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I'll shortly be in a position to make a formal offer on a property in the Limousin. Once the deposit is paid and the 7 day cooling off period has passed, what happens to the deposit should my house sale in the UK collapse? Is there any thing I can do to protect it? Paranoid yes, Pessimistic yes!
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[quote user="whistleway"]Thanks for the info Clair, I had heard that somewhere before, but the Immobilier we are dealing with told us that we could not make our sale a condition.[/quote]

I am surprised. We had it on our contract. It could be worth looking into it more...

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Would I not be correct in saying that somewhere in the initial Compromis process the buyer is asked to declare that he is in a position to purchase? I know our Maitre asked me that before I signed mine.

You can argue the definition of that if you like but personally I would have thought that if the purchase depends on something as nebulous as the sale of a UK property, on which you presumably haven't yet exchanged contracts, then you're not actually in such a position and therefore sticking your neck out, unless of course, if push came to shove, you could raise the money elsewhere say by remortgage or bridging loan perhaps..

It's all very well the vendor saying they will wait 6 months but I'd be surprised if they would agree to an open ended Clause Suspensive or an undated deal and would expect some time scale to be specified. Might a Maitre also refuse to action a deal without a completion date ?

You are obviously aware that if you haven't got the balance of the money at the point it's due, however far in the future you may have mutually agree that date to be, then the vendor will be within his rights to demand you complete or forefeit your deposit.

I stand to be corrected on this one but I believe that, although it's rare, it is theoretically possible for a vendor to persue a defaulter through the courts for the full purchase price and that if a court order is obtained in France it can be enforced in the UK. 

In your place I would definately be seeking independant legal advice but above all don't let your Heart rule your Head, if you lose this house there'll be another one........!

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I think a while ago it used to be common for Agents to accept "Sale of British house" as a valid reason to include in the compromis.

However as the number of Brits has increased, particularly non-completing-Brits they have realised that it is a risky route to go down. Hence the current example.

French borrowers seem far more willing to take on bridging loans. It seems to be a key part of the process. I suppose its easier to bridge when you are on the lower income multiples accepted by French lenders.

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I wish you well but I do think that you're taking a huge gamble.

You don't say whether or not you have a found a buyer for your UK property however, even if you have, I think you'll likely have some sleepless nights until you've until you've actually exchanged contracts.

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I tried to make a Clause Suspensive on the sale of my UK house two years ago and the seller would have none of it. I raised the money and went for the house here by using my savings and a remortgage in hte UK. I was lucky and sold the house in the UK 3 months after completing here. It was a very fraught time but I have never looked back.

My advice would be go for it, it is after all the rest of your life and providing you price the UK house correctly it will all work out in the end. Live life on the edge and things fall into place.

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[quote user="whistleway"]Thanks for the info Clair, I had heard that somewhere before, but the Immobilier we are dealing with told us that we could not make our sale a condition.[/quote]

I think that sums it up.  In your case it seems that the immobilier you are dealing with, and who acts for you, has advised you that you cannot make your UK sale a condition.  You give no reasons for the immobilier saying this, but it could possibly be that he has discussed this with the vendors, and they have refused.

If that is the case then it seems to me that you cannot force the vendors to agree to this condition, regardless of whether the law would allow it or not.  Remember the deal is basically between you and the vendors, and both of you must agree and accept all the conditions, or you do not sign the contract.  I suspect that even if the vendors accepted this condition, legally you would be in difficulty if your UK house sale fell through and you wanted your deposit back, unless you had varied the purchase contract, and had the change of conditions specifically initialled by all parties.

Any sale and purchase agreement can be subject to negotiation, and variations on the standard format can be agreed.  This is a matter between the buyer and the seller.  In that case it is essential to ensure that any non standard clauses are fully legally binding on both parties.  In my experience, house buying contracts are standardised to simplify matters and to keep legal costs down - they can be changed, even in France, but it can involve additional significant legal costs.  Any standard contract, and also any changes must comply with national law.

You could, for example, negotiate a deal which did not require any deposit, and which solely relied on your successful UK sale completion whenever that may be - six months, two years?  That being said, I seriously doubt that any sane vendor would agree to those terms.  Unless of course you were paying a vastly inflated purchase price!  Perhaps you could negotiate a lower deposit, in order to fund a bridging loan?  You do say that you can't make use of a bridging loan, but you do not say why.  Perhaps you could increase the price of your UK house a little in order to fund a loan?

When we bought our house on a standard format we declared that we did not require a loan to purchase the house here, and in that case we were firmly advised that the deposit was non-returnable in case of non completion of purchase for any reason whatsoever.  Even if both principals died e.g. in a car crash, then our children, or other heirs, would be liable to complete the purchase.  The only possible get out was if we declared that we needed an official loan, such as a mortgage, and that loan was refused.  We agreed to these standard terms as it suited us.  In reality, although I have outlined possibilities, I suspect that your vendors will insist on a standard contract - unless of course you make it worthwhile for them to change the contract and take a risk.

I think you should get proper legal advice before signing anything or giving a deposit, and I agree with everything that Ernie has said.

I suggest you go back to your immobilier and ask him what negotiations can be undertaken with the vendors, but in short, from what you have said I think that if you go ahead and pay the deposit without special conditions being added to the contract, and then you are unable to complete because your UK house sale fell through, you would lose your deposit.

I must add that I am not an expert in this matter, and that my advice is based on personal experience and research only.

Good luck.

David

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I  found  my French house  while waiting for the purchaser of a second house  I was selling  in the UK to complete ... The Immo spoke to my UK agents after which was happy to include the Clause Suspensive to the effect that the purchase of the Vendee house was subject to the completion of the sale of the UK  one ..... My UK agent phoned  the Immo when contracts were exchanged ...everybody happy !  I had of course found a purchaser for the UK house and things were well under way towards completion ...might have been be a bit different if I was still looking for a purchaser ....it is however possible if all agree to have such a  Clause Suspensive included 
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not trying to give advice here, only "telling it as it is".  we were determined not to buy in france until we have sold in the uk.  then we did sell in the uk and bought in france.  then, guess what, our uk sale fell through, lady changed her mind 2 days before completion.  fortunately, we were able to go ahead with the french purchase.

that was back in august and now the uk property has been sold a second time and, for the second time, the potential purchaser pulled out saying that she couldn't afford our house after all.

result, we have 2 lots of solicitors fees and hours and hours of taking these so-called purchasers round our house, showing them how to work the central heating, offering them items of furniture, etc (we don't want to bring everything to france), agreeing that they bring their mothers/children/boyfriends/surveyors etc etc.  i cannot tell you the hassle it has been with zilch results

i think the moral of the story is PROCEED WITH CAUTION

 

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[quote user="whistleway"]...what happens to the deposit should my house sale in the UK collapse? Is there any thing I can do to protect it? Paranoid yes, Pessimistic yes![/quote]

Irrelevant - unless you pull out of the house purchase in France.

No different to England if you pull out after your contract to buy has been exchanged.

As others have said add a clause suspensif if the funds from yr UK house are needed.

John

not

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[quote user="David"]Even if both principals died e.g. in a car crash, then our children, or other heirs, would be liable to complete the purchase[/quote]I'm afraid I have to disagree with this because before signing our Compromis we asked the question "what if one or both of us died" and were told by the Maitre herself that, unless the a survivor still wished to go ahead with the purchase, that  it would automaticaly be grounds to withdraw and get the deposit returned.
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[quote user="ErnieY"][quote user="David"]Even if both principals died e.g. in a car crash, then our children, or other heirs, would be liable to complete the purchase[/quote]I'm afraid I have to disagree with this because before signing our Compromis we asked the question "what if one or both of us died" and were told by the Marie herself that, unless the a survivor still wished to go ahead with the purchase, that  it would automaticaly be grounds to withdraw and get the deposit returned.[/quote]

I do know for a fact that there is now mandatory insurance cover provided free of charge, taken out by your agent at the time of signing the compromis, to cover the purchasing parties against death.

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You may, as others have said, be able to include a clause for your UK house sale in the compromis, if the seller is in agreement (broadly speaking you can have anything in a compromis so long as all parties agree to it).  I work for a French estate agent and we have had this clause for buyers, BUT usually with one or two conditions - firstly, only if a named buyer is already in place, and also possibly with a time limit. 

We had this clause in our own compromis when we bought our house in France.

Lou

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Reading the comments posted since I mentioned the "clause suspensive", I can see how lucky we were when we made the offer on our house in 2002.

  • Our French purchase depended financially on the UK sale.
  • We had made it a condition of purchase (clause suspensive) at the suggestion of the French estate agent (he was probably despairing of ever selling the property in question!)
  • The UK property was not on the market at the time
  • The French seller never objected or asked for a time frame.

We had (mentally) accepted that the deposit money would be lost if we could not complete the purchase because of a failure to sell in the UK, however we were confident about selling quickly (and we sold in the first week marketing the property.)

As someone else wrote earlier, the larger number of purchases by British buyers since then may well have brought about a different attitude.
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Hello - you can specify any clauses suspensives that you like, but they have to be agreed by all parties.  If the seller is willing to wait for a definite sale on another house that's great, but few are - at least not those who understand the difference between the French and British house markets. If the seller is not dependent on the sale in order to move elsewhere then you might stand a chance, otherwise it leaves things far too open-ended.

As previously mentioned, many agents and notaires will not normally agree to make a sale firm until the buyer is in a position to move, i.e. has the finance in place, whether from money in hand, firm sale on another house, a mortgage, or is prepared to arrange a bridging loan (or pret relais, much more common and less onerous than its British equivalent).

If you go ahead without a clause suspensive and cannot complete the sale then it is a big risk. You do indeed stand to lose 10% of the purchase price if you have to pull out.

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Thankyou everyone for the replies, I can't say all my concerns are gone, but at least now I have a good idea about the ways I can go about it. As is patently obvious, If your vendor is agreeable to the Clause Suspensive and also your house sale in the UK goes fine, no problem, otherwise it's in the lap of the gods.
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