The compromis de vente may only be regarded as the preliminary contract, but its importance must not be underestimated, says Barbara Heslop of solicitors Heslop & Platt.

If the sale and purchase has been negotiated by a local French estate agent, very often it will be the agent who prepares the compromis de vente. The notary will not become involved in the transaction until after a binding contract is in place.

The seller is committed to the sale as soon as he has signed the contract, although the buyer is given a 7 day cooling off period in which to reflect on his decision.

The 7 days run from the day after receipt by the buyer of a registered post letter enclosing a copy of the signed contract sent by the agent or the notary to the buyer’s home address. This letter should only be sent once all parties have signed.

The compromis de vente is signed very early in the conveyancing process; much earlier than many UK buyers may be ready for. Once the cooling off period has expired, the deal is done and the buyer can only pull out under fairly limited circumstances.

The contract will include a number of conditions which must be fulfilled before the sale can be completed (conditions suspensives). If any condition cannot be fulfilled the contract will be cancelled and the deposit paid by the buyer (normally 10% of the purchase price) will normally be refunded.

Occasionally disputes arise regarding the refund of the deposit to the buyer. However, provided the contract has been properly and carefully drafted and as long as the buyer has complied with any conditions included in the contract which required certain action from him (such as a condition that the buyer will apply diligently for a mortgage offer), then the deposit should be refunded.

The most important condition from the buyer’s perspective is often the one relating to finance. If a buyer needs to obtain a loan (either in France or in the UK) in order to fund the purchase, it is essential that this is included as a condition and that care is taken with the inclusion of precise details of the loan required. This condition will then allow a buyer to withdraw from the contract without penalty if raising the finance proves impossible. The buyer will however have to provide a letter of refusal from the French bank (s) to prove he did try to obtain the finance and was unsuccessful.

You can avoid costly mistakes by taking independent legal advice from a UK based specialist lawyer prior to signing the initial contract. Pitfalls do exist for the unwary or the uninformed!

Barbara Heslop
Principal
Heslop & Platt
Solicitors & French Law Specialists