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Expiry of clause suspensive


Rustyhole
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If you can't get the mortgage, the clause suspensive should kill the deal. The agent involved in the transaction or the notaire should be informed with, doubtless, some sort of proof of the rejection such a letters from the bank.

Your deposit should be returned afaik.

If however you think the mortgage might yet come through, it might be possible to keep the contract alive, but I am not sure.

What is not popular is a non-genuine mortgage application, so they may ask a few questions, hence the need for the paperwork.
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You need to talk to the Notaire because he/she is the one will ultimately decide on whether the contract is voided or not, was there a reason for the date being so specific ?

Sounds like you want out of it but if there has been any bad faith or chicanery afoot it's possible it might not be as straightforward as you might perhaps be hoping for.

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I believe that, in the event of no proof of rejection of your mortgage application, they are not legally obliged to return your deposit.

At least that was what was explained to my potential buyers when I sold my previous house a couple of years ago.  Their mortgage was delayed by several days but we were fully informed and we were happy to extend the deadline because we could see the buyers were genuine.

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Best to telephone the agent and make sure they agree that the deal is off.  You have nothing to lose by doing so.

OTOH, depending on the agent, I have heard that they can, under some circumstances, still want their fees.

Just best, in fact, to make sure that agent, notaire, sellers know the situation.  I think I remember a case on here some years ago when someone was refused their deposit back.

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Doubtful such a clause would be at a sellers behest as clearly their interests are better served by being as flexible as possible.

More likely the Notaire inserted it to protect you in case you

failed to secure a mortgage, it may even be standard procedure where a buyer has indicated that they would be needing

one, but why either would put a rigid date to it is a mystery,

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Rustyhole

Your view that because the date in the clause suspensive has passed that the contract does not exist is a very British outlook. Here in France it is Napoleonic code that rules and - well shall we say - interpretations are somewhat different, some might chose to use flexible.

IIRC you said early on that you expected a mortgage offer to arrive later this month and that alone may well mean that the compromise is still considered as active. If the agent (you did say you had kept him in the loop), the notaire or the sellers are aware of this potential offer, then I think you could get hung out to dry if you do not proceed when/if the offer is made.

The onus is going to be on you to provide documentary proof of your inability to obtain an offer. This is a lot more than just keeping the agent informed. It could well include copies of the application forms you have submitted and the negative responses from the mortgage agencies.

Whatever you do, do not make any suggestion that you now have cold feet - for whatever reason, good or bad - because this can and probably will be treated as a sign of bad faith; that you have not fully tried to obtain a mortgage etc..

Good luck whichever way it goes.
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The normal legal procedure is that the buyer notifies the Notaire, by registered letter, well before the specified period expires , that the mortgage application has been rejected.The Notaire will want to see at least one, and possibly three different rejections. In the absence of this notification the sale proceeds.

Very often details of the amount to be borrowed , monthly payments,maximum rate of interest etc etc are all specified. This is to prevent the purchaser being forced to proceed , by requiring him to take a loan at usurious rates of interest.

Are there any of these supplementary terms in your contract?

The thing you have to remember is that when you signed the contract you agreed to buy the property.

The clause is solely there to protect you in the unfortunate case where you are unable to get a loan on which you were relying to fund the purchase.

Hence there is a real possibility that an inflexible vendor could require you to proceed with the sale unless you can really prove that you cannot get the finance.

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As I said the dates are there to give you a reasonable period in which to tie up your finance, at least 30 but more usually 45 days.

If you have not notified your inability to raise the money , in writing, within that period, then the contract carries on, either by your raising the money some other way, or by forfeiting the deposit.
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You seem to be reading it from a position of what you want it to say and mean which, as has been pointed out by those more familiar with the vagaries and idiosyncrasies of how things actually work on the ground in France, may not be as black and white as you might hope or expect.

I'm sure there was something in your first or second post about a change in financial situation or employment which seems to have disappeared but if that is the case, and if it were to genuinely lead to your prospective lender refusing or withdrawing an offer that would be a legitimate get out, something tells me that in that circumstance you might not be such a stickler for dates though !

Talking of dates, it's curious that you began by saying that Sept 5th was the cut off but then said it was originally July 5th so is there something you're not telling us ?

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Rustryhole wrote:

Taking the emotion out of it, i reckon that if a contract date has an expiry date then that is enforceable, hence why issue a avenant due to the original expiry if it is none commital?

As I wrote above, stop thinking with a UK legal head.

The expiry date is there so that if in the event that there is a time waster, the seller has a legal opportunity to put the property back on the market without any redress.

You can reckon all you want but if you keep up like this with the notaire please be prepared to lose the deposit and just possibly be chased by the agent for his fees on top.

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If the date you have mentioned is the date for completion of the purchase, that is, an acte de vente or an acte d'authentique, you would have been informed that the date is in fact provisional.

It's not fixed in stone precisely because, in a case like yours where the mortgage offer is delayed or indeed if you were taken ill, or some unfortunate circumstance befalls the vendor, etc etc, the date can be re-arranged to suit all parties.

I have bought 2 houses and sold one and each time the final date of exchange was delayed, but none of the compromis was invalidated as a result of the delay. 

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I'd say this being an extended deadline is something highly relevant as it sounds now like the sellers

were getting impatient with the delay and put it on you to force you to put

up or shut up because with a compromis in place they are stuck with

you and can't try to sell elsewhere. 

As

I see it now then the expired second deadline and your non performance gives the sellers the right to withdraw but doing so does not

necessarily absolve you from forfeiture of your deposit if you do not provide proof of a

mortgage refusal and best effort to secure one.

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As has been said, if there is a clause suspensive relating to refusal of a loan, in order to use this clause you do need to provide a satisfactory papertrail to show that you have applied for a loan and been refused. You can't just say "I asked several banks but they all said no". Every application results in a papertrail, the notaire will want to see this, and if the paperwork you give him shows that a decision is still pending he'll arrange to wait until that decision comes through. He's going to assume the buyer is in good faith and is still hoping to proceed so he's not going to cut them off high and dry with an application under consideration, just because a random deadline has arrived; because how would that be in either party's interests. Amending the dates in a contract is not a big deal. Terminating a contract is a bigger deal.
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