How secure is your investment if you buy real estate in France?

Buying property in Paris can be tricky, particularly when it comes to older buildings and properties with hidden problems. Although one must remain cautious during the process, there are a number of ways that French law protects prospective real estate buyers.

Ample time to decide

• Though Paris real estate often sells very quickly, buyers typically have a number of weeks to change their minds about the purchase before their earnest money becomes firmly committed.  It takes several weeks for the preliminary contract to be drawn up, and once the preliminary contract is signed a 10-day reflection period starts.  The down payment is not firmly committed until the expiration of the reflection period.

Limited, but carefully monitored documentation for old buildings

• When it comes to older properties, a buyer usually agrees to the ‘as is’ condition of the property, like any vintage piece, and with no particular guarantees. However, French laws are increasingly more protective of the buyer. In the case of older properties, this translates to careful regulation of the amount of information one gets on the property. A number of diagnostics are required by law to be provided to the buyer, including the state of lead exposure, gas and electricity, plumbing and termites.

The seller’s obligation to deliver

• The seller must deliver the agreed upon property to buyer, in line with what was expected. The two parties sign a sales agreement called “compromis de vente” in which they agree on all the essential components of the sale, including the price and when the property will be delivered. If this agreement is violated, as is the case when the seller cancels or delays the sale, French law guarantees monetary compensation. If the property is not in the state that was agreed upon, negotiating an amicable solution with the seller must first be attempted, but the buyer can obtain a reduction of the sale price, and in extreme cases a cancellation of the sale.

Guarantees against property defects

• The French Civil Code protects the buyer from hidden expenses, guaranteeing buyers a case against the seller where a property is found to have a defect after the sale. If the defect is known to the seller before the sale and included in the sales agreement, the buyer may not make a case against them. If the defect was indeed hidden (even if the seller was unaware of it), was present before the sale of the property took place, and causes the property to be unfit for use (or if the buyer would not have purchased the property at all or at that price had they been aware of the defect), the seller has two years after discovery of the defect to submit a claim for compensation. This compensation can take the form of a reduction in the sales price or cancellation of the sale.

• Likewise, if a property’s size is found to be 5% (or more) smaller than promised, additional compensation may be due the buyer.

Despite these important laws protecting buyers, it is important to have someone helping with due diligence by reviewing documents to be sure there are no hidden expenses coming up, no regulations (or lack thereof) in the building that would cause problems, no internal conflict between co-owners, or undisclosed nuisances in the vicinity. Working with Paris Property Group throughout the purchase process ensures our clients’ interests are protected through the entire process.