Tuesday, June 30, 2009

Property buying: the notaire



Every French property transaction involves the intervention of a notaire whose costs will add up to 7 or 8 per cent of the value of the sale. Of this figure about 70% goes to the government in taxes and land registration charges, and the remaining 30% or less is the notaire's actual fee.

French notaires have a dual role. Not only do they ensure the legality of the property transaction and that it fair to both parties, but they also act as government agents, collecting the taxes raised on the sale. These can include capital gains tax, which for example is charged on properties that are not your principal residence and owned by you for less than 15 years. They also act as stakeholders for any monies paid, such as deposits, which are held in special government controlled trust accounts which do not attract interest.

They are also responsible for allocating the sales proceeds to the various owners in a cases of joint ownership under typical situations such as an inheritance, partner divorce or separation, or even a bank or mortgage company if the owner/vendor has outstanding payments due.

Their conveyancing role includes checking that the owner has good title to the property (ie that it is his to sell), verifying that the expertises (property checks) have been carried out, and ensuring generally that there are no unpleasant surprises such as an ancient right of way or a charge on the property.

How far a notaire will go in advising the parties is debatable. He certainly does not act as the advocate of one or either of the parties, even if you choose to appoint your own notaire in addition to one acting for the vendor. In this respect his role is unlike the adversarial stance that might be taken by a British solicitor acting for you in a property transaction.

Some buyers consider using a home-based lawyer or other expert as an advisor. However, even someone with a knowledge of French law who is not on the spot, can do little more than check the various documents and advise on their implication.

The notaire's greatest advantage is that he is in place, knows the area and the local property market, has handled umpteen transaction, is used to resolving proplems, is totally impartial and is bound by a strict code of practice.