Many would think that would be a notaire that draws up the preliminary sales contract or Compromis de Vente. but in most cases it is in fact the agent immoblier.
The notary or notaire will not become involved until this very important contract is in place.
The Compromis de Vente is a legally binding contract between the vendor and the buyer of a property. The vendor and the buyer both sign this contract at the agreed price. A deposit is paid (normally 10% of the purchase price).
The vendor is committed to the sale as soon as the comromis de vente is signed, however the buyer gets a 10 day cooling off period to reflect on their decision.
Once the compromis de vente has been signed by both parties the agent immoblier will send a copy by registered mail to the vendor, buyer and to the notaire.
What is the Compromis De Vente?
The Compromis de Vente (Promise of Sale) is a written document between buyer and seller that contains a number of contracts or ‘conditions suspensives’. If any of these conditions can’t be met, then the deposit which is usually held in ESCOW is refunded.
The deposit is normally 10% but can be between 5 and 10%. If any of the clauses cannot be met the the deposit will be refunded.
The compromis de vente between two private parties is valid for 18 months. It is only when in extremely rare circumstances that this period is exceeded must they call on the period of a notaire.
Since 2008, the Compromis De Vente can be in electronic format, with the signatures placed on a computer. “electronic writing has the same probative value as writing on paper” – article 1366 civil code
Advantages and Disadvantages of the Compromis de Vente
In the UK we do not have a commitment to buy a property. Other buyers can at any stage jump in and place higher offers and out-bid a potential buyer. It’s a cut-throat market.
Unfortunately, financing on property can have issues. Once a Compromis de Vente 10 day cooling of period has expired there are only a few exceptional cases when commitment to buy can be broken and it may come at a cost.
For some this level of commitment comes very early in the buying process. However, it does have many advantages. It does mean that the only society that came step in on the purchase from this point on is SAFER. Your offer has been accepted and is legally binding. The only thing affecting hoe much you are going to pay is exchange rate.
10 Day Cooling Off Period
The day cooling off period starts when the buyer confirms the receipt of a registered post letter at his home address. The enclosed letter will have the fully signed ‘compromis de vente’ and any signed builders reports etc.
The seller cannot pull out of the ‘compromis de vente’, however the buyer can pull out in the first ten days without giving a reason.
Once the cooling off period has expired, the deal is done and the buyer can only pull out under fairly limited circumstances.
After the 10 Days Cooling Off Period Has Expired
Scenario 1 – Cash Buyer
Luckily, for cash buyers the price has been agreed and the the only people that can now step in and break the sales process are SAFER. They are a rural agency that have the right of pre-emption (droit de préemption) on most rural property, in the first 2 months of a ‘compromis de vente’.
It may be possible to add a ‘condition suspensive’ to the ‘compromis de vente’ in the event that SAFER step in that enables a faster refund of the deposit from ESCROW.
Scenario 2 – Mortgage Buyer
Obviously disputes arise regarding the refund of deposits. When mortgage funding is rejected a contract to buy a house has already been signed. At every stage through the whole mortgage application process, it is imperative the all documentation is kept. The buyers must be able to prove that they jumped though every possible hoop trying to get funding. If the mortgage applicant can prove that every avenue has been pursued then hopefully the 10% deposit should be refunded. It may be possible to add a ‘condition suspensive’ to the ‘compromis de vente’ to enable the buyer to pull out in the event that finance is not available. Any refund application will need to be accompanied by a letter from a French bank stating finance was unsuccessful.