As a result of a new law passed in June 2009, anyone selling a French property must now provide a further expert report concerning the state of the building's electrical installation. This is in addition to those covering termites, lead, asbestos, gas installation, flooding and natural risks, and energy efficiency.
The inspection, undertaken by a certified professional, is extremely thorough, and covers everything from the mains supply, distribution panel and fuse box, wiring, electrical sockets and switches. The expert's report includes an obligatory list of comments and recommendations.
The result is that many existing properties will not be in conformity with the latest norms (as they may well not be in terms of energy efficiency) and in extreme cases an expert might recommend shutdown of the system by the supplier (EDF) until alterations have been carried out. Similar procedures apply to gas installations.
The new inspection imposes another obligation on vendors, who have to pay for the expert's report, and may encourage buyers to seek a further reduction in the sale price if it appears that there is a considerable cost involved in bringing the electrical installation up to standard.
In all cases and especially where defects or 'anomalies' have been identified by the expert, the report emphasises that the new owner inherits the risks and responsibilities associated with the installation as it exists, and notes that in some cases insurers may decline to offer cover until alterations have been carried out.
Friday, June 25, 2010
Wednesday, June 16, 2010
500,000th auto-entrepreneur registered this week
This week, France's minister for small business, announced the registration of the 500,000th auto-entrepreneur, another clear sign of the popularity of this simplified form of self-employment created in January 2009. Originally registrations were expected to reach 100,000 in 2009 but this figure was later revised as they excceded 320,000 in the first year of launch, finally reaching today's figure of half-a-million registrations in just 18 months.
This week's announcement notes that combined income generated by new auto-entrepreneurs was over 1 billion euros in 2009, and is expected to reach three billion in 2010, represented a significant extra income for many new full and part-time businesses.
A recent study has found that 64% of new auto-entrepreneurs are men against 34% women; 16% are aged 30 or under, and 19% are aged 60 or over. This last figure is particularly encouraging, given the very low percentage of French people actually in fulltime jobs after the age of 55, five years before the tradtional retirement age of 60.
In January 2011, the French government intends to launch another new regime - the E I R C or Entreprise Individuelle (avec) Responsabilité Limitée. This will be similar to the single-person limited company (EURL) but enables an individual who is self-employed to enjoy the same sort of protection, with the added benefit of limited liability.
Individuals opting for the auto-entrepreneur regime are self employed, and pay a combined total of tax and social contributions (at a rate of 13% for commercial activities and around 21% for services), based on actual income earned, and declared quarterly. There are limits on annual turnover, currently around 80,000 euros for commercial activities and 34,000 euros for services, such as consultancy. Auto-entrepreneurs are not alllowed to deduct or charge VAT on their activities, and some reserved occupations are excluded from the regime.
Activities as an auto-entrepreneur can be combined with full or part-time employment in another occupation, including students. The regime is open to those out of work (11% of AEs), pensioners (about one quarter of AEs) and EU nationals, including British who wish to work in France. A search on Google will reveal a wealth of information on the subject, much of it in English.
This week's announcement notes that combined income generated by new auto-entrepreneurs was over 1 billion euros in 2009, and is expected to reach three billion in 2010, represented a significant extra income for many new full and part-time businesses.
A recent study has found that 64% of new auto-entrepreneurs are men against 34% women; 16% are aged 30 or under, and 19% are aged 60 or over. This last figure is particularly encouraging, given the very low percentage of French people actually in fulltime jobs after the age of 55, five years before the tradtional retirement age of 60.
In January 2011, the French government intends to launch another new regime - the E I R C or Entreprise Individuelle (avec) Responsabilité Limitée. This will be similar to the single-person limited company (EURL) but enables an individual who is self-employed to enjoy the same sort of protection, with the added benefit of limited liability.
Individuals opting for the auto-entrepreneur regime are self employed, and pay a combined total of tax and social contributions (at a rate of 13% for commercial activities and around 21% for services), based on actual income earned, and declared quarterly. There are limits on annual turnover, currently around 80,000 euros for commercial activities and 34,000 euros for services, such as consultancy. Auto-entrepreneurs are not alllowed to deduct or charge VAT on their activities, and some reserved occupations are excluded from the regime.
Activities as an auto-entrepreneur can be combined with full or part-time employment in another occupation, including students. The regime is open to those out of work (11% of AEs), pensioners (about one quarter of AEs) and EU nationals, including British who wish to work in France. A search on Google will reveal a wealth of information on the subject, much of it in English.
Monday, June 7, 2010
French property sales up, interest rates down
A recent batch of reports has produced the usual confusing picture of the French property market.
Among the certainties are the fact that typical interest rates are at their lowest since 2006, with some lenders offering 15 year loans at a fixed rate of 3.35%, with borrowers contributing 10% of their own capital. The T3 (three rooms, kitchen and bath) is still seen as the most secure investment by buyers. A rise of 10% in loan approvals was recorded during the first quarter of 2010.
Some sources also report an average 16% shortage of good saleable properties, and 21% for apartments. As a result small price increases have been noted in some of the most popular sectors, including Paris and other large centres.
In Languedoc-Roussillon we are currently experiencing a shortage of good, saleable properties, with too many still coming onto the market over-priced and not in a fit condition to show to potential buyers.
Would-be sellers have only themselves to blame if their property fails to sell within a reasonable time, while these near ideal market conditions continue to prevail.
Sources: Argus du logement, Universimmo, Notaires de Paris.
Among the certainties are the fact that typical interest rates are at their lowest since 2006, with some lenders offering 15 year loans at a fixed rate of 3.35%, with borrowers contributing 10% of their own capital. The T3 (three rooms, kitchen and bath) is still seen as the most secure investment by buyers. A rise of 10% in loan approvals was recorded during the first quarter of 2010.
Some sources also report an average 16% shortage of good saleable properties, and 21% for apartments. As a result small price increases have been noted in some of the most popular sectors, including Paris and other large centres.
In Languedoc-Roussillon we are currently experiencing a shortage of good, saleable properties, with too many still coming onto the market over-priced and not in a fit condition to show to potential buyers.
Would-be sellers have only themselves to blame if their property fails to sell within a reasonable time, while these near ideal market conditions continue to prevail.
Sources: Argus du logement, Universimmo, Notaires de Paris.
Thursday, May 27, 2010
Sudden surge in new-builds.......
Fifty-four new apartments and villas, out of a total of sixy-two available, were sold in a single weekend recently in France. A sign that the property market is picking up?
Certainly the predictions are optimistic according to various experts quoted in Le Figaro who cite another example of nearly 70% dwellings sold on a development by Nexity, and a rise in building permits of 25% recorded in March and April alone. In the first quarter of 2010, sales of new developments have risen by 5.3% against a dramatic 59% fall in 2007/8, with around 75% new starts already recorded in 2010.
This year sales of new-builds are forecast to reach 106,000 in addition to 100,000 much needed social housing units.
Already there are signs that new property prices are rising, up by 8.5% for studios and 8.9% for properties of four rooms and above. Reasons given are the need for new-builds to comply with the new BBC norms ('batiment basse consumption') for low energy consumption, with tend to add around 10% to building costs.
Source: Le Figaro 27 May 2010.
Monday, May 17, 2010
Making an offer on a French property
It is virtually always possible when considering buying a French property to propose an offer that is below the asking price. The crucual question is By how much?
Properties offered for sale by estate agents should have been subject to an estimation of the property's value, before being formally taken onto the agency's books with the completion of a 'sales mandate' by the vendor and the agent. The mandate sets out the agreed asking price of the property, the commission payable in the event of a sale, and the term of the mandate - usually three months renewable in the case of a simple mandate.
In discussion with his client, the agent may have gleaned an idea whether there is any room for manoeuvre in the event that a potential buyer makes a formal offer on the property. Almost invariably owner/vendors have an inflated view of the value of their property, which they may have loved and cherished over the years, and are now reluctant to part with. Emotional reactions may cloud their judgement and many do not, at this stage at least, always listen to the advice of the agent, who may have his own view of the property's saleability. (A reputable agent would not take on a property that is so over-priced as to render it unsaleable).
Buyers considering making an offer should consult their agent and listen carefully to his advice. There can be certain legitimate grounds for proposing an offer, for example if the state of the property means that extensive renovation works are required. In this case asking for a price reduction is justifiable, and you could support your request with builders' estimate to prove the point. Asking for a price reduction simply because a particular property is priced at more that you can afford leaves little ground for justifying your request. In this case, you would have to turn elsewhere and find something cheaper.
Potential sales often collapse because of intransigence by either buyer or seller, even when the two sides are only a few thousand euros apart. More often it is an unrealistically low offer by the buyer which is put forward, against the agent's better judgement, that effctively kills the sale. Well instructed agents will know or have a feel for how much leeway is possible, and may know from past experience that offers at or below a certain amount have been refused by the vendor, and simply refuse to pass them on.
Even in what is currently regarded as a buyers' market, many owners are simply withdrawing their property from the market, as many may be second homes or there is no particular urgency to sell. In every case, it is wisest to listen to you estate agent or adviser, who knows the market, knows the property and - above all - knows the vendor.
Properties offered for sale by estate agents should have been subject to an estimation of the property's value, before being formally taken onto the agency's books with the completion of a 'sales mandate' by the vendor and the agent. The mandate sets out the agreed asking price of the property, the commission payable in the event of a sale, and the term of the mandate - usually three months renewable in the case of a simple mandate.
In discussion with his client, the agent may have gleaned an idea whether there is any room for manoeuvre in the event that a potential buyer makes a formal offer on the property. Almost invariably owner/vendors have an inflated view of the value of their property, which they may have loved and cherished over the years, and are now reluctant to part with. Emotional reactions may cloud their judgement and many do not, at this stage at least, always listen to the advice of the agent, who may have his own view of the property's saleability. (A reputable agent would not take on a property that is so over-priced as to render it unsaleable).
Buyers considering making an offer should consult their agent and listen carefully to his advice. There can be certain legitimate grounds for proposing an offer, for example if the state of the property means that extensive renovation works are required. In this case asking for a price reduction is justifiable, and you could support your request with builders' estimate to prove the point. Asking for a price reduction simply because a particular property is priced at more that you can afford leaves little ground for justifying your request. In this case, you would have to turn elsewhere and find something cheaper.
Potential sales often collapse because of intransigence by either buyer or seller, even when the two sides are only a few thousand euros apart. More often it is an unrealistically low offer by the buyer which is put forward, against the agent's better judgement, that effctively kills the sale. Well instructed agents will know or have a feel for how much leeway is possible, and may know from past experience that offers at or below a certain amount have been refused by the vendor, and simply refuse to pass them on.
Even in what is currently regarded as a buyers' market, many owners are simply withdrawing their property from the market, as many may be second homes or there is no particular urgency to sell. In every case, it is wisest to listen to you estate agent or adviser, who knows the market, knows the property and - above all - knows the vendor.
Wednesday, May 12, 2010
Getting the best out of your 'agent immobilier'
Your first contact as a potential property buyer in France is almost always through a local 'agent immobilier', a member of a licensed profession uniquely authorised under French law to handle the sale of properties entrusted to them by their client-vendors. As French agencies tend to work a little differently from their English counterparts, it is useful to know what to expect - and what not.
Many first approaches are made by email and a common frustration for non-French buyers is what they see as tardiness by the agent in responding to their requests for 'more information' about one or more properties. Having worked in a busy French agency, a three-person office of a group of four, I can explain how life really was. We routinely received 20 to 30 emails per day. In addition to potential buyers seeking general information, many emails concerned ongoing transactions, as well as requests from vendors to consider taking their property onto the agency's books.
In addition there were phone calls, mainly from French buyers; visitors arriving at the office either unannounced or by appointment; visits to make to view properties with the client; or to a vendor to prepare a mandate for sale, take photographs and prepare the sales description for the office window, magazine advertising and the website. Every sale also absorbed numerous man-hours preparing the documents for the Notaire's dossier, with some agencies, such as ours, even preparing the initial sales contract ('compromis de vente') and taking a 10% deposit on account.
As a result, general enquiries arriving by email tended to sink to the bottom of the pile, particularly if they were vague requests for more property details (often no more than we had posted on the website), compared to phone calls which could be dealt with quickly or visitors arriving in person.
We also learnt over the years that 90% of these general-enquiry emails produced no result - no subsequent phone call, no visit, no sale. We also developed a fairly accurate profile of the typical property buyer as someone who:
- knew or had visited the region
- were often already known to us
- knew what they were looking for (house, apartment, land etc) but prepared to be flexible
- phoned a few days ahead to arrange property viewings by appointment
- had allowed sufficient time to visit us and several other agencies (a minimum of several days) and make return visits if necessary
- had their finanaces in place and were ready to sign an initial offer or the 'compromis de vente' and pay a deposit to secure the property
- might come back for a second visit
- might come back in three to six months time
Most had NOT requested information by email but had probably phoned us after identifying a property or several, mainly to check their availability and to arrange viewings. Very few were travelling a long distance to view only one property they had identified or 'set their heart on'.
To make the most of your property search visits, I advise clients to be reasonably certain of which region and type of property they are interested in; to listen to the agent's advice about alternatives, prices, locations, lettability, offers; allow sufficient time for visits and preferably by appointment; try not to visit too many properties too quickly; to be aware that the same property may be with several agencies; to be honest with the agent about whether they are really in a position to buy or simply making a preliminary visit to get a feel for the market.
Following these simple guidelines can help ensure that your dealings with the French agent are pleasant and productive. If you are not used to the French property buying system or do not speak French, then firms such as ours are available to help you from initial property search through to completion and settling-in.
Monday, April 26, 2010
Getting on with the neighbours
A recent post on one of the French discussion forums concerns an English family who moved to a small village in France 'hoping for rural solitude'. They had in fact bought a derelict plot of land and spent the last two years building a house, and are now suffering hostility from the neighbours.
Perhaps not surprising, as they describe their activities as including long periods of using a mechanical digger, receiving deliveries of building supplies, keeping a noisy guard dog, erecting a seven-foot high surrounding hedge, and claiming they do not work during lunchtime or on Sundays! If it was a British person writing about a French family, doubtless they would have been labelled as neighbours from hell.
Much of the advice given in the replies to this post has included adopting a more conciliatory approach to the (French) neighbours, and trying to apreciate the situation from their point of view. Sadly, the original poster appears more ready to file a formal complaint for harrassment.
I think one can draw a number of lessons from this truly sad situation. One of which is clearly that you can not and will not find peace and solitude in a small French village, where typically everyone knows everyone else's business and new arrivals have to make a super-human effort to fit in and slowly become accepted. It is very much about contributing something to the overall life of the community.
If you are not prepared to do this, for whatever reason and it is entirely a personal choice, then it is perhaps wiser to settle in a larger, more cosmopolitan community, where your arrival and lifestyle will pass largely unnoticed. In many of the Mediterranean coastal resorts where I live, the original residents are used to the influx of seasonal visitors of virtually every nationality, and those who live here permanently tend to go about their affairs wihout attracting any particular interest. Friendships and connexions can be made but they are an option not an obligation.
Selecting your French property for either occasional or permanent use should take into account your personal preferences, and time is well spent in searching for the neighbourhood which suits your way of life and in which you will feel most comfortable.
Perhaps not surprising, as they describe their activities as including long periods of using a mechanical digger, receiving deliveries of building supplies, keeping a noisy guard dog, erecting a seven-foot high surrounding hedge, and claiming they do not work during lunchtime or on Sundays! If it was a British person writing about a French family, doubtless they would have been labelled as neighbours from hell.
Much of the advice given in the replies to this post has included adopting a more conciliatory approach to the (French) neighbours, and trying to apreciate the situation from their point of view. Sadly, the original poster appears more ready to file a formal complaint for harrassment.
I think one can draw a number of lessons from this truly sad situation. One of which is clearly that you can not and will not find peace and solitude in a small French village, where typically everyone knows everyone else's business and new arrivals have to make a super-human effort to fit in and slowly become accepted. It is very much about contributing something to the overall life of the community.
If you are not prepared to do this, for whatever reason and it is entirely a personal choice, then it is perhaps wiser to settle in a larger, more cosmopolitan community, where your arrival and lifestyle will pass largely unnoticed. In many of the Mediterranean coastal resorts where I live, the original residents are used to the influx of seasonal visitors of virtually every nationality, and those who live here permanently tend to go about their affairs wihout attracting any particular interest. Friendships and connexions can be made but they are an option not an obligation.
Selecting your French property for either occasional or permanent use should take into account your personal preferences, and time is well spent in searching for the neighbourhood which suits your way of life and in which you will feel most comfortable.
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