The time has come to sign the preliminary sales agreement for your property. You are afraid of missing out on the important elements of this contract. We can help you! Here are the 5 points you should consider carefully before signing your final commitment.
You have reached an agreement on the sale price with the buyer.
But has he been informed of all the details of the property you are selling him?
The compromis should give him all the information about the property:
In the case of a business (agricultural, equestrian, winegrowing, etc.), the agreement will also indicate all the specific features of the business in terms of taking over employment contracts, commercial contracts, subsidy rights (CAP, DPU), environmental commitments, etc.
You must provide as much information as possible on the nature of the property you are buying. If you withhold important information, you could be held liable.
A number of diagnostics must be carried out before finalising the sale.
These diagnostics are carried out to guarantee the buyer that he has all the important information concerning your property.
They also reduce the risk of conflict after the sale. The buyer will not be able to hold you responsible for the poor condition of the electrical or gas installation. Nor can they blame you for poor insulation or high energy bills.
You must also inform the buyer if you have carried out major work in the previous 10 years, ...
Both parties want to be sure that the sale will go through. The buyer must be able to give up his project if no bank agrees to grant him a loan. And for you, it is important to be reassured about the financial feasibility of the project.
This is why the agreement includes a section on financing arrangements. The buyer also benefits from a suspensive condition which gives him a minimum of 30 days to obtain a loan offer if the agreement includes a residential house.
Your buyer will also usually be required to pay a deposit at the time of signing the agreement. This sum will be returned to him if financing is refused or if another condition precedent in the deed is not lifted.
You can read a more complete article on the security deposit because it is often a sticking point between seller and buyer.
In addition to the question of financing, the contract may provide for various conditions to be fulfilled before the final sale is signed. These are most often set to protect the buyer, but some conditions may be set to protect you.
What preconditions can you include?
Obtaining planning permission or a positive planning certificate: The buyer wishes to carry out a new construction or extension, and asks to insert a condition relating to the administrative authorisation of this work.
Prior sale of another property: Your buyer's self-financing sometimes depends on the resale of their main residence or another property. He will ask for a clause linked to the completion of this operation.
Obtaining administrative authorisations: Obtaining an authorisation to operate from the Contrôle des Structures or the Installations Classées, which are often mandatory.
Obtaining areas of land under lease: it may be necessary for the previous owners to grant your transferee rural leases on the land that you were previously farming.
On the seller's side, it is possible to include a clause relating to the agreement of a bank or other creditor for the release of a mortgage given on the property sold.
These are just a few examples of conditions that can be included. Take the time to think about them carefully before signing.
Sealing the final commitmentA compromis de vente is a sales contract that is signed under the condition of lifting a certain number of suspensive conditions. When the conditions of the preliminary sales agreement are lifted, the sale becomes perfect, i.e. it is no longer possible to break the commitment.
The preliminary sales agreement often contains a penalty clause which offers an exit door (without legal recourse) but it usually involves the payment of a sum of money (often 10% of the price) to the other party. This clause is above all there to remind each party of the nature of the commitment they are about to make.
In conclusion, you will have understood that the preliminary sale agreement is a very important document which determines the final conditions of the sale and receives the final commitments of each party. The stakes are high and often exceed the purchase price. So do not hesitate to seek the assistance of specialists in this phase.
