Paying for French property in Pound Sterling

[mint]

Yes, derf, the agreed sum IS in euros and I have told both notaires that I will pay taxes and their fees based on the euro sum!

We knew what the euro amount will be so it's just the exchange rate we are working on (by "we", I meant the seller and me).

I am taking the exchange rate for the next 5 trading days, working out the price and then doing an average!

Of course, we knew about the taxes and fees being based on euros so I am afraid you've got hold of the wrong end of the stick entirely.

[freddy]

It is possible and legal for the funds to remain in sterling - some notaires say the money is legally required to go through their account this isn't true and should be read as 'this is a bit hard and unfamiliar, so I'm going to say its impossible' for the full story see:

http://www.sykesanderson.com/Service_France/articles/french_sale_in_sterling.asp

[mint]

Thank you for that, Freddy.

Certainly, in our case, there should be no complication because:

the seller has no mortgage on the property

the property is his principal home and has been for over 10 years (therefore, no CGT)

we are paying cash, ie, not with a mortgage

the seller has already moved back to the UK where he is now resident

our money is in the UK in sterling

 

I suspect it's his notaire, who sounds like an old fuddy-duddy (and I have met notaires just like him) who is objecting.

Our notaire, on the other hand, has been recommended by Stan Streason from this Forum and who did a similar transaction for him.

I intend to "stick to my guns" on this occasion.  Your link might come in useful when I request that the seller's notaire make contact with this firm.

Let's see whose nerve gives out first, eh?

[Will]

The Sykes Anderson method, although legally possible and perfectly correct, involves two sets of English lawyers as well as a cooperative notaire, so only really works with higher value transactions - note that the example in the link is worth 500,000€. The method previously employed by Judie (and presumably by the others who have been involved in sterling transactions) is rather simpler, although the general principles are the same, so it can be applied to cheaper houses.

One very valid point made in the Sykes Anderson article is that a sterling transaction in France can become extremely difficult if mortgages are involved.

[mint]

Will, I'm not really looking for the exact method as described nor indeed at the price of the property.  What I'm most interested in is the principle that such a transaction is LEGAL. 

You see, the seller's notaire has claimed that a sterling transaction would be illegal so that is  definitely an incorrect statement.

I'm going to stick out for what I want and, if the seller really wants to sell (to me), he'll have to change his notaire.

[Stan Streason]

We used one English solicitor who was not really acting for anyone.  He had pre agreed instructions from both parties.

Receive funds from me, agree account details with seller, receive instructions from notaire to release funds and then release funds into sellers account.  A couple of hundred pounds plus some tt bank fees.

[woolybanana]

Poppycock, it is not a sterling transaction as the figures for reference purposes are in euros.

[Will]

Sweets. my reply was to Freddy, at the bottom of the previous page.

It is certainly not the case that a sterling transaction is illegal - but I am sure the paperwork has to show values in euros. The aforementioned Sykes Anderson article, plus Stan's and Judie's experiences show that buying in sterling is perfectly possible and legal.

I do understand that many notaires may be too conservative and stuck-in-the-mud to vary from the conventional path, and I understand your concerns because without a willing notaire you are somewhat stuck. I doubt if a couple of forum posts and an article by an English solicitor will do much to persuade that notaire.

Really, you could agree a price in shirt buttons if buyer and seller were both willing; as long as the documentation shows the euro equivalent there should be no problem in theory.

[mint]

No reason why there should be a problem, Will.

We have agreed the price in EUROS and the notaires have been notified of this.  All that's left is for us to agree the sterling price (at an exchange rate that is fair to both parties) and for a note as per Stan Streason's explanation to me along the lines of

"for the avoidance of doubt, the amount of X euros will be settled by the payment of Y pounds"

It's just that I have met notaires like the seller's who, through ignorance or idleness, just say that it's illegal, impossible, blah, blah.

Soooooo ........ wearying! 

[pachapapa]

Definitely OT but a notaire cognisant of "two transactions" one in euros in france and another for the balance in sterling in the UK sounds plausible.[:)]