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.

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. 

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.

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.

French estate agents

Reading the various French property discussion forums, it seems that many (British) contributors have a veritable fear and loathing of estate agents, who are invariably blamed when their property fails to get sold!

To put the issue in perspective, whether you like them or hate them, French estate agents are still responsible for over 70% of property transactions, the remainder being transactions between private sellers and buyers, and the remaining few handled by some Notaires,  who are also licensed to act as estate agents (not all choose to do this). Overall property sales have declined by under 20% in 2012-13 so far, but prices have not declined dramatically, and there is not an over-supply of properties.

Various commentators argue that France needs a further 500 000 properties every year, to replace older properties reuiring updating but no-one wishes to take them because of cost, and to house a growing propulation. The collapse of an estimated one in three French marriages has also fuelled a demand for larger properties (3 or 4 bedrooms) to accommodate 're-composed' familes, where the partners may each bring children into a newly formed household.

Not surprisingly in a time of economic uncertainty - over jobs, taxes, spending power - the market for second homes has stagnated, with a lack of buyers in coastal and country areas, and owners trying to offload a second property they use less often, as children grow up and holiday habits change. In some areas, second homes can represent 70% of the local housing stock, so the decline in sales is particularly noticeable.

The decline in sales of first-time properties results as much from general economic uncertainty as the difficulties young would-be owners face when trying to secure a mortgage, particularly after the ending of the PTZ (no-interest government guaranteed loan) in January 2012. As a result many are stuck in rented properties, when they could be paying the equivalent amount in loan repayments as they do in monthly rentals.

Although bank interest rates are at their lowest for decades, lenders are increasingly reluctant to lend to employees in 'unsecure' jobs, which translates into any job that is not in the public sector!

As I have so often said on this blog, the French market is huge and complex, with many regional variations. Depending on what type of property you own and where it is located, you may have to wait for a general upturn in the French economy and/or a radical change of direction by president Hollande, before the market recovers.

French Property News, June 2013

In this special 'house hunting' issue, I have discussed some of the points to watch when house hunting that are sometimes overlooked by buyers. I have had to concentrate on some of the boring details such as planning permissions, regulations that may apply once planning consent has been given in the case of a new-build or extension, and some tips about buying land for building. Other points to note are flood-risks and how the degree of risk is classified and what are the consequences of living in an area liable to flooding (some 10% of all land in France).

I take another look at the often misunderstood workings of the system known as co-ownership, and its benefits and occasional restraints.

French Property News is available on subscription or on sale in newsagents.

French Property News, May 2013

Under the title 'Spanish connection' my article in this month's issue of French Property News focuses on the effects of the new fast TGV train service that will shortly connect Perpignan with Barcelona in just 50 minutes.  Since writing the piece, the projected date of 1 May has been put back again to some time in the autumn, due to technical difficulties still to be resolved (while the French trains take their electric power from overhead cables, the Spanish trains use the track).

Services from inside France and from the UK and other European countries currently reach Figueras, just over the border in Spain, and passengers have to switch to a Spanish AVE train to complete their journey to Barcelona and beyond.

The new service will be of particular interest to travellers who prefer the train, with a return fare from London to Barcelona already available at 203 pounds sterling, and an SNCF special one-way ticket from Paris to Figueras (via Perpignan) for 49 euros.

On both sides of the border hopes have been raised regarding increased cultural, tourist and commercial links resulting from the new services, and with Barcelona (eventually) just 50 minutes away, it is easy to imagine taking a shopping or business trip by train, as opposed to using the frequently congested A7/E15 motorway (2 to 3 hours depending on the time of year).

Barcelona and Spanish Catalonia are Europe's richest regions, with a GDP some 20% higher than the rest of Europe, due to well established manufacturing industries, culture and tourism - including the Costa Brava.

French Property News is available on subscription and fom newsagents.