Who’s the notaire and what is a promesse de vente? A selection of words, people, and terms of art you may come across in your real estate venture in Paris.
- Acte de vente: The final purchase agreement, or deed of sale, for a property. The contract is drawn up by a notaire, who oversees the signing and the administrative formalities of registering the sale.
- Acte sous seing privé: Private treaty. A simple contract between private parties. In property sales it is the form ordinarily used for the initial purchase and sale agreement, or promesse de vente, that is drawn up by the notaire(s) and signed by the parties. The acte sous seing privé is often used in property rentals.
- Administrateur de biens: A company (less often, a person) that manages the operational needs of a property. In a residential building, this role is played by the syndic (co-ownership association representative), who looks after the interests of the apartment owneres regarding insurance, collective utilities, building maintenance, etc.
- Agence immobilière: Real estate agency, that offer services and advice related to property sales and rentals, gives advice for buying, estimates property value for sale, and other real estate-related activities. In France, only licensed real estate agencies can lawfully provide property search and sale services.
- Agent commercial: In the real estate context, an independent agent acting on behalf of the broker under whose license they are operating. This work status is more flexible for the company and the individual than an employer/employee relationship. These free agents are still bound by the rules of propriety and service required of their licensed broker.
- Agent immobilier: A real estate agent: a professional who represents the owner, the buyer or the tenant in the sale or rental of property.
- Ascenseur: Elevator
- Assemblée générale de copropriété: Annual general assembly of the co-owner association (copropriété) in a building. The syndic oversees the owners as they make decisions about building management fees, imrovements, proposed building works, and special requests by individual owners that require co-owner approval. Strict laws govern the number of votes and the number of co-owners who must be present for certain changes to be made to the building. The votes are recorded in the ordre du jour, or meeting minutes. When purchasing an apartment, the seller should make at least the last 3 years of meeting minutes available to the buyer for review.
- Bien immobilier: Real property
- Bon de visite: Proof of visit. Estate agents will often require a client to sign a bon de visite acknowledging that they visited a property with the agency, so that the client cannot try to deal directly with the seller to avoid paying the agency’s commission.
- Carte professionnelle: Real estate professional license. Any person carrying out property management or real estate purchase and sale transactions is required to have a professional card. An estate agent who does not have this card is operating illegally.
- Charges récupérables: Costs paid by a tenant that would normally be payable by the landlord. These might be routine maintenance of the property, specified furnishings or electrical equipment, minor repairs or certain taxes.
- Chasseur d’appartement: Literally, a “flat hunter,” this is a property agent that finds properties for a buyer. Like all real estate professionals, property hunters must have real estate licenses to operate.
- Commission: Commission. To collect a commission the real estate agent must have a signed mandat (mandate) to find, sell, rent or manage that sets out the amount of the commission due.
- Compromis de vente: Sales agreement. This is the contract signed by the seller and the buyer of a property documenting the agreement to sell, either privately or with the assistance of an agent. The compromis de vente replaces the promesse de vente, which is the document signed under the supervision of a notaire. The document commits the two parties to the sale, subject to conditional clauses. The buyer will ordinarily be required to pay a 10% good faith deposit shortly thereafter, which he will lose if he pulls out of the purchase without cause.
- Concierge: Building superintendent. Can also be called a guardienne. The concierge manages small maintenance and co-ownership needs including cleaning the common areas and collecting the mail. A live-in concierge has a ground floor apartment in the building for free, plus a small salary. They will often do housework on the side for one or more of the owners in the building. A Christmas bonus is usual and welcome.
- Conditions suspensives: Conditional clauses contained in a promesse de vente or compromis de vente that suspend the required execution of the contract. A conditional clause may concern the buyer obtaining a mortgage, or the seller obtaining required planning or building permission. A valid conditional clause must not depend on pure chance or on the will of one of the parties to the sale.
- Conseil syndical: The co-owner association’s advisory board. The board is usually comprised of 3 co-owners, voted annually at the assemblée générale. The board assists the syndic and generally supervises its management of the building. Some buildings with fewer co-owners opt to do away with the syndic and manage the building themselves through the conseil syndical.
- Copropriétaires: The property owners (commercial or residential) in a building.
- Copropriété: A building that belongs to several persons at any one time and to each of them separately. The building is divided into common and private areas. The co-ownership regulations fix the rules for ‘communal life’.
- Dépôt de garantie: Good faith deposit, or earnest money, paid into escrow by a buyer at the signing of the compromis de vente or promesse de vente. Ordinarily the good faith deposit is 10% of the net purchase price of the property. If the conditions to sale have been met and the buyer refuses to complete the purchase, he will lose that money to the seller.
- Diagnostiques: Reports that the seller is required to provide to the buyer in a property sale. There are currently 7 reports: the loi carrez size, termites, lead, asbestos, natural gas installation, electrical wiring, natural risks (e.g., flood zones) and energy efficiency. Most of these tests are completed together before the property is listed.
- Droit de preemption: The right reserved by the city of Paris in certain neighborhoods, to preempt a sale of property by acquiring the property at the same price as the buyer. This city has one month to exercise its right of preemption during the closing period on the sale.
- Expert immobilier: Property surveyor: a professional whose role is to estimate/evaluate the market value of rental or sale property.
- Fiscalité: Relating to income/tax laws.
- Frais d’acquisition: Purchase costs associated with a real estate sale. In shorthand often referred to as notaire fees, which gives the mistaken impression that the notaire is collecting and keeping that money. Not so, although it does include the notaire’s own fee, about 1% of the purchase price. Other fees and taxes included are the ‘taxes de publicité foncière’ (land registry taxes, or stamp duties), mortgage registration fees and miscellaneous fees associated with title search and administrative documents. In France, most residential property is subject to about 7% purchase costs; new-build property is subject to value added tax, or VAT, of just under 20%.
- Gardienne: See concierge.
- Hypothèque: The mortgage is used to guarantee the payment of the debt contracted on a real estate property. It allows the lender to have the debtor’s property sold by legal means should they be unable to pay back due sums.
- Indivision: Part share. A situation where a property is owned by several persons without there being any kind of physical separation or division. It is the case where there is joint purchase of a dwelling, in an inheritance where the property has not yet been shared out between the heirs, or in the case of a company that is being wound up.
- Location meublée: Furnished rental. All residences rented with sufficient furniture for everyday life are considered “furnished rentals” and subject to a minimum one-year rental term if rented to a Paris resident. The tenant has the right to terminate their contract earlier, usually with one-month’s notice.
- Location saisonnière: Seasonal or short term rentals, often for a few days, a week or longer. Seasonal rentals are popular throughout Paris, but remain concentrated in high-tourist areas in the central arrondissements.
- Loi carrez (m2): The square meter size of an apartment, measured in accordance with strict laws as to what can be included. The definition is very strict, excluding floor area with ceiling heights below 160cm, doorways and window bays, terraces or balconies. Many top-floor apartments with slanted ceilings will have substantially different au sol (“on the floor”) and loi carrez measurements.
Where the difference between the total size (m2 au sol) and the loi carrez are substantial, listings will often indicate the size au sol alongside the loi carrez measurement.
One m2 equals 10.76 square feet.
- Mandat de vente: Seller’s contractual agreement with real estate agent to list a property for sale and sets the agent’s commission for same
- Marchand de biens: Property dealer or trader who buys buildings or properties to renovate or reconfigure and resell. This business is less strictly regulated, so is transactions with marchands de bien are not covered by the same guarantees as for an estate agent.
- Millieme: Percentage of building ownership over a denominator of 1000 — an apartment millieme of 50/1000 would be a 5% ownership portion of the overall building for your apartment
- Notaire: The notaire is a public official with legal training (but different from a lawyer) who prepares and registers official acts such as wills, marriage contracts, and property sales. A notaire’s primary role is to ensure that the transaction is legitimate and that the official requirements have been met. A good notaire, of course, is also an advocate for his client’s interests. Notaires enjoy a very privileged and highly respected position in French society.
One notaire can represent both parties in the transaction, or each party can have their own notaire. The notaire’s total fee on the transaction is set by law, and is simply divided between the notaires if each party is represented separately. Having your own notaire is ordinarily advisable, and will not cost more than sharing one with the other party.
- Nue-propriété: A legal term covering part of property law. It gives its holder the right to dispose of the property, but does not allow the use, or benefit thereof. The ‘nu-propriétaire’ (bare owner) pays the taxes and charges on the property. For example the bare owner of a building can rebuild it in the context of conservation. They can sell or sign over their rights. They cannot live in or rent the property. Additional rights of the bare owner are the rights of ‘l’usufruitier‘ (beneficial owner or life tenant).
- Promesse d’achat: The final written commitment to buy a property; your legal ownership document
- Promesse de vente: The “promise to sell” is a pre-contract for the purchase and sale of real estate drawn up by and signed before a notaire. The buyer will ordinarily pay a 10% good faith deposit into escrow within 7 days after signing the compromis, which the buyer will lose if he pulls out of the purchase without cause.
In contrast to a compromis de vente, the ‘promesse’ is a unilateral engagement by the seller to sell; the buyer can pull out at will and will suffer only the loss of the good faith deposit – the seller cannot force the buyer to purchase the property.
- Ravalement: Cleaning of the façade/exterior of a building. The law requires that this be done every ten years on Paris buildings at the cost of the co-owners. It is often done far less often than that.
- Règlement de copropriété: Co-ownership property regulations. This is a written document that stipulates the rights and obligations of copropriétaires (co-owners). It defines the different units (apartments,cellars, parking spaces…) and the coefficients used to calculate the charges. It defines the common areas of the building and the uses that they can be put to. The document also covers the rights and obligations of the copropriétaires (co-owners) of the building.
- Société civile immobilière (SCI): A holding company specifically structured for owning and managing properties in France. An SCI is pass-through entity, so its tax treatment is consistent with the residency and tax liability of its shareholders.
An SCI can be an interesting vehicle for property owned by a family or a group of unrelated persons, and facilitates the transfer of ownership over time. For non-resident buyers, an SCI allows them to ignore the forced inheritance laws in France, providing more flexibility to determine who the property goes to upon death of the owner(s). An SCI must have at least two shareholders, individuals or companies.
- Syndic de copropriété: A building manager elected by the co-owners to act on their behalf to manage their interests: take out insurance policies, employ personnel for the building, act on decisions made in the meetings, supervises the application of the co-ownership property regulations…. This representative also controls the funds of the copropriété (co-ownership property) and looks after the accounting. Every year, during the general meeting, they justify and explain the accounts. They can be elected for a period of one or several years.
- Syndicat des copropriétaires: The co-owners association. Its objective is the conservation of the building and the administration of the common areas. The decisions are made during an annual assemblée générale (general assembly). When an apartment changes hands in the building, the new buyer automatically becomes a member of the association.
- Une bonne copropriete: Amiable apartment owner’s association.
- Usufruit: A legal term covering part of the right of ownership (literally it refers to receiving the fruit resulting from the use of the property, fruit here meaning revenue, profit…). This concerns the right of use and benefit associated with a property where the bare ownership belongs to someone else. This is a temporary right and ends notably when the usufruitier dies. Additional ‘usufruitier’ rights are the rights of nu-propriétaire (bare property owner). The split of full ownership between nu-propriétaire (bare ownership) and usufruitier often arises because one of the parties in an inheritance (in general the spouse of the deceased) keeps the ‘usufruit’, and the direct heirs (in general the children) the nue propriété (bare ownership).
- Valeur vénale: Market value of a property.
- Viager: A sales contract for a property where the buyer (called the ‘débirentier’) pays the owner (the ‘crédirentier’) a very reduced price for the property (the ‘bouquet’) plus a monthly income for the duration of the latter’s life (‘rente viagère’). The amount of the ‘bouquet’ and the ‘rente’ are calculated in accordance with three parameters: the valeur vénale (market value) of the property, the life expectancy of the ‘crédit rentier’ and the yield of the capital invested. At the death of the seller, the use of the property transfers to the buyer.