Who are the usual suspects?
The project of buying a property in France can sometimes seem daunting when thinking about all the aspects it entails. The following professionals will usually be encountered on your path to completion and assist you to have your own corner of France.
- The estate agent
The estate agent is usually your first point of contact to find a property in France. Like in the UK, if working on behalf of the vendor, the agent will assist in finding a buyer for the property. If working on behalf of the buyer, the agent will assist in finding a property for sale. In practice, the commission is usually paid by the buyer but this is agreed at the outset.
All French estate agents must be registered with the French Trade Authorities and the activity of estate agent is regulated by a specific Act: the Loi Hoguet. One of the strict rules of this Act is that all estate agents must have a carte professionnelle (i.e. professional card) that allows them to carry out this activity. It is always advisable to check this before dealing with anybody.
- The lender or loan broker
You may be looking for a loan to finance your purchase. Fixed or variable rates are one of the many options available and you may prefer to use a loan broker. The latter will not only be able to assist you in your decision but also help you carry out the procedure with the lender you have chosen.
French law allows a protective system for the borrower when he applies for a loan to finance a property transaction whether it is a purchase, a construction or renovations.
The rules protecting the borrower are based around simple ideas: the borrower must be well informed about the nature and importance of the commitments he makes. As a result, French law enforces strict regulations with which the preliminary offer of loan must comply. 10 days are therefore given to the borrower to understand that information and to decide according to his best interests; this is what is called a cooling-off period. When he borrows to acquire, it is necessary that he is committed to both the purchase and the loan and not just one or the other.
Therefore, if the contract states that the price is paid directly or indirectly by means of a loan, then this contract is under the legal condition of obtaining this loan. Thus, the failure of the loan application invalidates the purchase.
- The currency broker
Banks often require exorbitant fees and offer poor exchange rates on international money transfers. As a result, specialists in transfers of foreign currency (usually called currency brokers) can be a great alternative to manage your international payments. They can beat high street banks by up to 4%.
It is important to manage the transfer of currency through a reputable currency broker regulated by the FSA.
There are usually no commission or hidden fees as the profit made by a currency broker comes from the difference between the buying and selling price of a currency. Some brokers will however charge a small fee for transactions under a certain threshold.
- The notaire
A notaire will usually intervene in the purchase procedure to register the deed of sale on completion.
“Notaires are public officers, authorised to receive all deeds and contracts to which the parties have or want to give the character of authenticity attached to acts of public authority, and to ensure the date, keep its record and deliver the original deeds or copies†(Order n°45-2590 of 2nd November 1945 relating to the status of notaires). Notaires have received delegation by the state to act on behalf of private parties.
Although seemingly involved in the conveyancing procedure in the same way, a notaire has a very different role from a UK solicitor as he does not represent one or the other party and is a tax collector.
- The lawyer
A lawyer specialised in French property law can assist as soon as a property has been found. Usually, the first contract, which is binding for both parties, is drafted by the estate agent responsible for the sale. The estate agent is not a legal specialist and the buyer risks signing a deal that will not protect his interests and wishes. A lawyer can help by reviewing and modifying the contract clauses in order to protect the client’s best interest.
He can also provide tax advice in relation to aspects of assets subject to French taxation and generally liaise with everyone involved in the procedure to ensure that a buyer’s instructions are correctly carried out.
Guillaume Barlet is a bilingual French lawyer specialising in French assets and wealth management issues for Bank House Investment Management Ltd