Cooling Off Just Got Cooler

One task I had while ‘on vacation’ in the South of France was to sign a sales contract on behalf of our clients purchasing an apartment in Villefranche-sur-Mer overlooking the beautiful port with a view of all of Cap Ferrat. The views from the apartment are breathtaking — and it’s easy to see why our clients fell so madly in love with it.

The signing of a pre-sale agreement was horribly delayed — thanks to the new ALUR laws which require more documentation in advance of the signing of the pre-sale agreement in an effort to protect the consumer. This created an opportunity to go ‘straight to’ signing the Acte de Vente (deed), but by building in the traditional seven-day “cooling off period” (délai de rétractation, article L 271-1 of the French Code de la Construction et de l’Habitation) within which a buyer can retract his purchase with no reason and no ramifications prior to the signing.

Only a few days prior to the scheduled signing on August 17th, consumer protection in France raised the bar for the seller and lowered the bar for the consumer. Without much warning, buying and selling a property in France just got a bit tougher, thanks to a lengthening of the “cooling off period” in effect as of August 8th. Until now, a buyer had seven days from the signing of the pre-sale agreement, but thanks to the Loi Macron (named after Economy Minister Emmanuel Macron), that period has been extended to 10 days. Senators wanted to make it 14 days, but industry professionals became fearful of the negative results on the market and lobbied against it. A compromise of 10 days was achieved.

Now that three additional days has been added so that a buyer can reflect on his purchase before making a final commitment, both buyers and sellers are frustrated with the lengthy process. We have personally seen both pull out from a project as a result.

The signing of the Acte de Vente on August 17th for our clients couldn’t take place as planned while I was in the South thanks to the change in law and new dates must now be settled on…however without me present. Industry professionals have commented that the extra time isn’t required and is rarely used by the buyers. This is particularly true now that there are additional delays to signing the pre-sale agreement (the ALUR laws).

The 10-day count starts from the day after a registered letter is received notifying the buyer of the conclusion of the signing of the pre-sale agreement by the Notaire. Holidays are not considered unless the 10th day falls on the holiday and then the deadline is extended to the next business day.

If you wish to retract your purchase, you must withdraw by issuing a registered letter to your Notaire or agent, however, no specific reason is required and your deposit will be returned (within 21 days of receipt of the notice of withdrawal). The seller cannot retract the sale, however, while the buyer holds the power.

When a buyer retracts the purchase at this late stage of the game, it means that all of the efforts of the agents, agencies, sellers, Notaires, etc., are totally lost without remuneration. No one is happy and we would encourage our clients to consider their purchases seriously.

Another one of our buyers in Villefranche-sur-Mer exercised her right to retract her purchase due to the unusual delays. This is a perfect example of the potential negative effects of what I believe is ‘over consumer protection.’ Her reason had nothing to do with time enough to reflect — but more to do with frustration at the heavy administration and losing valuable summer time in the property while every T was being crossed and every i being dotted.

Fortunately for you, this may put the property back on the market and available for purchase by some lucky person (we await a confirmation by the seller) — now with all the documentation ready to go for a quick sale.

If you are interested in properties in such a prime location with such stunning views of the Riviera, contact us to start your search and let us handle the administrative entanglement for you!

A bientôt,

Adrian Leeds

Editor, French Property Insider

(on vacation in Nice, 2015)

Email: [email protected]

 

P.S. Let us help you find the perfect apartment for long-term living. Visit our Long-term Apartment Rental page tpday or contact us at [email protected] for more information.