Thursday, March 25, 2010

Tighter rules for syndics

The French government has just issued new rules for the operation and management of 'syndics' - the professional building managers who look after multi-occupancy properties on behalf of their co-owners, such as blocks of apartments or private estates.

The emphasis of the new regulations is on greater transparency in relation to the financial management of the building, including right of access to documents such as estimates and invoices received for building and maintenance, and clarification of management charges. The new law also forebids demands for additional payments for information such as a copy of the syndic rules, building plans and explanation of the maintenance charges - all information that would typically be requested by someone considering buying a property in the building.

The changes reflect the government's concern about criticisms of some professional syndics that have been widely expressed on French television and in some consumer magazines, in particular relating to the activities of several syndic organisations which have recently become subsidiaries of major finance and banking groups.

Source: Arreté 19 March 2010 modifying that of 2 December 1986, JORF 21 March 2010 p 5673.

Wednesday, March 24, 2010

Buying older properties in France

Many British and Irish buyers seeking a principal or second home in France are sometimes attracted by the idea of buying an older property that they can 'do up', perhaps with the assistance of family and friends, and if necessary a professional builder. The process is not without its problems.

Major building works including external alterations and extensions are invariably subject to French planning consents, and in the case of buildings sited within an area of historic interest, will require approval from the architects at Batiments de France (roughly equivalent to organisations such as English Heritage). Planning permission may be subject to restrictions such as height, dimensions, type of materials to be used and colour schemes, to name but few. All building and alteration works above 170m² require the services of a professional architect, and is advisable in most (older) buildings even below this size.

The initial survey, paid for by the vendor, may indicate the presence of lead, asbestos, and termites, as well as the condition of heating and electrical systems, gas installations and thermal efficiency. All these may have a bearing on the price you are prepared to pay.

In the case of older buildings, common problems can include damp; uneven floor and wall surfaces; lack of right angles (for example if you are installing a fitted kitchen). The electrical installtion is unlikely to conform to current normas and may have to be renewed, bearing in mind that French wiring relies on separate circuits for items such as hot water, cooker, heating, lighting etc which emanate from and return to the central distribution panel and fuse box. The French do not use the 'ring main' system.

Heat and sound insulation may require improvement, particularly in the case of parquet floors resting on wooden beams in many typical older village houses, as well as more recent (1950s onward) precast concrete structures, where noise transmission levels can be a deterrent, particularly in apartment buildings. In many cases there may be no double glazing, with heat lost through drafty ill-fitting window frames.

It is certainly prudent to have a professional survey done before committing to purchase, and if possible get some idea of likely renovation costs. In practice, fully renovated older homes can cost little more than those requiring work, provided the improvements have been carried out by approved French artisans, and are to your taste. It is a truism that homes that have been renovated by their owners, and are accordingly offered without guarantees, are extremely difficult to sell, should the time come for you to move on.

Thursday, March 18, 2010

French Property News March 2010

In this months issue I talk about the various ways in which you can do business in France, starting with the recently introduced and relatively simple self-employment regime known as 'auto-entrepreneur'. Under this scheme, which has proved extremely popular since its introduction in January 2009, tax and social contributions are paid quarterly, based on a fixed percentage of the income actually received by the business, rather than on notional amounts applied under some of the other business regimes (which can prove to be a burden for new start-up enterprises).

I also look at the different types of French limited company, including the SCI which is a special arrangement to enable different members of a family or a group of friends to jointly buy a French property. There is also a summary of the general business rules and regulations, as well as some curious anomalies.

French Property News is available on subscripton or see

Tuesday, March 9, 2010

Checking your 'syndic'....

Co-ownership ('co-propiété') properties in France are similar to the American style condominium, where residents own their apartment or villa, and in addition have a share in the property's common parts - corridors, staircases, lift, gardens or grounds if they are present. Such properties are usually managed by professional organisations known as a 'syndic' which is appointed by the residents, usually through a residents' committee and the annual meeting of the co-owners.

A number of recent articles in French consumer magazines have been highly critical of some professional syndics, particularly those belonging to large groups such as Foncia (part of Banque Populaire). Specific complaints include high administrative charges, and the recent costs associated with bringing passenger lifts up to the new standards required by the French government. A typical eight-storey apartment building in my region would pay around 80,000 euros for replacing the lift - the cost borne by the residents in proportion to the size of their apartment and the floor level on which it is situated.

Residents however have been fighting back, sometimes appointing outside specialists to examine expenditures, check that competitive estimates have been secured before any work commences, and vetting income and payments. In some cases, syndics owned by large conglomerates have been sacked by the residents in favour of smaller, local firms who have effectively cut back on management costs.

If you are considering buying a co-ownership property, such as apartment, you should ask to see the minutes of recent AGMs, to check what expenditure is anticipated and what are the standing maintenance charges. Particularly high cost items are outside painting ('ravalement'), interior decoration, and lift maintenance or replacement. Buildings with extensive grounds and amenities such as a pool or tennis court will naturally attract higher annual charges than, say, a small building divided into flats.

As an owner you have a right to attend and vote at the annual general meeting, and if your French is up to it, you could consider putting yourself forward as a member of the residents' committee ('conseil syndical'). At the very least, you should exercise your right to vote, which can be done by proxy if you are not free during the months of July and August when most AGMs seem to take place.

Monday, March 8, 2010

Selling a tenanted property

Selling a French property with a tenant in place is not quite as straightforward as offering you house or apartment with vacant possession on completion.

There are few circumstances in which you can ask your tenant(s) to leave, for example unless you require the property for your own use or for a close member of your family, or if you need to undertake urgent building works. Tenants occupying your property as their main or principal home or who are of advanced years have additional protections under French law.

If you decide to sell, you must offer your tenant(s) first refusal to buy the property, at market value, and giving at least six months notice in advance. Tenants are allowed a period of reflexion, as well as additional time to secure a loan or mortgage if required.

If you are selling a property with tenants in place (and they do not wish to buy), then you need to agree with them reasonable times during which prospective buyers, agents etc can visit the premises. Evenings, weekends and holidays may be excluded, and tenants may insist that visits are by appointment and only while they are present in person.

Failure to reach an agreement can result in tenants becoming obstructive and making visits difficult, sometimes to the extent that agents aware of the difficulties of viewing the property may refuse to take it onto their books, or are geneally relucant to offer it to prospective purchasers.

However, buyers looking for a longish term investment with a secure income, should not be discouraged. Studios and smaller apartments generally have a higher occupancy turnover (and suffer more wear and tear) than, say, larger three and four bedroom properties occupied by families, who are seeking long term stability.

Prospective purchasers should take advice about the potential rental markets - short, long and medium term; seasonal etc - in the locality where they are thinking of buying property.

Thursday, March 4, 2010

French property sales up but property shortage

Recent discussions on one of the French property forums ( and in the British press have highlighted the fact that suddenly and to many people's surprise, the French property market appears to have picked up during the first few weeks of 2010, with the notable return of British buyers to southern France and the Mediterranean.

In a curious twist however to this encouraging news, several of my local estate agent colleagues report a dearth of correctly priced, good quality houses and apartments. Some have even been unable to locate suitable properties for serious buyers, with upwards of 400,000 euros to spend.

It seems that many vendors have simply withdrawn their property for sale, while the market was slow and in anticipation of a revival in 2010. Prices have however not fallen significantly and many French vendors are still reluctant to spend money presenting their property for sale - a process that can cost as little as two or three per cent of the sale price and dramatically improve their chances of attracting a buyer.

Finding the right property may take a little longer, as buyers becoming increasingly discerning in their choice.