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.