What Are Clauses Suspensives in a French Sales Contract?
Originally posted on & updated on 13th November, 2024
In a recent article posted on our French blog, we explain the importance of understanding what a “compromis de vente” is, or pre-contract, as this is the first step to mapping out the property buying process in France.
As a quick reminder, a “compromis” is the preliminary sales agreement that outlines the terms between the buyer and seller before finalising the sale, “l’acte authentique”. One of the most important components is the inclusion of “clauses suspensives” or suspensive conditions in the “compromis de vente”. But what are they?
“Clauses suspensives” are conditions that must be fulfilled before the property sale can legally go ahead up to completion. If these conditions are not met, the sale is automatically void without penalties for either party, meaning the buyer or seller can withdraw from the deal. Essentially, these clauses are written to protect both parties by allowing them to back out of the contract if certain events or conditions don’t occur as planned.
Common Suspensive Clauses in a “Compromis de Vente”
Mortgage Approval (Obtention de Prêt)
A French property sale’s most common suspensive clause is linked to mortgage approval or failure to get a suitable finance arrangement for the property purchase. The clause will specify that the sale is conditional on the buyer securing a loan by a specific date. If the buyer cannot obtain the necessary financing, they can withdraw from the agreement without penalty. French banks have a reputation for having strict criteria for international buyers and investors. To save yourself a lot of time and hassle, ensure that you are prepared and have conducted your research thoroughly. To learn more about financing a property purchase in France, simply fill out the mortgage enquiry form, and our overseas mortgage experts will contact you promptly to discuss options for your project.
Pre-Emptive Rights (Droit de Préemption)
In France, certain bodies like the local municipality (la Mairie) or the SAFER may have the right of first refusal on property purchases, for example, when they come with land. You may become aware of this organisation if the property exceeds one hectare of land (over two acres). The SAFER can intervene to purchase the property, citing its potential benefits for local agriculture and farmers. This means the commune (or local council) can purchase the property at the agreed price. If this right is exercised, the sale cannot proceed, the “compromis de vente” becomes void and your deposit will be returned to you.
If you are buying a property with a couple of acres of more, ask about SAFER to your estate agent or legal representative. Most French Notaires aim to clear this legal hurdle at an early stage by submitting a special request to accelerate the process, at an extra cost.
Property Survey and Inspections
In some circumstances, the buyer may decide to include a clause allowing for a building survey or technical inspection to take place and be undertaken by specialists and surveyors in France. This clause ensures the buyer can assess the property’s condition (e.g., checking for structural integrity, condition of the roof, termite infestations, or asbestos). If the experts’ survey reveals significant problems, the buyer can then decide to cancel the sales contract.
Planning Permissions
If the buyer intends to carry out significant renovation work or extensions, a planning permission clause may be added in the “compromis de vente”. This clause states that the sale is contingent on receiving approval from the local authorities for specific construction or modification projects. Failure to obtain such permissions from the local authorities would void the sale. In “real life”, and depending on the project, we recommend using the services of a French architect with local knowledge and contacts; they can sometimes help to fast-track building permits.
Sale of Another Property
If the buyer needs to sell their current home to fund the new purchase, a “sale of property” clause may be included in the “compromis de vente”. This allows the buyer to withdraw if their existing property isn’t sold by a certain deadline. Some vendors may be hesitant about this clause and could potentially refuse to sign the pre-contract. Ensure you have discussed this condition and terms with the sellers, and both parties understand the potential for a delayed completion date.
Legal Framework and Timelines
Once both parties have signed the “compromis de vente”, a 10-day cooling-off period begins, during which the buyer can legally back out of the sale without providing any reason. However, beyond this period, the buyer and seller are bound by the contract terms unless one of the suspensive clauses listed applies.
If all the conditions outlined in the clauses suspensives are fulfilled, the sale proceeds to the final step — the “acte de vente” (deed of sale), where the property officially changes hands after signature at the Notaires’ office.
Special Consideration for “Monuments Historiques”
In France, Monument Historiques, such as listed châteaux, estates, mansions and properties with a significant history, have their own set of challenges. Renovating, modernising or restoring a classified property often requires special permits and approvals from authorities such as the DRAC (Direction Régionale des Affaires Culturelles. A suspensive clause may include obtaining permission for any work on such historic properties, and failure to secure this approval could terminate the purchase agreement.
Buyers and Sellers Protection
Incorporating clauses suspensives in the “compromis de vente” is crucial to ensure that both parties are informed and protected during the entire purchase process. These clauses allow for flexibility, mitigating potential risks and providing an exit strategy if essential conditions are unmet. For real estate and properties with additional complexity, such as those listed as “Monument Historique”, it’s even more important to account for these stipulations and conditions in the sales contract.
As Always, Research is Key
Being aware of these different clauses and their legal implications is key to concluding a successful property purchase in France. It is essential to consult with a legal professional to ensure that all necessary clauses are included and that both parties understand their rights and obligations, especially for chateaux and estates.
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