French House Selling Bureaucracy

[Ian]

I'm currently enjoying selling two houses: one in France and one in the UK.  Both sales are progressing nicely and this has given me an interesting perspective.

A regular theme on this forum is "French bureaucracy" which is (almost) universally believed to be intimidating, dense and gargantuan.  It has been some time since I last sold a propoerty in the UK and things have changed there.

I can now state that UK house-selling bureaucracy is without doubt the greater (Congratulations Chairman Brown).  I wonder if those of you with French and British businesses have noticed the red-tape gap closing too?

[woody234]

what do you mean the greater, the uk house selling is easier or harder than in france and how many houses do you enjoy buying and selling each week

[woolybananasbrother]

Ian is rich

[Sprogster]

I am dealing on a weekly basis with the sale and purchase process of properties in the UK on behalf of clients and am unaware of any recent changes to the conveyancing process?

The only additional bureacracy I can think of are the anti money laundering due diligence procedures, which require the professional firms involved in the transaction to obtain appropriate client identification and satisfy themselves as to the source of funds. However, these regulations are driven by international agreement and the IMF, so apply equally in other countries such as France.

The tax situation in the UK on non resident investors in UK property is far more benign than most other countries, in that there is no liability on the foreign investor to UK capital taxes on any profit made. Also no inheritance tax or forced heirship complications either. Hence one of the reasons foreign investors are buying up most of central London! 

[Ian]

[quote user="woody234"]what do you mean the greater, the uk house selling is easier or harder than in france and how many houses do you enjoy buying and selling each week[/quote]

By greater I mean "more of it".  i.e. the paper-chase, form filling, toing-and-froing over contractual details and general legal rigmarrol (spelling?)  is greater - IMHO - in the UK than here in France.  Good news for British lawyers, conveyencers (and Sprogsters?) no doubt.  As a regular punter, this surprised me somewhat - having previously subscribed to the view that it is the French who are most bogged down by paperwork.

My post is no comment on the house selling market in general - both economies are experiencing some difficulties. Neither house was especially easy to sell, though we had several offers for both.

As for "buying and selling each week" - I only posted based on my own personal (and private) experience .. I'm sure that there are many more highly experienced posters who do indeed buy and sell regularly on a profesional basis who have more closely watched the increase in UK bureaucracy than I.

As I said in my OP  - it has been some time (i.e. several years) since I last "enjoyed" selling a house.

I know my UK accountant tells me his tax-text-books get fatter each year too.  Are Brits trying to overtake the French in creating more and more bureaucracy?

Unsurprisingly, those with a personal and commercial interest in more bureaucracy will try to convince the rest of us that it is all "for our own good". 

[dragonrouge]

Ian as a lawyer and mainly contract and cross border contracts and the like I can tell you that tax and house buying are two entirely differing processes.  OK our Chancellor needs his pennies but in my considered view the house buying process in the UK save of course for all of the pre contract issues now surrounding it is undoubtedly better than here in France.  We of course have mainly now registered as against unregistered land and HM Land Registry is able quite easily able to deal with any enquiries in this regard as regards rights of way etc etc.  Of course still unregistered land mainly in the farming community where ownership rests in the family but overall if you have a Registered number for the land you can now get on line and find out everything and I mean everything  as to the title.  For instance if I knew that number and because I have an account I could tell you today if you have a mortgage when its due for repayment and the terms!

Again enquiries before contract is a UK thing it does not exist here in France and let the buyer beware.

Moreso if a Solicitor gets it wrong (and they do and thats when I come into play sometimes) then you have recourse to them on a partnership or an individual basis.  Indeed final push goes to the Law Society.  Here Notaires are different and they and the 5th Republic are fighting tooth and nail against Brussels to open up the Notaires market.  Whats new.

I prefer the English system and when Denning was about it was fun. Not that I was in front of him but his name is writ large in all of the text books.

He is buried at Whitchurch in Hampshire being a son of Hampshire.  Long live the High Trees Principal and the rules of equity.

[Sprogster]

Ian, I have little to add to dragonrouges excellent post other than to agree that with the central public UK Land Registry system, buyers of property in the UK are far better protected than most other countries such as France, where it is very much buyer beware.

I have no vested interest as I have never lived in the UK and therefore have no personal or commercial interest in any bureaucracy involved in the conveyancing process. I just buy and sell properties on a regular basis for clients, not for my personal benefit.

[WJT]

I HATE the UK system in regards to the buyer and seller being able to pull out after an offer has been made and accepted. There is nothing worse in my opinion than selling a property in the UK. When we sold a property a few years back we had three buyers pull out. It was one of the worst and most stressful times I can remember, it took over a year because of all of the time wasters and having to take it off the market each time an offer was made. We know of others that experienced this hell in the UK as well.

Having said that, after the horrific waiting for exchange of contracts I much prefer the UK system. In France, as been mentioned it is definitely buyer beware. Hiring a UK solicitor that specialises in French property was a complete waste of time and money for us. You must do your own leg work and try to find out about new builds in the area, adjoining land etc.. because no one will tell you. But even this in France can change willy nilly every five years, so you are never really protected and know what you are buying into like you do in the UK. Not to mention that if you get a bad Notaire like some have even experienced here on the forum, I would imagine it would be very difficult if not impossible to get it rectified in France and don't even mention the forced inheritance rules.

By the way, congratulations Ian!  I assume you sold your beautiful mill house. To sell a house in France and the UK in this climate, incredible. well done![:)]

[Ian]

Thanks WJT - not sold just yet ... but nearly [:)]

So would it be fair to say that:

UK house-selling paperwork is greater than the French. This is a good thing because it prevents innocently naive, or ill thought out, under-researched, poorly-financed buyers from making potentially disatrous purchases that may prove to be costly or a legal nightmare.  The French system is much more "buyer beware".

Can one draw the corollary?: (I realise that tax and real estate law are 2 different topics - thanks)

French business-start-up paperwork is greater than the British. This is a good

thing because it prevents innocently naive, or ill thought out,

under-researched, poorly-financed entrepreneurs from starting potentially

disatrous businesses that may prove to be costly or a legal nightmare.  The British system is much more "entrepreneur beware".

Just following the argument...

[Jacqui Too]

[quote user="Ian"]I can now state that UK house-selling bureaucracy is without doubt the greater (Congratulations Chairman Brown).  [/quote]

I disagree because (follow the link) http://www.completefrance.com/cs/forums/1325951/ShowPost.aspx  numbers 4,5,11,12,18,[;-)][Www]

 

[Danny]

[quote user="dragonrouge"]

OK our Chancellor needs his pennies but in my considered view the house buying process in the UK save of course for all of the pre contract issues now surrounding it is undoubtedly better than here in France.

[/quote]

Just a small point: The house buying process being referred to is really the English and Welsh process. Like the whole legal system, it is entirely different in Scotland. There, it is much more like the French system. Once an offer is accepted, the deal is done.

Danny

[Ian]

[quote user="Jacqui Too "]

[quote user="Ian"]I can now state that UK house-selling bureaucracy is without doubt the greater (Congratulations Chairman Brown).  [/quote]

I disagree because (follow the link) http://www.completefrance.com/cs/forums/1325951/ShowPost.aspx  numbers 4,5,11,12,18,[;-)][Www]

 

[/quote]

Fantastic- glad to have helped Jacqui Too! 

(And you are quite right Danny - my UK house is in England.)

[Madeira Jon]

"I HATE the UK system in regards to the buyer and seller being able to pull out after an offer has been made and accepted."

I understood that this is only the situation in England as I believe that in Scotland when an offre has been accepted then it is legally binding on both parties.

[Sprogster]

What ever the comparative pros and cons of the bureaucracy in buying or selling a house in the UK or France, I would suggest that what is of more interest to the average purchaser are the ancillary costs. In the UK the cost of buying an average house is around 5% of the purchase price and in France the comparative is 15%!

According, to an interesting article in one of the Sunday national newspapers many British purchasers seriously underestimate these costs and end up with a big hole in their budget.

[Mr Coeur de Lion]

[quote user="Madeira Jon"]"I HATE the UK system in regards to the buyer and seller being able to pull out after an offer has been made and accepted."

I understood that this is only the situation in England as I believe that in Scotland when an offre has been accepted then it is legally binding on both parties.

[/quote]

I believe that is right. Same in Australia. Once a contract has been signed and a 5 day cooling off period exercised, the only way the sale can collapse is if any clauses in the contract not being fulfilled, eg building or pest inspection failing or unable to get finance etc.

England should change systems. I don't know why they don't.

[Iceni]

L&R - Do you mean 1 contract as in France ?

The examples you quote would not be valid reasons in England for aborting the deal - such matters should have been resolved prior to commitment - and AFAIK there are very few reasons for pulling out, possibly just death or bankruptcy both of which render the contract unenforceable rather than just "changing your mind".

IMHO the 2 main weaknesses in the English way are

1. an unhealthy obsession with chains

2. incorrect use of the words "bought" and "sold" before a contract exists between the parties. (Perhaps the various Sale of Goods Acts should be compulsory reading)

Both of which are human failings rather than those of the system.

But as I have no intention of buying real property in England it matters not a jot.

John

[woody234]

what is the point of house chains, why cant you have 1 buyer and 1 seller per house or is it a estate agent scam thing

[Judith]

I've always believed that the length of time between offer to exchange in England is where things go wrong.  Along with the English propensity to take a better offer (there have been one or two recent threads on this forum about this), and the general greediness of humankind.  We refused an increased offer from one of our interested parties, once we had said yes to the buyer - but not all are as morally sound as we are.  Chains don't help, but I don't think they are the real problem.  To me, once accepted, even before contract exchange, it is binding in all good faith.  The systems in Scotland and France seem much preferable.  In like manner the English system could allow similar let-out clauses if needed.

[Ian]

Is there anything to stop an English (or Welsh) house seller drawing up a contract and having their potential buyer sign it (adding any suspensive clauses should they wish) when they agree a price, fixtures, fittings and completion date?

I guess a cooling off period would be needed like in double glazing or timeshare sales. But otherwise would that be considered OK?

[Mr Coeur de Lion]

[quote user="Iceni"]

L&R - Do you mean 1 contract as in France ?

[/quote]

One contract. You see the house. You like it. You put your offer in on a contract including clauses (finance, building, pest inspections etc) and sign it. The seller accepts or counters your offer and signs it. This goes back to and fro until the sale price has been agreed*.

Once agreed and everything has been signed, the copies of the contract are sent to both solicitors for them to their bit. Then all being well once all clauses have been satisfied and the council searches have come back ok, normally within 14 days, contract becomes unconditional and generally 7 to14 days later, the sale goes through. Simple. We've actually completed a sale within 14 days, but 30 days is the average.

*although most real estate agents will verbally do this because they are inherently lazy, but technically he shouldn't do that and it should all be on paper.

[woody234]

so what the problem could be is greed, ie person A has excepted an offer for 150k from person B who has the 150k in the bank ready to go then the estate agent rings up person A and says person C wants to offer 160k and advise person A to go for it, so person A turns down person B because hes getting extra 10k but 2 weeks later person C cannot get a mortgage or cannot sell their house 

[Jacqui Too]

I think some of you are missing the point when it comes to buying and selling houses in England and Wales, chains happen because of money! no-one wants to get a bridging loan (and I can't blame them either, I had one the other day for 48 hours and it cost me £265.00) Most people can not move until they have sold their own house. Yes, in an ideal world everyone that puts in an offer will have the money to go ahead with the purchase, but this is not the case.

Unless people are prepared to obtain very expensive bridging loans with no definite length of term or sell their existing house and rent before buying then I think it will be inevitable the the 'chain' situation will continue.

We in E & W have got used to a very fast market, we expect to sell our houses in a very short time compared to the average French house sale, what do people do in France, do they get bridging loans or do they all have clauses that state that the purchase is dependant on their own house selling? and if so how many fall down on this?

Until the E&W market is full of first time and cash buyers we are stuck with chains!