Jump to content

Clauses suspensive


Pommier
 Share

Recommended Posts

We've just accepted an offer on our house. The buyers have sold their house in Nantes in as much as the compromis is signed subject to their buyer's loan being ok (offered in principle). They said that also the Maire has the right to pre-emption over their house as they say and as I understood Maires have throughout France. They said that the Maire has two months to exercise this right and they seem fearful that he might as their house is opposite the Mairie.

What would be the implications if this pre-emption was exercised? They seemed to think that the house would be valued and they'd receive less money than they'll get from their current sale. Is that correct?

Can they have a clause suspensive giving them a get-out if the pre-emption goes ahead? I'm assuming a clause for their buyer's loan.

Any advice please?

Link to comment
Share on other sites

As far as I know the maire can only pre-empt at the price that has been agreed with their buyer so they shouldn't need a clause suspensive.  I've got a clause suspensive stating that if my sale falls through then the sale will be subject to me getting a loan.

Link to comment
Share on other sites

As I undersand it there can be conditions suspensives over all sorts of things provided you accept them when you sign your part of the compromis.

It is up to you to to decide. However I am not 100% certain if there are limits.

Link to comment
Share on other sites

In my experience it is comparatively rare for a right of pre-emption to be exercised by the local commune, unless there are strategic reasons to acquire a property - for example, for road widening. I have had one case involving an apartment in a building the Mairie had already expanded into, needing more office space, and it was in a way logical for them to acquire this last remaining apartment in order that they could take over and refurbish the entire building. They paid the market price.

With regard to buying (or at least signing a 'compromis' on) another property which depends on the successful sale of an existing one, as in the case of your buyers, this can be fraught with difficulties. Again it is comparatively rare in France, in my experience, to have a group of buyers and sellers locked into a chain, but I personally would not commit to buying another property until my existing one was sold (sale completed, money in my bank account!). I would advise not doing anything too rash yourselves until (nearer) completion. If you are intending to buy another property, there is plenty of choice out there, and you can express an interest in buying without commitment, and ideally sign your 'compromis' immediately after completing your sale. The time between 'compromis' and completion can be contracted, provided you and the Notaire have done all the preliminary paperwork, and at worstyou might be a week or two betwen homes, but better that than caught between two transactions.

I realise (usually 10%) deposits are paid over by buyers and are recoverable, but recovery in the event of non-completion takes time, and can hold up your own plans if you are intending to buy based on the proceeds of a sale. But maybe I am just over-cautious.......

Link to comment
Share on other sites

Many thanks for the replies on this. My understanding of pre-eption had been the same as Debra, but then you start to doubt yourself and think "They're French, so they must know more than us". It seems as if even if the pre-emption was exercised, they'd still have the same money for the house so it wouldn't be a reason to pull out of the purchase of our house.

They seem confident that their buyer will get his loan, and presumably the clock is already ticking on confirmation for that. I've been to the notaire's office this morning and they've asked our buyer to go in on Monday with all their paperwork prior to a compromis on Thursday.

We've bought a building plot and having a house built so we're already committed (or is that, should be committed!) - thought we'd better get our house up for sale in case it took a time to find a buyer, but it's been only just over 3 weeks from first advertising it.

Link to comment
Share on other sites

[quote user="P-D de Rouffignac"]In my experience it is comparatively rare for a right of pre-emption to be exercised by the local commune, unless there are strategic reasons to acquire a property - for example, for road widening. I have had one case involving an apartment in a building the Mairie had already expanded into, needing more office space, and it was in a way logical for them to acquire this last remaining apartment in order that they could take over and refurbish the entire building. They paid the market price.[/quote]As in the same price the existing buyer had agreed to pay?

[quote user="P-D de Rouffignac"]With regard to buying (or at least signing a 'compromis' on) another property which depends on the successful sale of an existing one, as in the case of your buyers, this can be fraught with difficulties. Again it is comparatively rare in France, in my experience, to have a group of buyers and sellers locked into a chain, but I personally would not commit to buying another property until my existing one was sold (sale completed, money in my bank account!).[/quote]Ours isn't actually dependant on the succesful sale.  I'm using cash from the sale of another property which is due to complete in the next week.  If for any reason it falls through at the last minute then I will apply for a loan to buy the new property.  The notaire, rather than just leave the standard loan clause suspensive in, noted in the compromis de vente that I had signed a compromis de vente to sell this other property on such a date and expected to complete by another date and if that sale fell through, then I would need a loan and this purchase would be dependant on finance.  I thought the standard clause would be enough and maybe I'd just given too much info but maybe the buyer felt happier to know that if the cash was available then that would be paid rather than waiting for a loan - even though the date specified for completion is over two months way anyway.  The agent had said a cash sale would only take a month but I guess that's what you get for buying somewhere in July when everyone takes August off!

Link to comment
Share on other sites

[quote user="Pommier"]Many thanks for the replies on this. My understanding of pre-eption had been the same as Debra, but then you start to doubt yourself and think "They're French, so they must know more than us". It seems as if even if the pre-emption was exercised, they'd still have the same money for the house so it wouldn't be a reason to pull out of the purchase of our house.[/quote]Unless there is some cash under the table involved in the deal - that's the only time I can think there would be a problem if the commune pre-empts the sale!

Link to comment
Share on other sites

Too much info Debra! On the paperwork from our house sale, it is clearly indicated that the buyers had sold their home for X and had a mortgage for Y, in fact we were given far too much information about them, stuff we didn't need to know and in my opinion never should have known.

 

P-D de R, chains are rare? How so? Even people I knew selling a holiday home were in a chain, as they were selling the one in our village to buy one in the Charente. Our buyers were in a chain, as have most of the people I know who have bought, apart from had their home built. Cash buyers are wonderful, but even the people I know who own their homes outright, have had to have the funds from their property to buy their new one. I don't think I was in a poor region of France, I know of others that are far worse off than mine.

Link to comment
Share on other sites

[quote user="Debra"][quote user="Pommier"]Many thanks for the replies on this. My understanding of pre-eption had been the same as Debra, but then you start to doubt yourself and think "They're French, so they must know more than us". It seems as if even if the pre-emption was exercised, they'd still have the same money for the house so it wouldn't be a reason to pull out of the purchase of our house.[/quote]Unless there is some cash under the table involved in the deal - that's the only time I can think there would be a problem if the commune pre-empts the sale!
[/quote]

 

I know someone this happened to. An offer with a big amount of cash in hand. The Mairie bought at the official price that was accepted and this person lost a lot of money as they could not refuse to sell to them.

I was worried about our Mairie though, worried that our odious little maire would mess us around and delay things enough to put the buyer off. As it happened he didn't. He may have been as glad to see the back of me, as I was to see the back of him.

 

Link to comment
Share on other sites

I don't think you can ever know too much about your buyers.

Our buyers, Robert and Lulu, were very open about their financing of the purchase to the extent that they 'phoned their Notaire from our house who confirmed the price they were selling their property for. They had bank statements to show where the rest of the funds were coming from. We then sat down with our agent and his sub-agent and thrashed out who was getting what from the sale.

We enjoy going back to see them on our trips to France and know that we always have a parking space for the camping car when we need it.

It was a hellishly hot day for the signing. They sold their house in the morning and bought ours in the afternoon using the same Notaire. A very civilised affair.

Link to comment
Share on other sites

[quote user="idun"]

[quote user="Debra"][quote user="Pommier"]Many thanks for the replies on this. My understanding of pre-eption had been the same as Debra, but then you start to doubt yourself and think "They're French, so they must know more than us". It seems as if even if the pre-emption was exercised, they'd still have the same money for the house so it wouldn't be a reason to pull out of the purchase of our house.[/quote]Unless there is some cash under the table involved in the deal - that's the only time I can think there would be a problem if the commune pre-empts the sale!
[/quote]

 

I know someone this happened to. An offer with a big amount of cash in hand. The Mairie bought at the official price that was accepted and this person lost a lot of money as they could not refuse to sell to them.

[/quote]So crime for that is what it is does not always pay[:)] I assume the "under the table" payments are a way of evading tax on the sale.
Link to comment
Share on other sites

[quote user="Rabbie"]I assume the "under the table" payments are a way of evading tax on the sale.[/quote]The seller would pay less capital gains tax on a lower amount and the buyer would pay less notaire's fees but if the buyer wanted to sell the property honestly later, then they would be liable for more capital gains if it wasn't their main home.  I've heard of the maire preempting in such a case too.  I also heard of someone selling cheaply to a family member and then the maire preempted.  I thought I may have heard urban legends invented to encourage people to behave but maybe not, since Pommier has heard of it too!

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...