Saturday, October 17, 2009

A tenant's right to buy or 'pre-emption'

If you own or are thinking of buying a French property that is occupied by a tenant, then you need to be aware of what rights the tenant has to buy the property he/she occupies.

A tenant can at any time ask the owner if he can buy the property. The owner can refuse and even sell the property to another person, who will inherit the tenant and any existing lease. But in three situations, the tenant has a right of pre-emption:

(1) When the owner informs the tenant of his intention to sell, by sending a notice 6months in avance and proposing a price. The tenant has then 2 months in which to respond, 4 months if he has to arrange a mortgage or loan.

(2) When a property, typically an apartment is first incorporated into a co-ownership arrangement, and the lots are first offered to the existing tenants.

(3) When a building of more than 10 apartments is sold en bloc or split up. In the latter two cases, the sitting tenant has 2/4 months to respond, otherwise the apartment is sold 'occupied' by the tenant as before.

In all three cases, the owner cannot by law sell to a third party at a price less than that offered by the tenant.