been owned for more than 20 years and it had been purchased several years before the couple had children, who were now in their early teens. When the property was purchased the couple agreed that they would hold it jointly en indivision (which is broadly equivalent to a tenancy in common in English law).

The wife had died at a reasonably young age, but after a lengthy illness. Although great planning had been given by the husband and wife to restructuring their financial affairs in the UK, the structure of their ownership of the French property had been overlooked when doing this.

As a result, although a buyer had agreed to purchase the property, the proposed sale could not complete smoothly. Under English Law, and the Law of Property Act 1925, in particular, a minor child may not automatically inherit a property upon death. All the real and personal assets of the deceased are vested in personal representatives. However, the rights and powers of the personal representatives are limited and do not extend to the disposal of the deceased’s assets. As a result, neither the surviving parent, nor the personal representatives or the Executor have the power to sell an immoveable asset vested in a minor child.

In this case, the Notaire handling the deceased’s estate and the sale of the property had applied for an order to the Juge des Tutelles (the judge who in France administers the affairs of minor children and the incapacitated). However, the Juge refused the application, as he first required an order from the English Courts to authorise the seller to sell the property in France on behalf of his children.

The petition procedure involved a member of our French Property Department being appointed as a litigation friend to represent the children’s best interests.

With the technical support of our Litigation Department and the Notaire in France, Kingsfords acted as legal advisers on both French and English legal issues. Particulars of the Claim were prepared and proceedings were commenced requesting a Chancery Division Judge to issue an Order authorising the sale of the property in France by our client on behalf of his children.

Our involvement included instructing a Chancery Barrister to make submissions to the Court, producing a statement for the Court regarding relevant French legal rules and procedures (and in particular the effects of the French rule, known as la réserve héréditaire, namely the effects of the rule whereby children automatically inherit all or part of their parents’ French property), explaining that the proposed sale was in the children’s best interests and confirming the appropriate financial investments structures which would be created to invest the proceeds of sale on the children’s behalf. A valuation report of the property was also submitted. This confirmed that the sale price was fair and reasonable, having regard to market conditions at the time of the sale.

Following the hearing of the evidence, the Order was made. This was then translated into French and we prepared further evidence for the Juge des Tutelles back in the French courts, to explain the legal process which had been followed in the UK. The application was then approved and the Notaire was able to complete the sale of the property. The sale was completed within 4 months of our being instructed.

Conclusion

In this (and indeed, in a number of similar cases) we were able to achieve a successful outcome by providing proactive assistance to our client by making the necessary applications to the courts to complete the sale of the property with minimal disruption to the completion timetable.

However, we recognise that it is always preferable to avoid unforeseen and potentially complex technical issues arising, particularly when in most cases, they could be avoided, or at the very least anticipated.

However, no two cases are the same. We therefore strongly recommend that all married couples, particularly those who are planning on buying a property in France and in particular, those who have subsequently had children since purchasing a property in France, review their personal circumstances and, as part of this, consider the way in which they intend to have structured the ownership of their property.

If this situation strikes a chord with you, or you are already involved in a similar situation, please contact the French Property Department at Kingsfords Solicitors for advice on 01233 62 45 45.

Marie Antoinette Bassini
French Property Department
Kingsfords LLP
SRA 621166