Friday, June 28, 2013

Selling privately? Precautions you should take.

One of the hazards of putting your French property on the market privately is that you thereby invite anyone and everyone to come and view your home. Here are a few precautions you should take.

- Do not trust anyone simply because they say they are interested in buying your home. It is well know that con-men and worse use private For Sale signs and adverts as a means of gaining entry into the homes of vulnerable people.

- If you advertise in the press or on line, and receive phone enquiries and requests to visit, gather as much information as you can about the would-be purchase - full name, address, phone number (preferably a landline not a mobile) when making an appointment to visit. 

- Never receive visitors alone, have your spouse present, a relation, neighbour, friend with you.At the very least alert a friend or neighbour close by, saying you will call them immediately after the visit. Immediate neighbours can also be your eyes and ears - for example, noting down a car registration number.

- If you have a For Sale sign outside your house, be particularly careful with unannounced visitors. If you are alone and in any doubt, do not answer the door or say you are expecting a visitor by appointment and the ask the caller(s) to come back later by appointment. At this point, take their details as noted above and if possible their car registration. You can then arrange a visit when someone else is with you.

- Do not be afraid to ask for the above information. Potential buyers who visit estate agents will hav their identiy and other details checked (including their ability to pay!) by the negotiator , and visits will be logged on the computer. These are essential precautions used particularly when negotiators accompany visitors to a remote or empty property. They are also used to fill-in the 'bon de visite' which the visitor signs as proof of being shown the property by the agent. (Many properties are advertised with more than one agent so this is an essential procedure to avoid later disputes).

NOTE: I recently posted the above information on the FrenchEntree forum following a press report of a young woman reported missing after advertising her property for sale and receiving a visitor. At the time of writing there is no further news of her wherabouts. The post was universally applauded by members of the FrenchEntree forum as sound advice.

Monday, June 17, 2013

The time to sell is NOW?

Right now could be the best time to put your property on the market, if you are trying to sell your main or principal home - that is, not subject to capital gains tax, as in the case of a second or holiday home in France.

Last night, unveiling yet another plan to 'stimulate the property market', French president Franois Hollande announce that there will be a special reduction in the capital gains tax levied on sales of second homes, but only for the year 2014. Why wait, you may well ask, in addition to his proposed changes (this autumn?) on the length of time you have to own a second home before you can sell it without a CGT charge - recently increased to 30 years, formerly 15 and to be settled by Hollande at 22...later this year.

There is good news in all this for owners of principal homes (main residence in France) who are anxious to sell now, perhaps to down-size or even return to the UK. The Hollande announcement is bound to encourage second-home owners to withdraw their properties from the market, until 2014, in anticipation of a better CGT deal. While any gaps in the market can be filled by principal-home owners not subject to CGT on sale.

It is rare that one can truthlly assert that now is a good time to sell, but I think this may be the exception. 

Saturday, June 8, 2013

Rights of pre-emption

Many French communes, as part of their powers over building planning and use of land, have certain rights enabling them to buy a property that is offered for sale, in precedence over a normal acquirier (whether an individual or an enterprise, charity or similar). This may come as a shock to vendors and can cause delays and other problems in conclusing the sale.

One of the first things that the Notaire handling your sales transaction will do - once the initial sale contract (compromis de vente) has been signed by both parties - is to notify the local Mairie of the proposed sale/acquisition and obtain confirmation whether or not the Mairie intends to invoke its right of pre-emption. The Mairie must respond within two months, which explains why completing the transaction can take some time, but in the vast majority of cases the response is negative, and the same goes ahead normally.

If the Marie chooses to exercise its right to buy, it must prove that the purchase is in the interests of the local community, particularly as public money from taxation is involved. Typical purchases can include land or buildings needed for development - a road scheme, extension to an existing public building or other similar public need.

When it comes to price, this should normally be the agreed 'market price' after valuation by experts (such as an estate agent) and the vendor may accept or not the price offered by the Mairie. At this stage, both parties enter into negotiation but if this fails the Mairie may press for a court judgement. All this can take time as delays - usually of a maximum of two months - are often over-ridden.

Vendors caught on this (rare) situation should remain calm but determined, and try to reach an agreement by neogitation and only in the final resort proceed to litigation. That said, Mairies have been forced to pay the market price and in some cases their efforts to pre-empt a sale have been ruled as illegal by the courts. You CAN fight city hall, as the Americans say.

I shall be writing a fuller article on this issue later in the year for French Property News.

Monday, June 3, 2013

You and your syndic

If you live in a typical French apartment building or in some cases an enclosed estate comprising a mix of villas and apartments, it is likely that the complex will be managed by a professional organsiation, known as the 'syndic'. They charge fees for their services, which are collected from each occupier according to the size of their apartment or villa.

The syndic can be either the property management division of a local estate agency or increasinly an office of the one of the specialist companies such as Foncia or Nexity, which are in turn owned by major banks and financinal institutional. A recent consumer report has criticised a number of syndics for over-charging, poor management, lack of communication and in some cases outright fraud. How can you guard against such excesses?

The first point to note is that residents have the right to dismiss and appoint the syndic, a decision which can be voted on at the annual general meeting of all the residents. If you have a strong residents committee, one of its tasks will be to keep a close watch on expenditure, both on management fees, and building maintenance costs and necessary repairs. As the consumer report noted, where there is no strong representation by residents - often in very large complexes - abuses can go unchecked.

As a resident you have a right to vote on all issues, your vote depending on how many shares you have in the complex (according to the size of your property) and if your French is up to it, you could consider taking a more active role by joining the residents committee. At the very least, you should study carefully the agenda for the annual meeting, describing what issues are to be voted on, and either attend or appoint a fellow resident as your proxy, with the power to vote on your behalf.

If you are buying into a complex that is managed by a syndic, your estage agent or Notaire should provide you with copies of recent decisions by the syndic, so that you can check for any major expenditure that may have been voted, and the cost of which you may inherit.

Major cost items can include interior and exterior painting, lift maintenance and repair, the salary of a concierge if resident on site, maintenance of grounds (including swimming pools etc). A property in a well maintain complex has added value and a strong residents committe will ensure that expenditure is kept to a minimum. A good syndic will also have sensible rules to regulate the complex for all concerned, covering such issues as noise, pets, sub-letting etc.

Some very small shared buildings - such as a group of less than 10 apartments - may be managed by a voluntary syndic made up of the residents. This is quite legal but the only point to watch is that routine repairs and maintenance have not been neglected, as failure to act soon can create more serious problems later.