Buying a high value Parisian flat
This article is for general information only. You should only act or refrain from acting after receiving full professional advice on the facts of your particular case. This article does not constitute investment advice.
Matters which can arise in a purchase of a high value Parisian flat are set out below. The main lesson is to take action early on if you feel things are “not right” or you have any concerns. Be suspicious if a property is an obvious “bargain” this usually means there is a problem in waiting.
- Information from Mairie
It is a good idea at the outset to make enquiries of the local mayor’s office, Mairie, regarding any planning matters or administrative disputes which affect the Property. Remember however that replies obtained cannot necessarily be relied upon for compensation purposes if later found to be inaccurate. The key issue is to ask the right questions in writing as there is no standard enquiry form.
In England a local search is obtained before exchange of contracts but in France the very rough equivalent is obtained after the Preliminary Contract known as “Promesse de vente” is signed. However the best approach is not to be pressurised into signing any documentation by the estate agent and to make your enquiries at the Mairie before you sign anything.
After signing a contract you will have the benefit of a ten days cooling off period during which you can withdraw from the sale and be refunded any deposit without having to give any reason. It is best to avoid having to go down this route.
- Pre-emption right
The most common pre-emption right is in favour of the Mairie which applies to many properties. If this exists the Notaire has to give notice to the Mairie that the Property is to be sold and ask the Mairie if it wants to buy it at the same price (and conditions). This right is rarely exercised in practice. Completion of the sale cannot take place earlier than two months or before the notaire is informed that the Mairie does not wish to purchase the flat. If the Mairie decides to purchase, you will recover any deposit paid to the Estate Agent or the Notaire.
- Vices cachés
If the Parisian flat is more than 10 years old you will acquire it in its existing state and condition at the date of the conveyance and you will have no recourse against the Seller regarding the state of the building or fixtures and fittings. The Seller gives no guarantee as to hidden defects known as vices cachés. After completion of the sale you may be able to claim against your seller for any hidden defects. But, it is a slow and arduous process because you would have to prove that, among other things, the seller knew of the defect but did not disclose it to the buyer, and/or acted in bad faith. Typical situations where this may arise are when the seller has constructed the house himself or undertaken major renovations, and is aware that the works do not conform to the correct norms or that the materials used were sub-standard; or that the apartment and its appendices were constructed illegally. This guarantee does not extend to the usual surveys, as described below and you only have a period of 2 years from the date of the discovery of the defect to take action.
- Loi Carrez
The Loi Carrez (named, not for the unit of measurement, but for the minister of housing who introduced the law) is a protective measure for only the buyer of a flat in France. The contract relating to the purchase of a property must state the surface area of the flat, in square meters. In 1996, a law was passed establishing a standard way of measuring that size, defining what is and is not “liveable” surface area. If after you purchase the flat you later discover that there is more than a 5% difference between the stated surface area indicated in your purchase contract and the actual surface area of the property, you have up to one year to contest the sale. The seller is legally bound to reimburse you for the difference and if the surface was certified by an expert, they are similarly liable for the error.
In France the profession of surveyor, as understood in England does not exist. You can still ask permission from your seller for his Parisian flat to be inspected by an architect or other building professional, prior to making a decision to proceed, at your own expense.
There are various “diagnostic searches” in France. These are mandatory although some do not have to be undertaken depending upon the age of the flat. In Paris and if the flat was built before the 1st January 1949, the diagnostic searches cover lead, termites, asbestos, energy performance, gas, electrical risks and “natural, mining and technological risks”. The diagnostics are carried out by specialist companies that produce reports which are obtained by the seller, not the buyer.
- Service charges
In 2014 a new law came into force ('Loi ALUR') to protect owners and buyers relating to a flat sale. When the contract is signed your seller is obliged to provide certain documents and information to you of their apartment, including the règlement de copropriété (rules and regulations of the copropriété), which was often not previously provided until the day of completion of the sale. In a small co-ownership called copropriété, it is important to establish that the co-ownership is correctly functioning and there are no disputes and that the building is insured as a whole and the co-ownership manages this type of expenditure on behalf of all owners.
- Common parts
A Parisian apartment is always owned in copropriété. This mean that you will therefore own a lot (unit) of the apartment block which will include your private living area (partie privative) together with a notional share in the common parts of the apartment block. On completion of the purchase you will become a member of the copropriété, along with the owners of the other units and will be entitled to vote on matters affecting the flat. If the flat has been recently renovated we recommend you check whether the règlement de copropriété has also been updated to take these changes into account.
- Rights to rent out flat
In Paris the Maire is taking an increasingly tough stance on short-term lets (less than 120 days per year with the flat not your main residence). The French law gives the Maire of Paris the power to require a landlord to pay compensation for the loss of a permanent home. The amount varies according to the location of the flat. The obligation on landlords to pay is widely ignored in Paris, but the Maire has recruited inspection staff to control abuse. Infringement of the law is subject to a fine of up to €25,000. Before signing a contract to buy we recommend you check whether or not the règlement de copropriété authorises short-term lets.
Sykes Anderson Perry Limited