Completing A French Property Purchase
Completing a French property purchase is a process in the hands of the Notaire.
Once the Notaire in charge of the transaction has advised that he will be able to complete in a couple of weeks’ time, having carried out all the searches on the property the buyers need to be ready to complete their French property purchase. The buyers will now be waiting for the final contract to be prepared and the breakdown of cost to be sent to them together with the date and time of completion.
Completion is when the transfer deed is signed. Unlike in the UK, this always takes place at the Notaire’s office in the presence of the parties unless a power of attorney, an alternative way of signing the final deed if one of the parties cannot attend, has been arranged.
As far as the process is concerned, the Notaire will only call the vendors and buyers for a meeting once he has received all the formalities and searches. It is not compulsory for a Notaire to send a draft contract before completion to the other party and you may need to request a copy of it. Notaires often draft the contract a few days before completion providing that the searches have not revealed any problem or issue that they should be made aware of. The particular and general conditions of the sale will be similar to those inserted in the ‘compromis de vente’ but formatted in a different way in the final contract.
The Notaire has the responsibility to draft the contract and advise the clients of any issue that should be resolved before completion. The final deed will be split in two parts. The first part will include the conditions that will be necessary to register the contract at the Land Registry, ie identification of the parties, description of the property, price, particular conditions affecting the property such as an easement, a right of way, conditions of the mortgage and first charge and stamp duty applicable on the transaction. The second part deals with the general conditions of the sale including the obligations of vendors and purchasers, state and condition of the property and title. During the meeting at the Notaire’s office, the Notaire will read the contract to the parties to make sure that they understand the terms of the contract and respond to any queries. The contract will then be signed by the parties after signing their initials on each page.
The deed that the parties will sign is kept by the Notaire as a ‘minute’. The buyers will only received a certified copy of it once it is registered at the Land Registry, but in the meantime two certificates will be given to them to prove their ownership of the property. The certificates are necessary to transfer the utilities and insurance.
As far as the funds are concerned, the Notaire will send a breakdown of cost to the buyers setting out the final amount to be paid on completion. It will show the balance of the price minus the deposit and mortgage and notaire’s fees that include stamp duty and registration fee, and any additional charge such as a proportion of taxe fonciere owed to the vendor. We detailed in our previous article that Notaires have to comply with money laundering legislation and need to identify the origins of the funds that will be paid. The money from the mortgage will be released directly by the bank upon the Notaire’s request. However, some clients may wish to benefit from the services of a company dealing with currencies and it is not unusual to have clients instructing UK-based currency dealers to change Sterling into Euros which can save a considerable amount of money. The funds will then come from a third-party that is not identified as the notaire’s clients. The Notaire would have the right to refuse the funds if the sender is a third-party to protect him against any money laundering activity. For this reason it might be wise for the buyers, if they decide to transfer the funds via a third-party, to ensure that the Notaire is aware of the origins of the funds and that the currency dealer has also proceeded with a money-laundering check and is regulated by the appropriate regulatory authority.