There are many aspects of French conveyancing law that are not found in the system operating in England and Wales.
Not least of these are the various pre-emption rights available both to public and private individuals on the sale of certain types of property in certain parts of the country.
The rights open to private individuals are found, for example, in respect of a lessee of a property at the time of that property's sale.
Public authorities have extensive pre-emption rights, for example those given to SAFER (a type of agricultural intervention board) for properties found in rural areas.The object here is to intervene in the property market with a view to directing development in rural areas.
One of the most important rights of pre-emption is the 'droit de premption urbain' (DPU).
Those advising their clients buying property in France should be aware of the effect of possible rights of pre-emption, including the DPU.The law for the DPU is found in the code de l'urbanisme.
The DPU is exercised for various reasons by the commune for the area in which a property is situated.
It may be to assist in the development of a local housing policy or to help in the development of the leisure and tourism industry.Only certain types of property are affected by the DPU.
It generally concerns all buildings or parts of buildings whether these are bare plots, individual houses, or blocks of flats.
It does not affect the following: sales of land for building purposes; properties completed for less than ten years (except in the case of D PU Renforc-); any 'lots' comprised in a building completed more than ten years ago and subject to 'copropri-t-' for more than ten years.There are other exclusions from the effect of the DPU, for example, real immovable property rights, in a 'l'usufruit' for example, or movable property rights.
Furthermore, any property subject to DPU does not extend that right of pre-emption to the movables in the property.Only certain transfers are subject to the DPU.
Generally it involves all voluntary transfers for consideration of whatever form and in whatever form that payment is made for the property.
It therefore does affect exchanges of property and such an exchange can therefore only take place if the DPU is purged in respect of both plots of land involved in the exchange.
Such rights exist in respect of adjudications whether these are voluntary or not.
It will also take effect in respect of transfers to companies or partnerships, providing that the property itself falls within the ambit of the DPU regime.Transfers that are not subject to the DPU include transfers for no consideration.
For example, lifetime gifts or transfers on death.
In addition agreements putting an end to the 'indivision' in a property escape the effect of the regime.
Other agreements which do not lead to a property transfer are also excluded - for example leases or tenancies, whatever the length of the term, unless there is a clause in the agreement that ownership of the property will be transferred at the end of the term.
This constitutes a deferred sale and therefore will be subject to the DPU.Strict rules are set down as to how the DPU can be purged so that the proposed sale can proceed.
The notaire will prepare a 'declaration d'intention d'aliener' (DIA).
This declaration is made by the owner (or his or her agent) and sets in motion the purging 'process'.
For the majority of sales at will, the DIA constitutes an offer to contract.
A notification is sent to the mairie of the commune where the property is situated.
If the DIA is not submitted when required then the sale can be nullified.
An action to nullify a sale extends for a period of five years from the date of the transfer of the property.
Practitioners should also be aware that such a sanction also applies if the DPU has been purged in an irregular fashion.For example, if the conditions of the sale that eventually takes place do not correspond to those set out in the DIA, it is important to remember that the situation could not at a later date be rectified.
A DIA must be submitted in each and every case where distinct plots of land are being sold.
If the plot of land is part in and part out of the area affected by DPU then it is important to remember that the holder of the right of pre-emption cannot exercise his or her right over part only of the property sold.The form of the DIA is set out in the legislation.
It includes details of the type of DPU, details of the owner, details of the property and its legal description, the type of transfer, and the conditions of the transfer and price and the method of payment for the price.
Once the DIA is signed by the owner or his or her authorised agent (for example the notaire) then it is sent or deposited at the mairie.
The date of notice of receipt by the mairie is important because this constitutes the start of the pre-emption period.The mairie has two months from receipt of the DIA to both take its decision concerning exercise or not of the pre-emption right, and to notify the owner of the property of that decision.
During that two- month period the mairie consults its different services as to whether it should exercise its rights.The commune can renounce its pre-emption right either explicitly by notice to the vendor (or more likely to the notaire) or by making no response within the two-month period.
As soon as the vendor has been notified by the commune, or the two-month period has expired (whichever is the earlier) he or she can proceed to complete the sale.However, if, on the other hand, the commune does notify the vendor that it intends to exercise its pre-emption right at the price and conditions indicated in the DIA then the sale is then perfect.
At that stage the vendor is no longer able to renounce his or her intention to sell the property.The third alternative is for the commune to offer to buy the property for an alternative price.
If this alternative price is not accepted by the vendor then the commune can indicate its intention to have the price fixed by the appropriate judge.
The vendor then has two months from notification of the decision by the commune to make his or her own response known to the commune.The alternatives are first to give up the proposed sale of the property (any later sale can only take place with a new DIA); secondly, to accept the price proposed by the commune; thirdly, maintain the price or estimate featuring in the DIA as well as the conditions of sale and request that the appropriate judge should fix the price.It is important that the notaire instructed should both have full details of the price and conditions of sale so that he or she can complete the DIA correctly.
However, it is for English legal advisers to give the client buying property in France the fullest possible information concerning the effect of the appropriate pre-emption rights so that if they are exercised the client has been kept fully informed as to their effect and the implications.
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