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Occupied Paris property: a forthcoming movie ‘My Old Lady’ puts the spotlight on French real estate law
Shooting in Paris has recently finished for a new movie that delves into an aspect of French real estate law – property that is already occupied.
‘My Old Lady’ stars Kevin Kline as a penniless New Yorker who has inherited a valuable Paris apartment from his father. Arriving in Paris to take possession, he finds an elderly lady (Maggie Smith) and her daughter (Kristin Scott Thomas) occupying the apartment. Under French law, he must wait for the old lady to die before he can recover it – and pay her a monthly sum.
Reverse mortgage scheme
Buying French property en viager (reverse mortgage/life annuity) has been reviving in recent years. The buyer purchases the property for a reduced price. The seller gets a monthly payment and the right to occupy the property for life.
The scheme is obviously high risk. Neither buyer nor seller knows in advance how long the annuity payments will continue. And it backfired for the notary (official who handles property transactions) who bought an apartment in southern France from Mme Jeanne Calment. She outlived her purchaser and his widow continued the monthly payments for 32 years until Mme Calment died in 1997 – at the age of 122.
For buyers wanting a rental property, an occupied apartment can be 10-25% cheaper than an empty apartment, depending on the rental amount, the length of the contract, and the tenant’s age. It’s also a plus with mortgage lenders, since borrowers receive a rental income from day one. And an existing tenancy avoids the property standing vacant while seeking a tenant.
Here too, French law has to be taken into account. Tenancy contracts for unfurnished apartments run for three years (if the owner is an individual) or six years (if a company). Tenants over the age of 70 with limited means have the right to stay in the apartment or the landlord has to provide an alternative. For furnished apartments, the minimum contract runs for one year.
At the end of the term, owners can repossess the apartment only if they want to live there; sell it; or if the tenant has breached the contract terms. The French parliament is considering a law that will, if voted, increase security of tenure for tenants.
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Picture Credit © Lindsay McCallum
Contact Paris Property Group to learn more about buying or selling property in Paris.