offer and contract notaires searches completion fees annual expenditure insurance services French bank account French law considerations leaseback professional advisers glossary			French law does not recognise the concept of subject to contract and therefore an offer to purchase a property should not be made unless you are absolutely certain that you wish to purchase. You should consider before the offer is made all the conditions that you wish to include in the contract. The next step is to sign either a Promesse de Vente or a Compromis de Vente. This may be prepared either by the Notaire or the agent. Contracts are signed early on in France and contain "Conditions Suspensives". These are conditions which must be satisfied before completion can take place and make the contract conditional. Until the conditions have been fulfilled, completion of the contract is uncertain. If any of the Conditions Suspensives are not satisfied, the contract is deemed to be null and void and the Purchaser is entitled to the return of his deposit. These conditions are important and need to be checked carefully, in particular the contract may need to be amended to take into account the fact that a mortgage is needed to finance the purchase. This clause cannot be added at a later date. Remember, the drafting of the contract is very important and a pre-printed form can never replace professional advice. The consequences are too serious not to ensure that advice is taken before signing the contract. French contracts are also usually conditional upon rights of pre-emption not being exercised. French law gives certain parties the right to buy in place of the purchaser. If the right is exercised the deposit will be returned to the purchaser. Since June 2001, the purchaser of a residential property is given a seven days cooling off period (Loi SRU) during which he can withdraw from the contract without penalties. However experience has shown that whilst it gives more confidence to the purchaser to sign in haste it makes it more difficult afterwards to renegotiate essentials terms of the contract.

			The notary or notaire is the French lawyer who deals with property transactions. In many cases, the name of the Vendor's notaire is inserted in the contract. A Buyer should not automatically agree to this and should consider instructing his own notaire. We can assist with this. It is you as Purchaser who pays the notaire's fees, if there are two notaires involved, there is no extra cost to the Purchaser as the notaire's fees are fixed by law and the fee is shared.

Following signature of the contract searches are made. The notaire will obtain the equivalent of a Land Registry search from the Conservation des Hypothèques. This search will disclose any restrictions on the vendor's right to convey title and the existence of charges. The proceeds of sale must be sufficient to pay off any charges revealed. This period allows the buyer sufficient time to raise a loan. In addition, either a Note d'Urbanisme or a Certificat d'Urbanisme is obtained. This is a document from the local authority which declares the existing use of the land and administrative restrictions or requirements which apply. The Certificat may also give information on whether building is allowed, the density and other details of development. If the Certificat d'Urbanisme is positive, planning permission - Permis de Construire, should be granted for the proposed use.

The signing of the Acte de Vente, the final deed of sale, has to take place before a notaire. The expenses, the Droits d'Enregistrement and the notarial fees are also paid at the signature of the Acte de Vente by the purchaser. If you do not wish to or are unable to attend completion in person you can appoint an attorney to execute the Acte de Vente on your behalf using a Power of Attorney or Procuration. This document must be drawn in French, signed before a Notary Public and forwarded to the Foreign & Commonwealth Office where a Certificate - l'Apostille is annexed to give legal effect in France. You may find The Acte de Vente, a document many pages long in French legal jargon bewildering. An independent advisor can vet this document and explain the procedure to you in your own language and in terms you can understand.

These comprise the notaire's fees, stamp duty and registration fees. Where the property is more than five years old, these will amount to approximately 6.5% of the purchase price. These are payable in addition to the purchase price. For newly built properties, French V.A.T. - T.V.A. at the rate of 19.6% and usually included in the price is payable and in addition, notaire's fees and taxes of approximately 2% to 3% of the purchase price are payable. If a loan is secured on the French property additional notaire's fees will be payable.

Set out below is a non-exhaustive list of the main expenditure you may wish to include for your budget purposes when purchasing a French property: Taxe d'habitation: council tax, deadline(*) -15th December. Taxe foncière: land tax, deadline(*) - 15th October. Income tax: declaration(*) must be filed by 30th April. Please seek expert advice if you intend to work in France or rent out the property. Wealth tax: this is required if the value of your assets in France amount to 770,000 Euros or over; declaration(*) must be filed by 15th July. We are able to assist you in this matter. 3% tax return: this applies to all companies which own properties; declaration(*) must be filed annually. Services charges if the property is located in a co-ownership. Insurance and services Regular servicing for the equipment (e.g., septic tank, boiler, chimney etc.) Taxe d'enlèvement d'ordures ménagères: tax for the removal of rubbish. Redevance télévisuelle: tax on television. (*) The dates mentioned here are for information purpose only and applied for the year 2008. They may vary. In addition, they only apply to people who reside in a European country other than France. Please note that it may be possible to set up a direct debit for monthly payment of most taxes.

You should also ensure that insurance of the property is arranged from the date of completion. You may wish to take over the Vendor's policy.

Once the property is yours you will need to apply to the French services for the electricity, gas, water and telephone to be registered in your name. As from the date of completion you will be responsible for the bills for these supplies. The notaire can give you what is called an attestation, proof that you own the property, which may be required when an application is made to transfer the supplies.

You may also like to consider opening a non-resident French bank account from which to pay by direct debit your accounts for electricity, water, etc as post to France from England is notoriously unreliable. You will thus avoid the frustration of arriving at your property only to find the electricity has been cut off because the French electricity board (EDF) has not received your cheque.

French law will govern your French property. Please ask for our separate brochure. This page sets out general points only, which should be borne in mind when purchasing residential property in France. It should not be relied on in specific cases, for which detailed advice should be taken. If you are buying a property in France and would like this firm to protect your interests, please speak to Dawn Alderson on 020 8394 6374 or your usual contact partner.

Termites If a property is located in a region either infested by termites or at high risk of infestation, French law requires the owner to: · notify the Authorities who will publicise this information, · have a treatment carried out to eradicate any termites, and · provide the Authorities with a certificate issued by an expert other than the expert who carried out the first report. If a property is sold in a termite-infested region, the Vendor must supply a certificate, attached to the "Acte de Vente", confirming that there are no termites in order to benefit from the clause excluding hidden defects. It is important to note that termite reports are only valid for three months. Asbestos French law also provides that, for all properties whose planning permission was obtained before 1st July 1997, an asbestos report must be produced prior to the signature of a contract to sell (Compromis). The report will confirm if any asbestos has been detected and where, for example it can often be found in the insulation material used in older houses. If asbestos is found, the owners are required to inform the workers working on the property of its existence so that they wear the appropriate protective clothing and dispose of the rubbish appropriately. If the asbestos is found to be in poor condition however, the owner may be required to check its condition on a regular basis, or have an expert remove it within a period of three years. This will be mentioned in the report. If you are purchasing a property in co-ownership, you should also request to see the asbestos report for the communal parts, which should be provided by the Managing Agent (Syndic). The asbestos report should always be attached to the contract since it provides important information for the Purchaser. Lead French law requires that a lead report be issued for any property built prior to 1948 with a habitation or mix use should this property be located in a zone considered at risk. The Vendor must produce this report for the sale of his property. This report will only cover surfaces and not pipes or other hidden material. As part of the report, an expert will carry out a survey and take samples where appropriate. This report will state the presence, concentration and accessibility of lead. If it is found at a level reaching 1mg/cm3 or higher it is considered a positive reading. The lead report is valid for one year. This report will only cover surfaces and not pipes or other hidden material. Ingestion of lead (e.g. by inhaling paint flakes or dust) in high doses can lead to intoxication in young children, so if a particularly high level is found the expert may advise that the contaminated surfaces be covered or professionally stripped. Again, this information should be borne in mind where paint is renewed in areas where it was originally detected. If the property is co-owned the communal parts should have been checked and the information should be available from the Managing Agent. The Vendor must produce a copy of the lead report for the sale of the property to go ahead. Sewage system Most properties are connected to a communal mains sewage system, although there are areas where individual sewage systems are in place, for example in small countryside villages. Whether the sewage system is communal or individual, the Vendor has a duty to inform the purchaser. If the property is fitted with an individual sewage system, e.g. a septic tank, it is wise to check the date of installation and arrange for it to be checked by an expert to ensure it is functioning correctly. If you intend to start a gîte, you may wish to obtain confirmation of its capacity for this use. A recently implemented law dictates that Communes have the responsibility to create a body to oversee the individual sewage system by the 31st December 2005. It will soon be possible to obtain a report from a specific body instead of a local expert. The report will confirm the system complies with the legal requirements for the property you are purchasing. Please note that all Communes with 2,000+ inhabitants must be equipped with a mains sewage system. If your system does not comply with the new rules, you will be required to improve the system at your own expense. In addition, if the Commune is to be connected to the mains sewage system the property located in this Commune needs to be connected to this system within two years of its installation. Water supply The Vendor is also required to inform a purchaser whether the property purchased is connected to a mains water system or is supplied by other means, such as a well. If the water system is something other than a mains system, we recommend you check the capacity of the system and the quality of the water as applicable. Loi Carrez The law dated 19th December 1996 demands the Vendor produce a certificate from an expert confirming the exact measurements of the property for the signature of the completion deed. This certificate states the surface area for each room. Please note that areas of less than 1.80 meter high will not be taken into account, nor will garages, parking places, cellars, terraces etc. If the surface area stated in the report is larger than that mentioned in the Compromis the excess will not lead to a price increase. However, if the surface area is found to be smaller (by more than 20%) the price will be reduced proportionally. If you would like advice or to discuss any of the matters mentioned above, or any other property related matter, do not hesitate to contact us. We look forward to hearing from you.

Buy your "French dream holiday home" with a 19.6% discount, cover your mortgage costs, and end up with an asset when all has been paid! This ideal scheme known as "leaseback" is subject to very strict legal and tax conditions that may turn the dream into a nightmare if not strictly fulfilled. For further information contact: Patrick Delas E: delasp@russell-cooke.co.uk T: +44 (0) 20 8394 6387

We are often asked to provide advice to other professional advisers who have clients with french law issues. Click here for further details.