Real Estate Tax
Buyer or seller may think that signing a preliminary contract contains not much. Think again! Despite its name, the preliminary contract is indeed a "contract" in the legal sense, which entails significant obligations for both parties.
The importance of the preliminary contract
Let us define first that the signature of a preliminary contract is not legally binding. But it’s indispensable in realism: indeed, at the time of the agreement, the buyer usually does not yet have all the information (if any right of first refusal, lack of easements, etc...).
In realism, the call to a professional (real estate) is also essential, given the complexity of the matter and the importance of commitments. In fact, the terms of the preliminary contract are essential because the final contract will normally take over the terms.
Generally, the cost is deducted from the Committee of the realtor. It represents no real additional cost to the parties concerned.
With the implementation of the Law on Solidarity and Urban Renewal on 1 June 2001, a period of withdrawal has been established for the benefit of the purchaser. An individual who signs a preliminary contract now has a period of seven days to change his mind by informing the Seller by a bailiff or registered mail with return receipt.
When the seller is an individual, he has no right to claim payment of a sum of money before the end of the withdrawal period. On the other hand, when there is a new home or future state of completion or when the seller is a professional, the preliminary contract may provide for payment of compensation for detention.
In all cases, when the buyer withdraws, he must recover any sums paid within 21 days from the day after the date of withdrawal.
The promise of sale
The sales agreement commits especially the seller. The owner (the "promising") provides a sort option on the property to the proposed purchaser under the conditions stipulated in the act. Naturally, almost all of the promises of sale include a deadline.
By co-signing this document, the prospective purchaser accepts the benefit of the promise, and until that deadline, it has the right to buy or not to buy. In consideration of this option, it also pays the buyer a "capital allowance".
This amount is generally 10% of the selling price. But if the price is high and the duration of the promise rather small, it is possible to reduce this amount. Again, the parties are free to negotiate.
Accordingly, several hypotheses may arise.
1. The candidate purchaser exercising the option within the prescribed period. The sale is then entered on the legal front (before being formalized by then the deed).
2. The candidate buyer does not exercise the option. Once past the deadline, the owner is entitled to offer the property to another candidate, and he retains the benefit of capital.
If the candidate buyer quickly manifests his refusal, he may eventually request a partial refund of this amount. The courts sometimes grant a reduction of compensation when it is considered excessive in terms of downtime.
Unless otherwise provided, the beneficiary of a promise of sale may assign a third party who replaces him. This allows it to recover compensation from detention.
3. The owner did not sell the home before the beneficiary exercises its option. In this case, it may require the owner to sell his property but he is entitled to demand damages, eventually bringing it to justice, and only after officially lifted the option in time.
It’s the same when the owner sells during the third deadline and before the option exercise.
4. The owner refuses to sell the property after the beneficiary has exercised its option. In addition to the damages it may claim, it may also require the owner to sell his home because the only option exercise enough to legally enter the transaction.
Of course, compensation is paid when the owner does not meet its obligations.
The sale agreement
This is a true act of sale with "early implementation" because both parties are committed irrevocably: the seller promises to sell the candidate who promises to buy. The latter provides in return a "deposit" as in any contract.
If either of the parties waives the transaction, the other may be constrained by justice, by requiring damages in addition.
Restrictive covenants
Given the importance of the commitments of each, the preliminary contracts normally include some clauses that may prevent the execution of definitive agreements. The parties are free to decide the wording of these clauses. The only legal requirement for purchases of homes is when it’s financed by a loan.
Forfeit Clauses
Mainly used in the compromise of sale, forfeit clause allows either party to give up on payment of a sum determined in advance.
In some cases, it is a deposit worth using forfeit. The owner must then pay double the deposit if he changes his mind while the prospective buyer loses the money if it decides not to buy.
The suspensive clauses
The term “résolutoires” does not prevent the early achievement of the contract but cancel if the events will be achieved. The term "suspensives" suspends the contract until the events will be achieved. The result is actually identical: the transaction is not realized due to an event beyond the control of both parties.
The only mandatory for a suspension clause is concerned with obtaining a loan. If the purchase is financed by the loan, the prospective purchaser is released from his commitment if he does not get the desired loan on time. It then recovers its full allowance asset or security deposit. However, when obtains a loan offer that complies with the features provided at the financial institution, he is committed to the contract. Therefore it’s needed to properly negotiate the terms of the loan before signing the preliminary contract.
A buyer who borrows must not explicit in the preliminary contract that waives the benefit of the law.
The prospective purchaser should not use this clause to voluntarily waive the purchase and recover the sums paid in full. The courts have convicted and practices, when, for example, the prospective purchaser handed an incomplete file to its bank, etc... However, certain events (termination, disability, etc...) Can be accepted by the courts and allow the individual to recover the sums paid even if he also obtained his loan.
Other suspensive clauses are freely negotiated by both parties. Examples: obtaining a planning certificate indicating the absence of easements or building permit when the buyer provides important work, no preemption of local, no mortgage or attachment procedure, etc. . .
If necessary, the buyer may request to include a clause suspending the contract until it has found itself a buyer for its own housing. This clause is perfectly legal.
This document is derived from Droit-Finances.net (droit-finances.commentcamarche.net )