French Real Estate: Who Should Draft the Compromis de Vente?
French estate agents (agents immobiliers) are permitted by law to draw up the compromis de vente or promesse de vente (here both are referred to as compromis), two different versions of the initial contract of sale in France. But that does not mean they actually should draft the agreement. Most estate agents agree and recommend that clients engage a notaire to draft the initial contract of sale. Some of the reasons are set out below.
Why Is It Best for a Notaire Draft the Compromis de Vente?
- A notaire is a French lawyer with an additional specialization in property, corporate, family and estate law. Even if your estate agent is a lawyer, they do not have this specialization and experience. The compromis is an important binding legal agreement, containing the conditions that allow you to get out of the sale. The drafting of conditional clauses is a serious matter. One wrong word or omission can make the difference between being able to pull out without losing your down payment or not.
- The final deed of sale (acte authentique) is based on the compromis. The notaire (a government-appointed impartial lawyer) must draft and authenticate the final deed in any event. They do not charge extra for also drafting the compromis. Therefore, there is no cost-saving by not involving the notaire from the beginning.
- The notaire can also advise you on French inheritance law and the best acquisition structure. Another reason to involve them from early on.
- Although the estate agent might do their very best to remain neutral in the transaction, the reality is that the vendor hired them to sell their property. This automatically puts them in a situation of conflicting interests in case of a problem or conflict where parties are on opposing sides. They earn their living selling houses, not by being buyer’s advocates.
Shortly before the completion of a purchase, the buyer discovers that the oil tank for the heating furnace is located on the property of the neighbours (this actually happened!). Not only that, but the neighbours want it to be removed by the new owners. This is a small village and the estate agent has his office in the village. The vendor had not disclosed this fact to his agent, even though the vendor was well aware of it. If the estate agent would have drafted the compromis and would have had to deal with finding a fair solution, it could have become very awkward. Luckily, an efficient bilingual notaire had drafted the compromis and thus had been involved from the beginning. The notaire simply arranged for the costs of removing and replacing the tank to be paid by the seller by deducting it from the purchase price. An estate agent could not have done this.
- You don’t even have to use the same notaire as the vendor. You’re free to appoint your own notaire and the two notaries must share their (government regulated) fees on a 50/50 basis. This means that there is no extra cost to the buyer, who pays all the acquisition fees and duties in France.
There is no clear argument in favour of having a compromis drafted by the estate agent, other than speed in some cases. But there are several strong arguments against it. Buyer beware! Agents often don’t even tell the buyer that they will draft the compromis. Or they’ll say that the notaire has checked their draft and that this is the same as the notaire doing the agreement. That simply isn’t true. I’ve still to see a compromis drafted by an agent that is as thorough and solid as a compromis drafted by a notaire. Generally, they’re outdated standard forms, lacking details and several important provisions.
Therefore, you want to make sure that you sign the compromis at the notaire’s office, in person or via power of attorney. To ensure that this happens, ask explicitly for a notaire to draft the compromis when you put in an offer. If the agent insists on drafting the agreement (usually claiming that the notaire is too busy and they can do it much faster), you could use the ten-day cooling-off period after the signature to get a French property expert involved. Of course, ideally, you have the compromis checked beforehand.
If you’re worried about losing the property before the signing of a compromis, you could sign an offre d’achat, to be countersigned by the vendor. In that case, make sure that the offre is conditional on the signing of a compromis with the standard 10-days cooling-off period. The written offer should include an expiry date in case it’s not accepted and also a deadline for the signing of the compromis.
Please contact a notaire if you have any questions, they can give you impartial advice.