PROPERTY MATTERS IN FRANCE
BUYING PROPERTY
When looking for your ideal home, remember that it will be described by the number of rooms it has -1 pièce, 2 pièces, 3 pièces and so on – not including kitchens, bathrooms, garages etc. For example a 2-pièce is a one-bedroom dwelling with a living room. There are numerous estate agents, and many speak English or are run by English-speakers who will be able to explain the process and costs involved.
How much does it cost?
There are several fixed costs to be aware of when buying property, with or without a mortgage.
Deposit: some institutions do offer 100% mortgages but you still have to lay down a deposit the day you sign the compromis de vente (sales agreement contract). It is advisable to pay this to your notary or real estate agency - not the seller. They will hold it until the transaction is completed.
Mortgage fees: many French banks and lenders charge a one-off fee of 1% up to a ceiling of 1,500 euro for processing a mortgage. Do shop around as it varies and some do not have a limit.
Notary fees: you have to use the services of a notaire who is the state’s legal representative. The charge should be around 7 % of the purchase on an existing property and about 2 to 3 % on a new-build.
Property registration fee: this varies by region. Real estate agency fees: generally between 5-10 % of purchase price for a villa or an appartement, old or new, subject to TVA (19,6 % in France), but the fee is negotiable. Generally the buyer pays the fee.
Beware of agencies who ask if you can pay a part of the sale price in cash, as it will lower the value of your property on paper.
Compulsory reports: Note that the seller is legally obliged to provide several reports on the property being sold. These include:
- Accurate surface measurements, where apartments held in co-ownership are concerned ( Loi Carrez)
- Measurement of lead in paint, if the property was built before 1948
- Security of gas and electricity installations
- 'Clean bill of health’ certifi cate in areas where termites are known to be a problem
- Presence or not of asbestos
- A survey of natural risks, as assessed by the local authority (fl oods, forest fi res, earthquakes).
- Energy analysis: energy effi ciency of the property.
USEFUL TERMS
Co-propriétaire: person who owns an apartment in a block or divided house. Owners are issued with a set of rules which fi xes the rights and obligations of the co-propriétaires in the building.
Syndicat or syndic: the executive body of a shared building to which all co-propriétaires belong.
Taxe foncière: local property tax levied on property owners. Payable once a year.
Taxe d’habitation: local property tax based on occupancy (not ownership) of a property.
NB second home owners: Note that if a property is not lived in on January 1st, and yet is deemed to be “habitable” by the authorities, then the owner must pay this tax, regardless of whether they already pay it on their primary residence. Payable once a year.
Note: if the property is rented on January 1st (regardless of the length of duration of the lease) it is the renter who pays.
VEFA (vente en état future d’achèvement): contract used when buying an off-the-plan property, one that has yet to be built. This system is very regulated and securing for the buyer in France, developper has to be insurred in order to secure the completion of the building in any case, namely in case of his bancruptcy.
Viager: une vente en viager has no equivalent in Anglo- Saxon law. It is best described as the sale of a property in return for a life annuity, and can be useful for older people wanting to stay in their homes while receiving a regular income. The property is transferred to the buyer upon the death of the seller.
Redevance audiovisuelle: Television tax is paid with your taxe d’habitation (you are obliged to tick a box on the taxe d’habitation declaration form if you do not possess a TV). This tax is paid by every household with a television set. You pay the same amount regardless of how many televisions are owned at the property.
Note: Payment is also due for TVs in second homes and holiday houses even if they are not used all year or whether they are only used for viewing videos/DVDs.
RENTING PROPERTY
If the property is not the principal residence of the tenant, even a verbal lease (one that is unwritten) is allowed, and the basic tenets of French law will govern the agreement. However, if the property is the tenant’s principal residence a written lease is necessary and this will contain standardclauses. There are two types of rental contracts (see below). A tenant may give one month’s notice at any time, the landlord must give three months notice.
1. Furnished seasonal lets, often short-term. The rights and obligations of the tenants are governed by the agreement between them and the landlord. There are not many legal controls over this sector and a bad tenant has relatively few rights. Another option is to rent it out unfurnished on a six monthly renewable contract.
2. Longterm unfurnished lets offer much more protection to the tenant, particularly with regards to renewal of contracts and length of tenancy. For example, the tenant has a right to a three-year or six-year contract, depending on the status of the landlord. Also, provided they have not damaged the property and have paid the rent on time, they have automatic right to renewal of the tenancy, unless the owner wants to sell or requires the property for himself or a close relative. Note: even if the court grants an expulsion notice for a bad tenant, landlords cannot evict them in the winter months from November 1st to March 15th.
Documents from landlord Landlords must provide the results of several diagnostic tests:
- Energy analysis: energy efficiency of the property.
- Clean bill of health certifi cate in areas where termites are known to be a problem.
- Measurement of lead in paint, if the property was built before 1948.
- A survey of natural and technological risks in the area where the property is situated
FINDING A PROPERTY
Advertisements in local French and foreign language media are a good way to fi nd a place, and will give you an idea of what you can expect to pay for different types of property. However, do take care when dealing directly with the owner. It is always advis able to draw up a signed agreement or contract that states what you will pay for - electricity, phone bills and so on - and insist on an inventory of the contents. Charges comprises (cc) means building charges are included in the rental price. Sometimes heating bills are included in these charges if the building has chauffage collectif. There are numerous professional agencies, many of which will have staff who speak English. While they do charge a fee (honoraire) which is generally equivalent to one month’s rent, the fi nal outcome offers more security to both parties. If you are looking for a short-term let however, note that many agencies do not entertain contracts of less than a year and if they do, the cost of the honoraire could mean you end up paying way over the odds for a short-term stay. The advice in this case is to shop around. There is a relatively new type of service available from agents where you subscribe to receive a list of telephone numbers of landlords with properties that suit your needs. You then call the contacts direct. The downside is that if none bear fruit, you do not get your money back. For interns, students or low-paid workers there are also relatively low cost government-run lodgings, like the Espace Soleil in Nice. Here you need to provide proof of employment / internship, and be warned that applying for a place can take time. The amount required for the refundable deposit is one month. It is illegal to withhold rent payment in the last month of a lease in lieu of the deposit. The law requires tenants to have a comprehensive household insurance certificate. Note: a studio comprises one room, with kitchen and bed, plus bathroom. T1 (or F1) indicates 1 bedroom apartment with separate kitchen and bathroom. T2 (F2) is 1 bedroom, a living room, separate kitchen and bathroom. T3 (F3) indicates two bedrooms, T4 four bedrooms and so on.
