Dream Properties Dordogne

The house purchase proceeds in two steps. The first step is to sign a first contract that binds both parties and takes the house off the market. The second step (the Completion, in English terms) is the “Acte de Vente” that occurs once the notaire has made all the required searches and he is sure that he can assign the purchaser good title to the property.

The first contract is commonly drawn up by the Agent Immobilier – the registered French house agent for the sale. This agent should be regulated and bonded by the French government. Alternately the notaire himself may prepare the first contract - this happens usually when the transaction is more complicated – purchasing a property with a lake and fishing rights is probably a good example.

The first contract is either known as a "Sous Seing Privé" or "Compromis de Vente". In most instances the document is simply referred to as a “compromis”. This document is binding and it is important to understand the content before you sign it. Our guide to the purchase agreement and the translated sample document available from this web site should help you understand the content and to ensure that it is properly drawn up.

Dream Properties Dordogne agents use a Compromis that has been drafted with the help of a Notaire and which is accepted as an excellent contract by all the local Notaires.  Dream Properties supply you with an approximate translation and help with understanding any difficult sections. Only a qualified legal translator can supply a translation that will hold in court.

This is when you will also find out from whom you are buying. This can be a surprise - The writer recently purchased a small plot of land adjacent to their farm from it’s five owners for the princely sum of £100. This is not untypical, and you will quickly understand why, when you take a look at our section on French property law as it applies to inheritance. Not all the current owners of the property have to personally sign the purchase agreement as they may have arranged a “power of attorney” for one of them to act for them all at this early point in the proceedings.

You will be asked to pay a deposit of 10% of the house purchase price within seven days of the signing of the purchase agreement. Sometimes the amount can be varied by agreement.  This is normally paid to the Notaire who will be dealing with the transfer of ownership. In some instances this deposit is held by the French estate agent. If you are asked to make your deposit with the agent then first ask why. If you are satisfied with the reasons then check that the agent is bonded by one of the relevant French organisations before parting with your money. In no case should the deposit be paid - ever - to the vendor!

If, after your seven days of reflection,  you do not proceed with the purchase then your deposit can be forfeit. When the sale is terminated because of one of the reasons clearly identified in the Compromis (such as an inability to obtain a planning consent) you get your full deposit back.  Otherwise your deposit will be passed to the vendor in compensation. However, if the sale is terminated without due cause by the vendor then your deposit will be returned to you and (in theory at least) the vendor owes you the equivalent amount in compensation to you.

What to look for in the agreement

Make sure that the property is clearly identified and can’t be confused with another property. A minor point but with French postal addresses being pretty vague at best, it is possible that this vital part of the agreement is ambiguous. Make sure it is not.

Should any fixtures, fittings or artifacts seen at the property be included in the purchase agreement. When the writer purchased his farm the buildings and contents were “as seen” (and photographed) with the exception of a list prepared by the vendor of specific items not included in the sale or available as “optional extras” outside of the property sale.

Accompanying the First contract you should be given the experts reports on lead content in paintwork, asbestos, termites (only in designated area including Dordogne), thermal qualities of the building and on the electrical and gas installations in the property. Please note that these do not confer any obligation on either the buyer or seller - they are simply to inform the buyer.

Make sure that the instructions being sent to the notaire make the status of your new home clear. Is this a second home or is it going to be your primary place of residence? It gets the situation clear from the start and just as in the UK the capital gains tax implications of a second home need to be understood. Please see our section on French taxation for more information on this subject.

Standard Clauses that protect the purchaser

There are a number of standard clauses that can terminate the contract without the loss of your deposit.

If the property comprises more than 5000m² of land then The Société d'Amenagément Foncier et d'Establissement Rural (SAFER) has the right to preempt the purchase of land if it preserves it as agricultural land and if there is a buyer for the whole property at the same or a higher price. It is very rare that SAFER acts to preempt a sale – you will just have to put up with the set delay while they decide if you are buying a large property.

The local community within which your new home lies also has the right to preempt the purchase. This is not common, but does occur from time to time when the "Mairie" decides that they need a particular building or piece of land for the benefit of the commune. In either case you lose nothing as your deposit is returned in full by the Notaire.

Another standard clause is one regarding public or private development plans that might affect the value and your enjoyment of the property you expect to purchase. The notaire will search for details of any planned new roads, railway lines or other substantial project that might impact upon the property you are purchasing. Similarly if the notaire discovers any rights of way not already declared to you then you can withdraw with impunity.

If you are going to need a French mortgage to raise the full property price then the purchase agreement should include a clause or two to reflect this. The agreement should be subject to your obtaining a mortgage at a rate less than or equal to an agreed rate. It will also probably require you (the purchaser) to apply for the required mortgage with all speed and may specify the need to provide documentary evidence that you have done so within a set time period. This covers you in the event that you are unable to arrange a mortgage as well as assuring the vendor that you will make timely and effective efforts to arrange one.

If you are not planning on taking out a mortgage then the agreement may well include a section where you attest that the purchase will be made from your own resources.

The vendor may want to add a clause to the agreement as well. If the house has gas central heating using a large GPL (Gas Petrolium Liquide - LPG in English) tank then it would be normal to agree to transfer any related rental and service agreements along with the property.

Should any party to the contract unfortunately die before the completion then the heirs of the affected individual have the right to back out of the sale/purchase without the loss of any deposit or (at their option) they may proceed with the contract.