LEGAL DOCUMENTATION - CONTRACTS
The Notaire is a public officer, titled by the state to prepare and execute contracts. They serve to advise with regards to legal status. They earn their fees through a set scale of administrative charges pertaining to the contracts that they execute. They are responsible for all searches performed on the property before completion and are accountable to the authorities for payment of registration fees, and capital gains liability that may be incurred through the transactions. The purchaser is guaranteed clear title of ownership.
An administrative document itemising details pertaining to the value, position, position and usage of land. It is used to establish the rates payable. Each commune is responsible for establishing and updating the plan cadastre which is a summary table and map detailing the matrices.
Below is a synopsis of a formula similar to that which we often use.
Contracts do vary and one should verify carefully the contents of every contract before signing. The details below are intended to give a better understanding of the process and do not reflect an actual contract.
The contract sets out the details of the sale, starting with the identity of the seller including marital status, place and date, birth details and passport numbers.
The equivalent details are then given for the purchaser.
The details of the property are then laid out giving a basic description and the cadastral references listing each parcel of land, its surface area and its designation. This is usually accompanied by a "plan cadastre" which maps out the boundaries of each parcel.
Surveys must be conducted prior to the signature of the initial contract for the following issues:
A report is also required outlining the risk areas within which the property is situated. This covers areas at risk of flooding, seismic activity, tornados, avalanche, landslides, etc. The categorisation is very broad however and one needs to make further enquiries once one has seen this report in order to establish whether independent houses are at risk.
The contract will usually contain the following clauses:
This clause gives details of the previous sale through which the sellers became proprietors.
A clause stating that the purchaser takes ownership and full possession on the day of the act.
The purchaser buys the property "as is", ie in its current condition. The onus is on the purchaser to have visited the property and verified its condition. (Ironically it is less common in France to conduct surveys, although this practice is now on the increase.)
The purchaser accepts existing rights of way. These remain with the property after transfer of ownership. They will be mentioned in the document. (Should there be any new rights of way created by the existing owner these are subject to a later conditional clause.)
The purchaser takes responsibility for all taxes, contributions and charges, and assumes responsibility for the insurance cover, as from the day of transfer.
The seller declares that to their knowledge there is no risk nor history of poisoning from lead in the area or of any other poisonous material.
The agreed price is declared, and the purchaser agrees to pay this sum on the day of the act of sale.
The intervention of the Agency involved in the negotiation is specified and the amount of the commission.
Details pertaining to the financing of the sale and the mortgage should one be required.
These take numerous forms but some of the more common are listed below. Should a clause not be met the purchaser has the right to retract from the sale and their deposit is refunded.
a) In the interest of the purchaser
b) In the interest of the seller
Once this payment has been made and both parties have signed the act, the property becomes the possession of the purchaser.
This clause stipulates that the sale must be completed
Should the terms not be met, the clauses which relate to the ceding of the deposit will take effect.
a) On realisation of the sale, the deposit will be deducted from the total sum due.
b) Should any of the suspensive clauses not be met, the deposit will immediately be refunded to the purchaser.
c) Should the suspensive clauses all be met and should the act not transpire due to the fault of the purchaser, the deposit will be paid to the seller, the sale declared null and void and each party are free to go their own way.
If one party or the other default they are given 15 days to rectify the situation. If the seller refuses to sign, for whatever reason, he must pay an amount equivalent to that of the deposit by the end of the month which follows the due date. The purchaser may pursue the sale regardless in court, but once he cashes the penalty the sum is declared null and void.
The address used for all legal documetation. This is usually the physical address of the notaires office.
The seller ensures that there is no mortgage on the property, should this be the case.
The seller declares his residence for fiscal purposes
The purchaser may take an optional insurance to cover a portion of the sale price in the event of their death prior to signature, and nominate the beneficiary.
Both parties vouch for the fact that the price declared is the true price. (The sale price should never be under declared. The temptation to save a relatively small sum in fees is counterbalanced by stringent penalties for breaking the law, the likelihood of incurring higher capital gains taxes down the line, limitations in raising finance and risks of losing the sum paid outright without acquiring the property.)
The name of the notaire is reiterated, and the parties agree that the sale can go ahead under the conditions and the price stipulated. In the case of a dispute a legal tribunal will decide.
The purchaser has the right to withdraw from the contract for a period of 7 days after acknowledging receipt of a copy of the contract.
Note : All information on these pages are set out and intended as a guideline only and should be verified with a notaire, advocate or lawyer should you wish to take any firm advice relating to any legal matter
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