CAN A VENDOR PULL OUT of a CdV ?

[PierrePlug]

Thanks to all of the kind people who contributed towards this. Best wishes to all.

[Sunday Driver]

Are you the vendor or the purchaser?

Or is this just a theoretical question?

[P]

Is not the cooling off period only for the purchaser - the vendor, on signing is committed with no cooling off period.

Paul

[Nick Trollope]

[quote user="PierrePlug"]Sorry if this has been asked before, couldnt find it on a search. After the 7 (or 8) day cooling off period has ended, can a Vendor pull out of a sale after both vendor & purchaser have signed a CdV ? If the Suspensive Clauses have not been accomplished ( ie the purchaser agrees to apply for a mortgage(s) with one month, but does not as he/she intends to pay for the purchase with cash) does the CdV fall because the Purchaser has not applied for a loan and if so, who pays the Agents Fees ?[/quote]

There is no cooling-off period for the Vendor, only the purchaser. If the purchaser does pull out during the cooling-off period, the Vendor is entitled to withdraw from the sale (in the event, for instance that the purchaser subsequently changes their minds & wants to proceed).

The Vendor can pull out of the sale with impunity, if one or more of the CS have not been met (eg. in your example, you really should advise the Notaire that the circumstances have changed). However, in your example, I suspect that the clause will actually say something like "will apply for a mortgage within 1 month, if one is needed", or summat like that.

In most circumstances, the buyer pays the Agent, regardless of whose fault the failure was. This depends on ones contract with the Agent, however - some will not expect their fees, or reduced fees in he event that the sale does not complete.

Small point. If one forces the failure of the sale, because you have changed your mind, even if it looks like a failure of the CdV or the Vendor, the Notaire must advise the Vendor to force the sale through the Courts - or threaten to, at least. And vice versa.

BTW, there has been examples of fishing trips - asking this type of question for commercial reasons - and to my knowledge 1 member has been banned for doing this. A bit of background info will a) make people respond and b) is "polite".

Bon Chance

 

[PierrePlug]

Thanks to everyone who contributed here.

this is a great web site.

[BJSLIV]

The purpose of the clause is to allow the purchaser to pull out if he is unable to finance the transaction. It does not oblige the purchaser to take a loan, so if he has the cash then you will have to proceed or pay him and the estate agent compensation.

[Cassis]

Seems a bit naughty for a vendor to try to make the contract null and void on a technicality over whether a loan was needed by the purchaser (regardless of whether this is a valid reason or not), when it is actually the vendor who wants to back out.  No offence meant, maybe I have misunderstood something here.

[Nick Trollope]

[quote user="PierrePlug"]Our question is :- As its about 60 days since the contract was signed and the purchaser has admitted (in writing) that he does not require a loan nor has he applied for a loan, but he did sign an undertaking that he would apply for a loan within 30 days. Can we pull out of the contract ? Thanks again, this is a great web site.[/quote]

No, I don't think that you can. He has not yet broken the contract. If he has said that he does not need a loan, then decided that he does, then that is his lookout. If, he subsequently cannot proceed, then he must pull out, not you. Until then, you are in his hands. The time issue alone is not, I believe enough, if the purchaser still wants to proceed.

If you do not want to proceed, then you could try talking to your purchasers, hoping that they are delaying because they have changed their mind. You always have the option of withdrawl by consent - although the Notaire must agree. He (and the Agent) will/may want something for their effort so far.

I would warn you that, if the Notaire believes that you (or the purchaser) are trying to make the CdV fail, then he will come down on you like a tonne of parpings.. You will be diddling the French State out of their booty - they don''t like that...

[PierrePlug]

thanks for all of your replies

pierre-plug

[Albert the InfoGipsy]

Just as a general comment, it always amazes/amuses me how much "official" rules seem to vary in France.

We are in the process of buying a building plot using our own cash. We both had to write out in longhand, and sign, a statement that we were not going to need a loan and that if we changed our minds then problems getting one would not count as clauses suspensives.

[Cjlaws]

[quote user="Albert the InfoGipsy"]Just as a general comment, it always amazes/amuses me how much "official" rules seem to vary in France. We are in the process of buying a building plot using our own cash. We both had to write out in longhand, and sign, a statement that we were not going to need a loan and that if we changed our minds then problems getting one would not count as clauses suspensives.[/quote]

That's not a variance from "official rules", Albert. Since you've told your vendor that you won't need a loan, the contract has been drafted accordingly. It ensures that you can't back out by suddenly claiming that you needed a loan all along. Quite normal I can assure you.

[Albert the InfoGipsy]

I'm not complaining about our situation (apart from the writer's cramp!) but noting that if the OP's CdeV had been drafted in that way there would have been less cause for confusion. As I understand it the buyer never intended to get a loan so a clause suspensive based on needing one just fogs the issue.

[P]

Having the clause suspensive might have been so that they had time to consider whether they wished to pay cash - could have meant pulling money out of a long-term investment.

Is it not sometimes the case of a cash buyer being in a very good position to make a low offer - the vendor knows that the sale will not fall down after signing the Compris because the purchasers cannot get a loan.

In this case it does seem totally wrong that the vendors are trying to wriggle out of this because their circumstances have changed. If the purchaser had said 'our circumstances have changed' and theirs had not would they be saying to the purchaser 'do not wory about that lets forget the sale an here is your deposit back'.

Paul

[Patf]

But as BJSLIV said the vendor who pulls out has to pay both the purchaser and the notaire, so there is a penalty. I wonder what would happen if the vendor dies? ( G-d forbid.) Pat.

[Cjlaws]

[quote user="Patf"]But as BJSLIV said the vendor who pulls out has to pay both the purchaser and the notaire, so there is a penalty. I wonder what would happen if the vendor dies? ( G-d forbid.) Pat.[/quote]

A vendor who fails to complete must pay the purchaser and the agent. The parties contract for themselves, their heirs and assigns, so a deceased vendor's estate is bound by the contract.

[BJSLIV]

It just complicates things.

Once all the inheritance is sorted, the compromis can still be enforced against those who have inherited the property. I would however imagine that in most cases the purchaser would agree to give up their rights if they didn't want to hang around while all the family members got their actes together.

[PierrePlug]

Thanks to all for your responses.

[andyh4]

My initial reaction PP is that if you signed a CdV which was incorrect then you could be in for a lot of problems.  It is your responsibility to ensure that you agree with the content of the document before you sign it - no one  elses.

[Sunday Driver]

Sorry, but the sale of a house is a straightforward event.  Once you've signed the CdV you have committed to the sale and you can't pull out without incurring financial penalties.

The suspensive clause has not been "broken" as you describe it.  The purchaser is merely exercising his right to pay for the house by a different method. The clause is his protection if he is unable to source the funding, and only in those specific circumstances would the CdV become null and void.  Withdrawal by the vendor has nothing to do with "null and void" and the clause gives you no rights in this respect.

You signed the CdV, so you were responsible for the description, not the agent.  However, I expect the error could be corrected on the Acte Authentique to avoid you having to pay compensation to the buyer.

Any other yet-to-be-mentioned "incidental" factors we need to know about......?

[PierrePlug]

Only my stupidity !!!

PP

[Cjlaws]

From what PP says it appears that he thinks that the purchaser signed a contract containing mutually exclusive conditions (if the purcharer did or did not require a loan), but the details relating to such a loan were left blank. Sounds like the "loan" codition precedent should have been left out. I agree with Sunday Driver - a vendor can't rely on the purchaser not requiring the protection of a provision put there for the purchaser's protection, nor can he plead misdescription of the property, in order to avoid the contract. He affirms title to the property in the contract.

PP, I'm sure that you need help beyond this forum. You don't make it clear as to why two months have gone by and you are not under pressure from the purchaser. Perhaps you are. In any event the contract will contain a clause some thing like: Dans le cas où l’une des deux parties viendrait à refuser de signer l’acte authentique, elle y sera contrainte par tous les moyens et voies de droit, en supportant les frais de poursuites, de justice, tous droits et amendes et devra, en outre, payer à l’autre partie, à titre d’indemnité forfaitaire et de clause pénale pour le retard dans l’exécution la somme de :(xxx euros). That will be your liability, unless the contract states otherwise.

[painterman]

Perhaps if you want to back out of the C De Vente you could arrange through the notaire that the purchaser obtains a full refund of their deposit, and that you agree to pay for the Notaire fees for the work done so far (perhaps the taxes incurred by you may be less since the transaction has not proceeded to completion) for the purchaser, and also that you as the vendor pay the estate agent fees not the purchaser. If only sixty days have passed and if you do not have very much written proof from the estate agent that he has incurred much work so far, then it is unlikely that the estate agent has done very much work besides the marketing of the property for you, then perhaps you could come to a lenient agreement with your estate agent about a fee reduction for you? Honesty should be the best way forward and if you show in writing through the Notaire  that you will make sure that the purchaser does not lose their own money because it appears not to be the purchaser's fault that you have changed your mind about selling , then just maybe, the purchaser will agree to nullify the contract through the Notaire's office of course and with proof in writing that they would not incurr estate agent fees through no fault of their own.

Maybe this will be too costly for you? - maybe not? Perhaps the most expensive part for you would be the estate agent fees? If so, perhaps you could re-negociate with the estate agent to sell through him/her again to offset most of the fees with a different purchaser? You will not know unless you ask.

[fulcrum]

[quote user="Patf"]But as BJSLIV said the vendor who pulls out has to pay both the purchaser and the notaire, so there is a penalty. I wonder what would happen if the vendor dies? ( G-d forbid.) Pat.[/quote]

Nowadays there is a compulsory insurance put in place at the time of the sous signe to cover the parties involved against death. It is free.

[Cassis]

I think PP has had enough replies now.  Situation is clear.   Leave the poor beggar alone!