1. Obtain as much information as you can about the property while you are in France

Ask the agent to provide a copy of a plan cadastral (official plan) showing the parcel of land you want to buy. If possible, obtain a copy of the title deed. Go to the local mairie and look at the plan for the area. It will give you planning information and you may be able to find out about projects that may affect your property.

Check where the boundaries of the property lie. If there is any doubt about this, you may wish to use a boundary surveyor to have them properly defined.

2. Structure and surveys

Look for obvious structural defects and be aware that in many parts of France, infestation by wood-boring insects can be a problem. This can be treated but it is best to know what you are dealing with. Many older properties have lead and asbestos in them. This can pose a risk if the paintwork and structure are not kept in a good state of repair. Most French people do not have surveys carried out and some vendors may be reluctant to agree to this. However, it is better to risk losing the property than to buy a property that is not worth the purchase price because of hidden defects.

3. Understand the costs involved

The costs associated with a French purchase can be alarmingly high. The notaire’s fee (which includes stamp duty) will be in the region of 7% of the purchase price. The agent’s fee will be 5-10% of the purchase price. To this you should add the cost of legal advice in this country.

4. What is included in the sale price

Agree which contents are to be included in the sale. Some things, which we would consider to be fixtures, may be taken away by the vendor.

5. Mortgage

If your purchase is dependent on a loan, you must have an appropriate clause included in the contract. You will then be obliged to take all necessary steps to obtain the loan and inform the vendor/notaire when you receive an offer. If you do not manage to obtain your loan, you will not be able to withdraw from the purchase unless the right clause is in the contract.

6. Sale of UK property

If your purchase in France depends on the sale of another property, you must have a clause in the contract which enables you to withdraw if your sale falls through. Once you have signed your French contract and your 7-day cooling off period has expired, you are bound to proceed with the purchase and can only withdraw if certain special conditions are not fulfilled.

7. Ownership structure

Once you have decided to buy, you should consider, with your legal adviser, which ownership structure is suitable for you. This can be decided on between contract and completion but you will need a suitable clause in the contract in case the names which eventually go on the final conveyance deed are different to those on the contract.

Careful thought at this stage can save you an enormous amount in French income/inheritance tax later on. Each family situation is different. Your specialist lawyer can help you make the best decision.

8. Completion dates

There will usually be a planned completion date in the contract but this is not set in stone. You should not rely on this date in any way. You should certainly not make any reservations based on it until you have been notified in writing by the notaire of the final completion arrangements. Having said that, if the notaire is ready, you will have no right to cause unnecessary delays and may be required to complete at fairly short notice. Arrangements can usually be made so that you do not have to travel to France for this.

9. Insurance

It is essential to have appropriate insurance in place in time for completion. As a minimum legal requirement in France fire and third party liability cover is mandatory. We can put you in touch with an insurance company if you wish.

10. Transferring funds

You will usually be asked to pay a 10% deposit. Never pay this direct to a vendor. It should go into a bank account set up for the purpose by an agent or notaire.

The balance of the purchase price must be in the notaire’s account in good time for completion. You should allow at least 10 days for the transfer of funds and allow for bank charges. If the funds are not in the notaire’s account, the transfer of property cannot be done.

11. The binding nature of the contract

When buying a property in England and Wales it is possible to withdraw from the purchase at the very last moment. The situation is quite different in France. Estate agents can be very persuasive and it is tempting to sign the contract for fear of losing your dream holiday home. You are strongly advised not to sign the contract or any other document until it has been fully explained to you and any necessary conditions have been added. Although you do have a 7-day cooling off period after signature, this time soon disappears when you have to travel back to the UK and send a copy to your lawyer.

12. The conditions in the contract

Contracts vary enormously. The ones prepared by a notaire are, generally speaking, more protective of the purchaser but invariably extra clauses are need to ensure full protection for the buyer.

13. Conditions General

These are the sort of conditions you are likely to find in any contract. For example:

• that the Purchaser must take the property as he finds it on the date of entry
• that the Purchaser must take responsibility for all taxes and utility contracts relating to the property from the date of signing the conveyance deed
• that the Vendor must not sell the property to anyone else between contract and completion

14. Conditions Particulier (special conditions)

These are conditions that the parties have requested to be put into the contract and they are under the control of those parties. For example there might be a condition insisting that repairs are carried out or that rubbish is cleared from the garden.

15. Conditions suspensives

A condition suspensive is one which, if not fulfilled, allows the Purchaser to withdraw from the contract. This type of condition is extremely useful in protecting the interests of the buyer. For example if you wanted to have a survey carried out on the property, you could have a condition suspensive written into the contract so that if anything untoward was revealed by the survey that you could withdraw from the contract. You might have another stating that if any rights of way are discovered in the title deeds which will adversely affect your use or enjoyment of the property then again you can withdraw. Some conditions suspensives are absolutely essential. For example if the purchase of your French property is dependent on the sale of another property then you must have a condition which allows you to withdraw if you are unable to sell the first property. Another is where a loan or mortgage is necessary for the purchase. You can stipulate the amount, duration and interest rate of the loan you require. If you are unable to obtain the loan, with the appropriate condition suspensive, you may withdraw from the contract.

In theory there is no limit to the number of conditions suspensives that could be inserted in a contract provided the Vendor accepts them.

The examples of conditions suspensives given above are very often not included in a contract which is why you should not sign it until it has been checked and amended if necessary.

16. Signing the contract

A law which came in in June 2001 states that a purchaser of property must receive a copy of the contract which has been signed by both parties. Once this signed copy has been received, the Purchaser then has a 7-day cooling off period. During this time, you may withdraw from the contract if you wish but must do so by recorded delivery letter to the Vendor.

After the cooling off period has passed you have entered into a binding contract which you can only withdraw from if one of the conditions suspensives is not realised.

17. The notaire

The Notaire’s role is not the same as that of an English solicitor and you cannot expect the same sort of service or advice. He effects the transfer of property and makes sure that the state is paid any taxes (such as stamp duty) due. Although he is under a duty to advise clients this is very much more limited than you would expect when compared to an English solicitor. The Vendor is entitled to choose the notaire who should be impartial. Although the purchaser may appoint his own notaire too, this may slow down the process.

18. Between contract and completion

Things will seem to go quiet for a while. The notaire will do his work and obtain information from the various bodies involved and send the information to us shortly before completion.

19. The right of pre-emption (droit de pre-emption)

In most cases a local authority will have the right to buy the property instead of you if they wish. They usually have two months in which to exercise this right and therefore completion is very unlikely to take place before a two month period has expired.

20. Urbanisme

The Notaire will apply for planning information from the local authority which affects the property you are buying. Although he might send it to you he will not interpret it or advise you on it. However, we will undertake this function and make sure you are fully aware of anything that is detrimental to your enjoyment of the property.

21. Hypotèques (mortgages/charges)

The notaire will also obtain information on mortgages and charges on the property and I will report on this to you and let you know whether all mortgages have been cleared on the property or will be cleared at the point of completion. Otherwise there is a risk that you could take on somebody else’s debt.

22. Title deeds

To ensure that you have undisputed ownership of the property, the notaire will be asked to provide either copies of title deeds or a 20 year origin of title in your final conveyance deed. These documents also give information on rights of way etc affecting your property. You may not find out until a fairly late stage about these points. Therefore, as a precaution, I will usually insert a clause in your contract stating that if any inconvenient easements are discovered in these documents, you will have the right to withdraw.

23. Insurance

It is a legal requirement in France to have fire and public liability insurance cover for your French property. Usually it will be possible to continue the Vendor’s insurance policy. The normal rule is that unless told otherwise the insurer will continue the policy automatically for 90 days in your favour. The Acte de Vente (final conveyance deed) will state what the arrangements are for this. Usually it is the Purchaser’s responsibility to either cancel or continue this policy. If you decide to cancel it you must make sure that you have suitable insurance in place by the date of completion.

24. Géomètre

Although you may employ a surveyor to look at the building itself this is not the person to help where there are uncertainties over boundaries. If you are not absolutely sure where the boundary to your property lies then it may be worth employing a géomètre expert to determine this for you. Once he has established the boundaries he will obtain the neighbours’ signatures who cannot then later dispute the boundaries.

25. Estate planning

As soon as you have signed the contract, it is recommended that you consider estate planning issues so that when completion takes place, you have taken all the necessary steps to protect yourself and your family. In this way, hefty inheritance tax bills can be avoided and you can protect those closest to you. (See Estate Planning article below for an introduction to this subject).

26. Completion

Approximately three months after the signing of the contract the Notaire will draw up the final conveyance deed known as the Acte de Vente. Normally all parties are present for the signing. However in most cases it is possible to obtain a Power of Attorney which can be signed in the UK and sent to France. There is a small cost involved in this (usually around £80) as the Power of Attorney must usually be dealt with by a Public Notary, Solicitor or occasionally the French Consul.

The Acte de Vente itself is largely a reiteration of the initial contract but with additional information which has been obtained about the property. It comes with various supporting documents. I will report fully to you on the Acte de Vente and related documents. I will also check that the appropriate ownership structure is in place.

27. Buying new property

The law protects the purchaser of new property quite well. I will check that these laws have been complied with and that:

• the property has proper planning permission.

• the property will be completed even if the builder becomes insolvent
• you will have a 10 guarantee against structural defects
• there is a 2 year guarantee against defects in the equipment in the property
• there is a guarantee that sound insulation will be adequate

You will sign a contrat de reservation initially. The word reservation does not mean reservation in the English sense. It is a binding contract so I will make sure it contains all the necessary elements before you sign. As with a contract for an older property, you can sign in the UK and send it back to France for the vendor to sign later.

Developers can be fairly vague about completion dates but if they take a 5% deposit from you (as is usual) then completion of the sale must take place within a year. The actual completion date is often only tied down to a trimester or even a semester (eg second half 2003). You may insist on a more specific date in the contract if you wish. The dates in the contract must be adhered to unless there is a very good reason why not like very bad weather or strike.

As with an older property, it is best not to depend too much on stated completion dates. Wait until you have definite confirmation before making your holiday reservations.

28. French estate planning

There are a few simple steps you can take before you become the owner of French property and sometimes afterwards, to ensure that your French estate is dealt with in the way you wish during your lifetime and after death. French succession law is somewhat different to English succession law and its provisions may come as a surprise to English buyers who are used to the idea of testamentary freedom. Family situations are often complex these days, with second marriages, stepchildren and so on and provisions usually need to be made at the time of purchase to avoid difficult circumstances later on.

En Indivision and En Tontine

The first point to be aware of is what is meant by joint ownership. The usual method in France is that of indivision. This means that each spouse owns half the property, which is similar to the tenants-in-common situation in England. If a married couple want to buy a property together, they usually want the survivor to have ownership of the property after the first death. This will not automatically happen as the French are very protective of children in their legal provisions and will use the indivision method in preference to any other. Therefore, joint ownership en indivision means that when the first spouse dies, at least half their French estate must go to that person’s children. The remaining spouse therefore does not have freedom to do with the property as he or she wishes. If the children are those of the deceased from a previous marriage, then the survivor may be in the uncomfortable position of joint ownership with stepchildren.

These situations can be avoided by having a tontine clause inserted in the final conveyance deed (acte de vente). Ownership en tontine roughly equates with joint tenancy in English law and will mean that when the first spouse dies, the survivor will be considered as having owned the property from the start and thus the rights of the deceased’s heirs can be avoided.

Another important aspect to consider is that of inheritance tax. The tax-free allowances in France are not nearly so generous as in England. Even with a tontine clause, inheritance tax will still be payable on half the value of the property at the time of the first death. This is fine as long as the property does not exceed about £100,000 in value since a spouse has an inheritance tax allowance of about £50,000.

A French Marriage Régime

What if the property has a much higher value? When the French get married, they often sign a marriage contract which determines how their property is dealt with on death. The régime of communauté universelle de biens ensures that on the first death, all the property of the marriage is owned by the survivor with no inheritance tax to pay. English buyers can adopt a French marriage régime just in respect of their French property.

Those who decide to go and live in France permanently will find that their worldwide assets are then subject to French succession law as opposed to just the French real property. In these circumstances, it would almost certainly be worth adopting an appropriate marriage régime. However, where there are children from a previous marriage, most French notaires would not agree to deal with the kind of marriage regime which could have the effect of disinheriting children and would be surprised that anyone might want to do this. Even though such a marriage regime is perfectly legal and valid, according to the French civil code, it will be set aside if the children take action to enforce their succession rights. So Mr X and Mrs X have moved to France and want to leave all their property to each other and then to Mr X’s two children from his first marriage. They adopt the regime of communauté universelle. If Mr X dies first, then the children can take action so that the regime is ignored as far as two thirds of their father’s estate is concerned as this is their legal reserve. However, if the children were willing to renounce their right to take action at this point, then the property would pass under the regime with no inheritance tax.

The SCI - A French Property Owning Company

Another useful solution to some family situations is to set up an SCI. An SCI is a company set up for the management and letting of property. If the property is bought by the SCI, the members of the SCI own shares rather than property. As shares are considered to be personal property, not real property, then English succession law applies and the shares can be left in accordance with the deceased’s wishes. The SCI also gives the members a lot of flexibility as they can transfer shares freely between themselves and to others (usually with the agreement of all members only). This means, for example, that parents can gift shares to their children during their lifetime thereby avoiding hefty inheritance tax liability for them. However, the gift must be given at least 10 years before death. The company must keep accounts and hold an annual general meeting. As a means of avoiding succession law, this structure only works if the owners remain resident in the UK. There may also be some tax disadvantages in the UK so advice must always be taken.

Wills

Do you need a French will? When an owner of French property dies, the succession must be dealt with in France. If there is no will for the French property, the notaire will want to see the English will. A translation must be provided which satisfies the notaire dealing with the succession. This may have to be dealt with by an appropriately accredited translator causing difficulties and expense to the heirs. An English will would be accepted only insofar as it does not contravene French succession law. If a husband has willed his property to his wife and has not left the required amount to his children, this provision will be ignored.