Nice property market hit by Loi Alur

The French President, Francois Hollande, has put into effect from the 1st January the new “Loi Alur” affecting property sales and rental in France. Despite having been received by Notaires in advance, even now none of them have gotten to grips with this monstrosity.

Buying property in Nice has always been a safe and simple affair. Traditionally you negotiate a price, sign a “Compromis de Vente” at the estate agency which locks in the seller immediately but gives you a 7-day cooling-off period in which you can change your mind, you put down a 10% deposit and simply provide the Notaire with the balance by the day of signing around a month and a half later. The system was pretty much perfect, and so France’s most unpopular President since the French Revolution had to tinker with it.

Behind the scenes is now enormously complex but I will only explain the effect it has on you, the buyer.

The first thing you will notice is that you no longer sign a Compromis de Vente to secure a sale at the estate agency. This is because of the vast and complex paperwork required before a Compromis can be signed, some of which cannot be procured by the estate agent.

Instead you will be asked to sign an “Offre d’Achat”, which is simply a written proposal to buy a property at a certain price. If the seller accepts then he will counter-sign. This paper has little legal worth, but acts as a statement of intent. A “gentleman’s agreement” if you will.

The Notaire then has to supply huge dossier that then needs to be provided with the contract agreement before it can even be given to you. This includes the original building rules (even if written 400 years ago, and printed even if hundreds of pages long) plus every modification to date, last 3 years of Annual General Meeting minutes, the “carnet d’entretian” (Syndic document with list of major works done, contracts in place for building insurance, etc), and much more. This can be a stack of papers 20-30cm high, not very environmentally friendly. We have had Notaires take up to 3 months getting this dossier together before the buyer can even sign an offer, and this is before even the 7-day cooling starts, or you can apply for a mortgage.

This period has become the danger period in sales, especially if we have done our job and negotiated the lowest possible price. Some of our colleagues are reporting up to 50% of their sales falling through as either the buyer changes their mind or the seller is offered more money. We have never lost a sale to date but that is because we are always in constant contact with both parties right up until both buyer and seller are committed to the sale.

We are also constantly in contact with the Notaire (or both if buyer and seller have one each), and constantly guiding the sale. With Notaires having to do so much more work per sale, they are all slammed in terms of work. Dossiers are constantly falling behind and in some cases falling apart.

The other effect is that the time between the Compromis and the signing is now rather short since 90%+ of the work has already been done. If you are wondering if these changes have nullified some of the major benefits of the Compromis, the answer is yes it has.

In conclusion, it is no longer sufficient to find the right property. You now need an experienced estate agent that you can be confident will guide your sale through to a successful conclusion. For more information, please do not hesitate to contact us at info@medinheaven.co.uk.