//Housing

Housing

In short

When buying a property in France, you need to find exactly what is included in the asking price, as well as bearing in mind the other costs that will be obtained.

Set-up costs

  • The agreed price of the property to buy
  • Agent’s fee
    Many French estate agents (immobiliers) include the agent’s commission in the price displayed in their advertisement(‘FAI’ means ‘frais d’agence inclus’ which is agent’s fees included). Agent’s fees vary between 3% and 7%.
  • Notaire’s fees
    The amount varies between 7% and 8%.
  • Deposit
    You will usually be asked for a deposit of 10% of the purchase price. It has become customary to pay the deposit at the time the initial contract (compromis de vente) is signed. It is safe to pay the deposit into a notaire’s account. If you are asked to pay it to an agent, ensure that they have a proper holding account for the purpose of keeping clients’ deposits (compte sequestre).

If you withdraw during your 7-day cooling off period, the holder has a legal obligation to return the deposit to you within 21 days.

  • Other costs: property finding fees, legal presentation in the UK & currency converter fees.

How to go searching for a property?

in Montpellier & Surrounding areas

A lot of information is available from magazines, Internet and advertising properties for sale in France. It is very easy to get an idea of what type of property is available and at what cost before beginning a search.

There are many ways to search for properties:

  • Estate agents
  • Property portals f.e. www.seloger.com,
    www.logic-immo.fr, www.avendrealouer.fr, www.pap.fr, www.vivastreet.fr
  • Property magazines f.e. logic-immo magazines
  • Property search service f.e. Living Easy

The location and type of the property should be carefully considered based on whether it is to be a main residence, second home, holiday home to be let out on occasion or a property to be let as an investment for the future.

We advice you to make a list of the important elements of your new home: purchase price, overall size and number of rooms, requirement for a garden, terrace, pool, garage or cellar, in the city or near the beach or any other elements.

The Estate Agent

French estate agents (Agences Immobiliers) are subject to strict regulations which are written in law. They must hold a license (carte professionnelle) and usually a fidelity bond to enable them to hold client deposit money. Details of their license and bond must be well displayed in their office.

Many of the french estate agents are members of professional associations such as the Syndicat National des Professionnels Immobiliers (SNPI) or Fédération Nationale des Agents Immobiliers et Mandataires (FNAIM).

A property owner who wishes to use the services of an estate agent to sell their property is required to enter into a mandate agreement giving the estate agent the necessary authority to act. There are two kinds of mandate:

Mandat simple: the vendor still reserves the right to negotiate on the sale and may instruct several agents to sell the property at the same time.

Mandat exclusif: the vendor trusts all the negotiations to a single agent for a specific period and it is forbidden to employ any other agents during this time. The vendor may still reserve the right to involve themselves in the negotiations, but he/she needs to specify this in the agreement.
Each type of agreement will specify the amount of the agent’s fee: what it covers and who is liable to pay for it. The amount of agent’s fee varies from 4 to 5 %. If property is offered by more than one agent, the price can vary because of different commission rates.

The Notary

In France the notary (Notaire) is a public officer responsible to the Ministry of Justice. They have to ensure thal all requirements of French Law are satisfied and that all taxes on the purchase are paid. They represent the State and work on its behalf to ensure that the transactions is legally valid. In many cases the name of the vendor’s notaire is inserted in the contract and a buyer should consider appointing their own notaire as well, in which case the fee will be shared.

Buying a property

When you have found your ideal home, there are two main stages that follow in the purchase of a property in France

  • signing a the preliminary contract: compromis de vente.
  • signing the deed of sale: acte de vente.

 

The Preliminary Contract

This is a firm binding contract. It is a full contract that contains all essential key conditions required in the final purchase deed. It is very important to ensure that any special conditions (conditions suspensives) regarding the house and finance, without the happening of which you would not wish to purchase the property, are included. There is usually a deposit payable at this stage of between 5 and 10% of the price of the property. No other matters can be added in at a later date.

The term conditions suspensives means that before stipulated date all points referred to in the conditions suspensives must have been satisfied. For example that the loan offer required by the buyer is received, a survey (Diagnostic Technic) has been done by the vendor and any certificates regarding the pool, heating, etc. have been supplied. If any of these conditions are not met through no fault of your own, you are entitled to a refund of your deposit. The estate agent will also loose his fee.

Regarding Finance, the buyer must show to the vendor how you are to finance the purchase. You must declare the amount of any loan you need to buy the property, the interest rate and the repayment terms that you would accept. You are usually allowed one to two months to complete these arrangements. Should you fail to obtain the required loan, the contract will be no longer valid and any payments will be returned to you (Law of 13th of July 1979). However, you have to prove that you applied for a loan and it was rejected.

 

IMPORTANT: after signing the preliminary contract, you will receive the signed documents by mail. The day that the buyer received the signed documents you will have 7 days to rethink about your purchase. In this period the buyer still has the opportunity to cancel the purchase without any obligations or even any explanations. In case of cancellation, the buyer need to send a registered letter (lettre recommandée), dated within the 7 days of the reflection period, to the vendor and the real estate agent. Any payments or checks will be returned to the buyer.

 

Deed of Sale: Acte de Vente

Whoever has prepared the preliminary contract, estate agent or notary, it is the notary who completes the work and prepares the deed of sale incorporating the terms of the preliminary contract. First they fulfill all the conditions imposed on them by law and by the preliminary contract. Then they draw up the final contract which can also be known as the acte authentique.

When this document has been signed the transaction is complete. The buyer and vendor attend the notary’s office: the documents are read to them, they sign, the documents are witnessed and the transaction is recorded.

The acte de vente is very important. The description of the property contained in it, takes precedence over that in the land registry. So, it is very important that all the details are correct. The notary keeps the original acte de vente, they wll provide you with a certified copy of the deed of the sale.

Type of Rentals

Short-term tenancies:

  • A holiday property market in which can serve as suitable short-term accommodation.
  • Contracts can be concluded per month until one year for furnished properties.


Long-term tenancies:

  • A standard contract for unfurnished (vide) properties.
  • A minimum of three years contract
  • A notice period of three months for the tenant, six months for the owner of the property.

Set-up costs

for short-term tenancies

Rental Deposit (dépot de garantie): a rental deposit will be required at signing the rental agreement and it is refundable at the end of the tenancy. The deposit can be more than one month’s rental for a furnished letting.

Insurance: tenants are under an obligation to take out house insurance.

Mandatory taxes for French residents:

  • Taxe d’habitation
    Every household in France – whether it’s your main residence or second home, owned or rented – must pay an annual taxe d’habitation or ‘occupier’s tax’. Whoever is the occupier on 1st of January is liable.

  • TV licence & Taxe d’ordure ménagère
    The redevance audiovisuelle (currently EUR 133) is a tax on any TV in the house, even if you only use it to watch DVDs. If you don’t have one, you have to declare this on your annual tax return.The taxe d’enlèvement des ordures ménagères (TEOM) is a separate charge for rubbish removal. Payment is due before 15 November but you can pay by monthly installments.

Set-up costs

for long-term tenancies

Rental Deposit (dépot de garantie): a rental deposit will be required at signing the rental agreement and it is refundable at the end of the tenancy. The deposit cannot be more than one month’s rental for an unfurnished letting.

Condition Survey: It is normal practice to have a condition survey undertaken prior to occupation; the costs of this survey will be paid by the tenant.

Agent Fee: if you are introduced to a property by an estate agent then a fee will be payable (one month’s rental). The regulations require a signed contract prior to any payment.

Insurance: tenants are under an obligation to take out house insurance.

Bank guarantee (optional): when signing a rental contract in the private sector, the landlord might ask the tenant to provide a bank guarantee (from a banking institution in France).

The bank guarantee usually represents an amount equivalent to 6 months rent. The duration of this guarantee is equal to the duration of the lease agreement. It therefore expires when the tenant leaves.

Mandatory taxes for French residents:

  • Taxe d’habitation
    Every household in France – whether it’s your main residence or second home, owned or rented – must pay an annual taxe d’habitation or ‘occupier’s tax’. Whoever is the occupier on 1st of January is liable.
  • TV licence & Taxe d’ordure ménagère
    The redevance audiovisuelle (currently EUR 133) is a tax on any TV in the house, even if you only use it to watch DVDs, appears on the same bill. If you don’t have one, you have to declare this on your annual tax return.The taxe d’enlèvement des ordures ménagères (TEOM) is a separate charge for rubbish removal.Payment is due before 15 November but you can pay by monthly installments.

Documents for signing your french rental contract

for long-term tenancies

Applications are usually handled by an estate agent rather than the owner (propriétaire) or landlord (bailleur). As a prospective tenant (locataire), you will have to complete an application form. The following documents are needed to complete the rental agreement:

  • Your identity – passport, driver’s licence, other ID or visa information.
  • Professional activity – a work contract and employer’s reference.
  • Financial support – the last three pay slip and previous tax return.
  • References of previous renting – a declaration or references and rental payment receipts from last rental property (if relevant)

It is illegal for the landlord to request a bank statement.

New arrivals may not have all this information. If your employer is a large multinational company accustomed to hiring expats, they may be able to assist by writing letters of introduction or references.