Selling a Property in France

Share | Print

Selling a Property in France

Below in information on:

If you have decided to move and sell your present French property, this page will provide a general overview of the process and the points to bear in mind when selling.

Instructing an Agent

All property agents (agents immobilliers) are required by law to be licensed and hold a carte professionnelle. Issued by the Préfecture, it is their licence to carry out the property sale (carte professionnelle de transaction sur immeubles et fonds de commerce). Likewise, property search agents (marchand de listes) and property managers (gestion immobilière) are also required to be registered. Most agents will be members of a professional association. The significant trade associations representing the Estate Agents in France are:

• FNAIM (Fédération Nationale des Agents Immobiliers)
• UNIT (Union Nationale de l'Immobilier)
• SNPI (Syndicat National des Professionnels Immobiliers)
• CNAB (Confédération Nationale des Administrateurs de Biens)

A seller's agreement with the agent will be either exclusive, mandat exclusif or or non-exclusive, mandat simple. Whichever is chosen, the fee will be the same and as a result almost all sales are on a multiple agency basis. The agent’s fee is usually about 5 to 6 percent (including VAT at the rate of 19.6 percent) on the eventual sale price.

A seller may instead try to sell the property themselves, without employing an agent and a seller who does choose to use an agent is recommended to seek to reserve the right to sell the property themselves. The risk being that could be obliged to pay the agent commission even if the find their own buyer. 

An Offer is Made: Next Steps

The purchaser will instruct a French notaire who will act for both parties. However the seller can instruct their own notaire who will assist the buyer’s notaire. The two notaires will share the one fee.

An agreement to purchase, the compromis de vente or promesse de vente is usually prepared and signed by the parties within a week or so of orally agreeing the sale with the buyer. The sale agreement can be prepared by the agent or the parties' legal advisor, not necessarily by a notaire.

The seller should ensure that any terms they want are included in the contract and that they are clear that the buyer has properly understood what is and what is not included in the sale (for example fixtures such as a dishwasher or garden decoration objects). For small items it may be easier to agree an inventory to be attached to the contract.

• See the Property Purchase Transaction page for a summary of the types of contract and common contract conditions. 

On the seventh day of reflection (the "cooling off" period) after the signing the compromis de vente, the buyer will pay a deposit of 10 percent of the purchase price, to the agent, legal advisor or notaire which they will hold as a stakeholder. 

Withdrawing from a Sale Agreement

The seller is effectively fully committed to the sale at the point of signing the sales agreement, Should the seller withdraw, they will be obliged to return the deposit to the buyer and pay a further 10 percent of the sale price. This applies even if they get a better offer after the sale agreement has been signed. 

Note that the position is different for the buyer. Under French law the buyer has a “cooling off” period of eight days after signing the agreement. In this period a buyer is free to withdraw from the agreement and receive the return of the deposit in full. At that point the agreement is at an end. Should the buyer withdraw after the eight-day period has passed, the deposit will be paid to the seller.

After Contracts are Signed and Deposit Paid

The legal advisor or the notaire will deal with the formalities of checking the title and making enquiries into any developments intended in the vicinity of the property. 

Depending on the age and the location of the property the seller might be obliged to instruct experts to provide a certificate after inspecting the property for the presence of lead, termites and asbestos.

• See AngloINFO INFOrmation Page Diagnostic Survey Reports when Selling Property in France

The Role of the Notaire

Under French law the transfer deed, the acte authentique, to transfer the property to the buyer at completion, must be prepared by a notaire. The notaire will act for both the seller and the buyer, though the buyer will instruct and pay the fee. There is nothing to stop the seller from instructing their own notaire who will assist the buyer’s notaire and share the fee. 

The notaire does not represent the interest of either party in the transaction; their role is not the same as, for example, an English solicitor in a property transaction.

Do not assume that the notaire will speak anything other than French. A seller who is unfamiliar with the French language and French legal procedure is recommended to obtain independent legal advice and guidance from an English-speaking lawyer or qualified legal advisor who can work in conjunction with the notaire.

Completion Process

Usually, the parties meet at the notaire’s offices to sign the acte authentique and pay the balance of the purchase price. The notaire will use the money to repay the outstanding mortgages, if any. 

The notaire is a government official who also acts as a tax collector, collecting any tax that may be due before forwarding the balance of the sale price to the seller. Tax may be payable if, for example, the property is not the seller's principal residence; there may be a liability to pay tax on any capital gain and fees may be requested by a tax representative, représentative fiscal. 

Pre-Sale Efficiency Report

Before a house may be sold, it is obligatory (since 1 November 2006) to have an energy diagnosis (diagnostic de performance énergétique). 

The diagnosis - to be carried out by a professional - is done to identify the estimated consumption of energy of a building on two criteria:

• the consumption of energy: usage of electricity in running the house measured by kWh/m2 of primary energy
• the impact of this consumption: greenhouse gas emissions measured in Kg of CO2/m2 

The efficiency report assesses energy usage and and natural risks along with noting the presence of asbestos and lead. It includes technical recommendations for improving consumption. There is a fee payable.

Note: these estimates will not constitute a contractual guarantee, but will allow an objective comparison of the quality of buildings put on sale. Real consumption of a building will depend directly on the electrical and heating usage by residents.

Gas Diagnostic Certificate 

The Gas Diagnostic Certificate (Un état de l'installation intérieure de gaz naturel) is compulsory for gas installations over 15 years old and is done to identify any safety issues with the gas system.

• See AngloINFO INFOrmation Page Diagnostic Survey Reports When Selling Property in France
• Further information from Logement.gouv (in French)
• The law from Legifrance (in French)

The diagnosis is also required on rental properties and new builds.

Related Information

• Major changes (applicable to secondary residents): Information in French from Impots.Gouv
• AngloINFO INFOrmation Page on: Capital Gains Tax
• AngloINFO INFOrmation Page on: French Property Capital Gains Tax FAQ
• AngloINFO INFOrmation Page on: French Taxes
• AngloINFO INFOrmation Page on: Property Purchase Transaction, How to Buy a House - in France
• AngloINFO INFOrmation Page on: French Property Taxes

Disclaimer
Every effort has been made to offer information that is current, correct and clearly expressed. The information in this summary is intended to be no more than a general overview of the position and certain details have been deliberately omitted. The contents of this page should not be taken as an authoritative statement of French law and practice. Neither the author nor the publisher are responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. This text is not intended to render legal, accounting or tax advice. Readers are encouraged to seek professional advice concerning specific matters before making any decision.

Prepared by: Simon Huxford, English qualified solicitor at Gordon S Blair Law Offices
3 rue Louis Aureglia, BP 449 MC 98011 Monaco
Tel: + 377 93 25 85 25 Fax: +377 93 25 79 58  / e-mail
Copyright © Gordon S Blair Law Offices 2004-2008 All Rights Reserved

0408ww