Promissory contract / Private mortgage / instalment contract / rent to buy in France

[Iain]

Hi,

We are looking for some guidance and hopefully an introduction to a notaire who could assist us.

We need a notaire to prepare a contract between two people who are both British.

We are not sure if the contract should be a promissory contract, private mortgage, instalment contract or a rent to buy style of contract, we are open to suggestions.

The seller of the French property is based in the UK and owns a property in the French Alps, he bought it back in 2006 and has a mortgage on it. He no longer uses it and has struggled to sell it in the traditional way, so he has decided to rent or sell it and to transfer the title once the full amount of rental payments has been made.

He has agreed to sell it for €600 per month over 98 months which would also cover the outstanding mortgage amount and term.

Then once paid off he has agreed that he will transfer the title.

Please let us know your suggestions and the best way to do it, also any introductions to suitable notaires would be helpful.

Thanks in advance.

[Cathar Tours]

Just Google French Notaires in the UK and many will come up. I suggest you contact one of them. People here are not qualified to give you such advice.

[NormanH]

I have already given a link in another thread about this.

[Ruth Wood FPN Assistant Editor]

Hello Iain,

My name is Ruth and I'm the assistant editor at French Property News magazine. Enchanté!

I don't know if you have already resolved this issue, but we put your question to Matthew Cameron, head of French legal services at Ashtons Legal (ashtonslegal.co.uk). Here is his response. I hope it's useful.

We would like to use an edited version of your question on our Ask the Experts pages in the next issue of French Property News (March). Would you be happy to be named at the bottom? If so, please can you email me at [email protected] If not, we will just say "Name supplied".

Bonne chance and best wishes,

Ruth

Matthew Cameron, of Ashtons Legal, replies:

There are in principle several ways in which this French property transfer could be addressed.

It is likely, however, that the first hurdle will be how to deal with the existing mortgage over the property. If title to the property is to pass on the date of completion to the buyer, it is almost certainly the case that the bank will need to have its loan repaid in full, and the mortgage cleared. On the other hand, if the intention is to keep repaying the mortgage then that would mean that the property would not be transferred at the start. The lender would need to be consulted at an early stage, to assess how best to deal with the transfer.

One option going forwards might of course be for the buyer to seek their own mortgage funding as a new loan, from which the existing mortgage could be paid off. That, though, does not fit with the model as suggested. Indeed, this may result in the existing lender issuing a new loan in favour of the buyer.

If it were not for the existing mortgage, the simplest answer would probably have been to complete the sale on the basis of a private mortgage, under which the seller retains a charge over the property, under which the seller would be able to enforce against the buyer if future instalments were not paid. However in the presence of an existing mortgage, it is probable that such an arrangement would not be sanctioned by the lender.

Overall, any notaire should be able to put the transaction in place, provided that a suitable agreement is reached between buyer, seller and current lender for how best to deal with the case. It may well be that negotiations with the lender, and discussions with notaire, would best be administered by a specialist solicitor.