Compromis de Vente
The Compromis de Vente is a legally binding and legally enforceable memorandum of agreement for a French property transaction, usually referrred to as the compromis.
Once both the seller and buyer have signed the Compromis, and the buyer has had 10 days reflection, there’s no backing out for either party.
If you will need a mortgage to complete the purchase you should declare this when you make a verbal offer and the compromis must, under French law, then include a clause suspensive that gives you the right to withdraw from the purchase if you cannot obtain a French mortgage.
You will need to specify the exact details of the mortgage you will be applying for and must be able to prove that you have taken all reasonable steps to obtain the mortgage you describe.
Normally a notaire will accept that you have used all reasonable means to obtain a mortgage if you have appointed a mortgage broker to act on your behalf.
The compromis de vente is a legal document which may be drawn up by a registered Estate Agent holding a current carte professionnelle and professional indemnity insurance or a Notaire.
The property must be described fully in the compromis including not just the size and location of the property and outbuildings, but also any fixtures and fittings included in the sale.
The price is also fixed at this point.
There are 3 types of conditions which may be included in the compromis de vente
Conditions générales mean for example that the buyer takes possession on the day of completion, becomes liable for property taxes from the date of the acte de vente and that the seller doesn’t sell off part of the property before then.
Conditions générales are fairly standard and will be similar in most documents.
Conditions particulières are written into the compromis to document specific agreements between the buyer and seller agreed, for example, to complete repairs before the acte de vente date.
If a conditions particulière is not fulfilled by the sale date you may not withdraw from the purchase, but you can ask the Notaire to retain some of the purchase price from the seller until the matter is put right.
Conditions suspensives are clauses which, if not realised, allow the purchaser to withdraw.
If you will be buying with the help of a mortgage you must ensure you have a condition suspensive in the compromis which allows you to withdraw from the purchase if your mortgage application is refused.
Promesse de Vente
Instead of a standard compromis de vente you may be offered a promesse de vente (promesse unilatérale de vente) which is an option to buy a property granted to the buyer by the owner.
A promesse de vente is at a specified price, good for a specific duration and is a form of sale documentation often used by a French property developer.
For commercial premises it is not unusual for the sales process to be governed by a promesse d’achat, under which the buyer commits to buy a property in the case where the owner wants to sell it.