Thursday, October 15, 2009

Power of attorney - when to use?

Questions are sometimes asked about when is it possible to sign French property purchase documents using a power of attorney - and whether it is okay to do this at the time of the pre-contract ('compromis de vente').

In replying to this question recently on a French discussion forum, I cautioned against using a power of attorney at the time of the 'compromis de vente'. This document is very much the key to the property purchasing process, as it sets out the terms and conditions under which the buyer will buy, and the vendor will sell, the property in question. It is in a sense an 'agreement to agree' (not strictly recognised in English law) and the final sales act signed on completion will include all the elements that appeared in the initial 'compromis'.

The 'compromis' can also include a number of conditional clauses (known as 'clause suspensives') agreed between purchaser and vendor, and if any one of them is not fulfilled, the purchaser can withdraw from the transaction. Typical 'clauses suspensives' include buying subject to a survey, subjet to planning permission or subject to the buyer obtaining a bank loan or mortgage.

It is important that the purchaser fully understands what he/she is signing and it is wiser to go through the document in detail and in person with the agent handling the sale or the French Notaire who will oversee the transaction. Simply having the 'compromis' translated and explained by a third party - such as a UK based lawyer - is in my view of limited value, and not an effctive substitute for having someone in place who knows the property and may be aware of elements that may not appear on paper.

Clearly the potential buyer should visit the property and its vicinity and be satisfied as to what he is buying - you buy a French property in the condition in which you find it. That said, advice and guidance given on the spot can often be of more value than a precise translation of a written document that is presented to you for signature.