From the Vault
Viager With A View Part II
To get up to speed, you can read Part I. If you’re already there, pour yourself another glass of wine…
This takes us to just after the homeowner’s association meeting where they voted to leave the two terraces intact, but vowing to work toward getting them legalized by incorporating them into the title deeds of each of the apartments the next time they transferred hands.
With the help of the Syndic, I learned that the apartment had several pieces to it: the apartment itself with its large terrace, two cellars, a storage closet and a “chambre de bonne” (servant’s quarters). It was curiously in the hands of the State — that no one actually held the deed. In bits and pieces I’ve come to learn that 18 years ago, aged Monsieur N. had sold it to Monsieur S. as a life annuity, continuing to live in it, holding the rights of usage till his death.
Unfortunately, Monsieur S. died about eight or ten years later, and as I understand it, although all the details have yet to be revealed, left it with taxes to be paid, his heirs not wishing to take on the responsibility. Monsieur N. was no longer living in the apartment. The utility bills, taxes and association fees were being paid, but his whereabouts were unknown, at least not by me.
(Do you know about the case of Jeanne Calment? She was the oldest living human, who lived to the age of 122 and outlived her Notaire, Andre-Francois Raffray, who purchased her apartment, promising to pay $500 per month until Jeanne died. He paid twice the market value for the apartment before dying in December of 1995. Let’s hope I won’t have the same bad luck!)
This forced the property to land in the hands of the State, in care of the “DNID,” or “Direction Nationale d’Interventions Domaniales,” which is part of the National Taxation Administration and works in three principal areas of activity: asset management (more than 6,000 estates handled), sales of personal property (more than 50,000 lots sold each year) and real estate (nearly 500 properties sold) and estate appraisal assignments (5,000 appraisals in Ile de France alone).
I contacted the DNID, dealing with one lone individual, a “fonctionnaire” (civil servant) who didn’t care about me or the property, seeing it more as a nuisance than a reason for him to be paid a salary. My Notaire, Maître A., prepared an offer letter stating a price we thought would be possibly accepted. Over a period of many months, with long awaited absences of response from the DNID, and finally on the third try, each offer a little more, an offer was accepted — a price about one-half of what we estimated it was actually worth, were it not a Viager!
This began the usual process to purchasing a property. The Notaire began to secure all the documents in preparation for the signing of a “Promesse de Vente” (Promise to Purchase). There are diagnostics required by law the seller must provide: content of termites, lead and asbestos as well as measuring the apartment for the “Loi Carrez,” the legal habitable space. Because there was actually no one residing there, it was impossible to enter to perform the diagnotics, and so I agreed to purchase the apartment and all its parts without any proof of its condition and without seeing any of the parts. This is something I’d never recommend to a client to do! (Even now, I have not yet seen either of the cellars or either of the auxiliary rooms — only the studio apartment itself.)
The Notaire ‘tore out his hair’ dealing with the fonctionnaire at the DNID, but finally they gave Maître A. the proxy to sign on behalf of the State…all this after 1.5 years of push and pull, it came time to sign the first document — the Promesse de Vente.
When reviewing the document with Maître A., the terrace had clearly been excluded, only listing the apartment, the closet, the chambre de bonne and the two cellars. I asked him to write the terrace into the deed, as Monsieur de L. would have wanted, to which he replied as he was smiling broadly, “Now, why would you want me to do that? No one can enter the terrace without going through the apartment, so even if you don’t own it, you will have full and private usage of it, without the maintenance expense of it, which will be provided by the homeowner’s association.” Knowing Monsieur de L. would be displeased, there was not much to do, but sign the document happily.
Meanwhile, I contacted my lender for a mortgage, Banque Patrimoine et Immobilier, who holds the mortgage on my other properties. This was by far the easiest part of the process, even though it is a long and hard journey to secure all the necessary tax returns, bank statements, medical exams, etc. required for the lender to assess a borrower’s capability to repay the loan. The high rental returns from my rental apartment, “Le Provençal,” made a big impression on the loan officers, illustrating the potential of this new property to yield a good income…that is, if it weren’t a Viager!
The lender gave a thumbs up to the project a loan offer was issued. The obligatory 11 days were waited before accepting the offer and the date of signing the final “Acte de Vente” (final title deed) was confirmed for September 7, 2007, three months passing after signing the Promesse de Vente.