Discovering Preemptive Rights

Discovering Preemptive Rights


PARLER PARIS: PARIS PROPERTY INSIDER


Enhanced web-edition online at:
/parlerparis/property


November 7, 2002


Dear Paris Property Insider Reader,


A special note: A reader recently chastised me for what they perceived
as a negative slant and seemingly impossible hurdles to overcome
concerning property in France. It is not my intention to paint a
negative picture. There are a lot of differences between the system
here and in other countries. Our job is to inform and educate you about
those differences. While I can understand how the articles may seem
negative, it is important for you to know about and understand the ins
and outs so that when you come to France to make your property
purchase, you have a positive experience. That is our intent and goal.
On with today’s "negative" topic…


In a similar way that French inheritance law mandates certain people
have rights to your property when you die, the "droit de préemption"
(right of pre-emption) mandates certain authorities and parties have a
right of priority to purchase property over a potential buyer. There
are basically four ways in which the right of pre-emption may be
exercised.


1.) The first right of pre-emption, "droit de préemption urbain," is
that of the "Commune," or neighborhood, where the property is located.
The Mairie’s office (city hall) usually exercises the right where the
property or land is required for development purposes including public
works, community facilities, etc. The "Notaire" (property attorney) in
charge of the sale of the property draws up a "declaration d’intention
d’aliner" (DIA) notifying the Mairie of the sale. The office has two
months to reply.


If the Mairie does not intend to exercise its right, it can either not
reply or send the DIA back with the comment "droit non exercise" (not
exercising the right) or "droit n’existe pas" (the right doesn’t
exist). If the Mairie exercises its right of pre-emption the seller has
three options: withdraw from the sale and keep the property, accept the
Mairie’s offer at a lower price, or maintain the asking price and let a
judge fix the price at which the Mairie purchases the property (the
Mairie will usually offer to purchase the property at a lower price
than the price indicated in the DIA).


2.) A tenant holds the second right of pre-emption. The landlord is
required to send notification to the tenant of the intended sale. If
the tenant wishes to buy the property he or she has two months to
complete the purchase, or four months if a loan is required. If the
landlord sells the property without notifying the tenant or sells the
property at a lower price, the tenant can, within one month following
completion, take priority over the purchaser.


3.) The third right of pre-emption is in relation to rural areas. This
may not concern most of you, but I mention it here because we’ve had a
number of readers express an interest in property in the countryside.
In this situation the farmer and the "Société d’Aménagement Foncier et
Etablissement Rural" (agricultural commission) both have a right of
pre-emption over land or property. The process and regulations are
similar to the droit de préemption urbain.


4.) The fourth right is granted to a "co-indivisaire" (joint owner) of
jointly held property. If one of them sells his/her share, the other
"indivisaires" have a priority right to purchase the share. The seller
serves an official letter on the other indivisaires. They have one
month to answer. If they wish to purchase the share they must do so
within two months.


There are some properties which the Mairie, a tenant, or a farmer
cannot purchase because they do not have a droit de préemption:


* A Mairie cannot exercise its right if the "règlement de copropriété"
(establishment of the condo association) have been registered for more
than 10 years, if the sale of the property has been completed for less
than 10 years, or if the property is to be built in the future.


* A tenant cannot pre-empt a sale taking place between members of the
family closer than the "troisième degré" (nieces, nephews, uncles).


* A farmer cannot pre-empt a sale taking place between members of the
family closer than the "troisième degré".


So, what does all this mean to you as a seller or a buyer of French
property? The consequences of the droit de préemption are that you as
seller may not be able to sell your property to whom you want at the
price you want. You as buyer may be forced to let the "préempteur" buy
the property (you would be entitled to recover all deposits made to the
estate agent or the Notaire).


In reality, pre-emption rarely occurs, but is an issue to be aware of.
The moral, once again, is to be as informed as possible about the
intricacies of the French real estate system and hedge against any
unforeseen problems.


A bientôt,


Schuyler Hoffman<
br> Editor, Paris Property Insider
E-mail: mailto:propertyinsider@internationalliving.com


P.S. Toward the end of every Paris Property Insider you’ll find details
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*** OPPORTUNITY FOR THE FUTURE


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Not only can you buy property in France, you can obtain financing here
to buy that property. Our IL Paris office has associations in place
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* Fee of $75 an hour with a two-hour minimum, plus expenses (travel,
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* Consultation can be arranged in person, by phone, or e-mail.


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*** DO YOU HAVE AN APARTMENT IN PARIS OR HOME IN FRANCE YOU WANT TO
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