French Entrée Tax & Law Quarterly – Purchasing Land in France

How is it different from buying property?

The purchase of land in France is reasonably similar to the purchase of an existing property however there are a few differences to be aware of and additional considerations are necessary.

The first point is that if the land is intended simply to be used as garden land and no construction of the land is planned, then there will be no cooling off period in the contract. Once you sign the contract, you will be committed to proceed – subject only to various standard conditions being fulfilled, one of which may be a condition that you can secure the finance required.

This is in contrast to the purchase of a plot of land that is destined for construction of a dwelling. In this case, the contract should include a seven day cooling off period and once all parties have signed the contract, the agent or notary is required to serve a copy on the buyer who then has seven days running from the day after receipt in which to withdraw from the purchase and recover any deposit paid. The cooling off period is only available to the buyer. The seller is committed immediately on signature.

The second important consideration when buying land intended for development is one of planning. The starting point must be to ensure the land is zoned for development and is not reserved for agricultural use only or is otherwise subject to restrictions which would prevent you building a house.

Reassurance on this point is available in the form of a positive planning certificate (un certificat d’urbanisme pré-operational positif). This is often likened to an outline planning consent for the proposed development of the land. However, what the positive planning certificate actually constitutes is an acknowledgement from the planning authority that if you submit a detailed planning application to them within 18 months of the issue of the positive certificate, such application will be considered favourably. Therefore, the ultimate grant of planning permission for your project is not guaranteed but the planning authority is confirming that in principle, the land is suitable for development in that the local planning rules will permit the development in that location and that there is mains water and electricity in the vicinity which will ensure the property can be made habitable.

Moving on to other aspects, the purchase of land for construction follows the same pattern as the purchase of an existing dwelling. The first document you will sign is the contract (le compromis de vente) and you should ensure this is conditional on the issue of a positive planning certificate, if there is not already a certificate in existence.

The compulsory reports that a seller is required to produce for a buyer are not applicable to a land purchase, except for a statement as to the absence/presence of any natural or technological risks affecting the area in which the land is situation. This will highlight for example whether the land is at risk of flooding, avalanche, landslide or forest fire and the existence of such risk factors will obviously depend on the region in which the land is located.

If the buyer is reliant on arranging finance in order to proceed with the purchase, the contract needs to include a finance condition. The wording of such a clause will be framed so as to provide the main details of the finance being sought and will specify a period of no less than 30 days from signature of the contract in which you need to obtain a firm offer of finance. If you fail to get the finance, you will normally be able to obtain a refund of the deposit paid (generally 10% of the purchase price) but the seller is entitled to ask for evidence that you have tried to get the finance and have been refused.

Once a binding contract is in place, the notary will deal with the pre-completion formalities, including a Land Registry search and a local authority search. If anything untoward is revealed by these searches, the contract will be cancelled and your deposit will be returned to you. The notary also has to ‘purge’ any preemption rights before he can proceed to arrange completion. Preemption is where a third party such as the local commune or the local agricultural commission can elect to buy the land in your place. This is a topic that requires an article of its own, so we won’t expand on it here.

Assuming the search results are all clear, the notary will contact the parties to invite them to a completion meeting. The time period between signing the contract and completion is usually up to two months. You do not have to attend completion in person and can sign a Power of Attorney in the UK instead. This will authorize one of the notary’s clerks to sign the final purchase deed on your behalf and in your absence. It is of course important to check a draft of the final deed prior to attending completion or signing a Power of Attorney and this is where a UK based French law specialist can assist.

This article first appeared in French Entrée’s Tax & Law Quarterly – April 2011.