Selling an apartment in Paris returns to a more streamlined procedure
Housing Ministry passes reforms aimed at reducing some of the newly-enacted requirements that were seriously slowing the process of selling an apartment in Paris.
On August 26th, Minister of Housing Sylvia Pinel presented a new measure to the Council of Ministers to amend certain provisions of the Loi Alur and thus facilitate real estate transactions on Parisian apartments. Garnering widespread support from real estate professionals, the proposal was passed into law two days later.
Apartment buildings in Paris are owned in copropriété, meaning that each apartment is a separate lot with owners jointly holding the common areas. The legal structure is similar to condominiums in the United States. Annual meetings of the co-owners decide on future building projects and needed renovations; each building usually has a syndic that manages the meeting, oversees insurance and maintenance and represents the building’s interest in disputes with other properties or between the co-owners.
When selling a property in a copropriété, the seller is required to provide a number of documents relating not only to the property itself, but to the building as well.
Passed in March 2014, the Loi Alur added significant burdens to this process. Under this legislation, the seller had to provide a significant number of new documents relating to the building’s organization, as well as the financial situation of both the co-ownership and the seller himself. The cost of this document production reached 1000 euros, and often more.
At the time of the Loi Alur reform, Frédéric Labour, notaire in Corbeil-Essonnes, had complained “it’s a disaster, we do not understand the point of this reform”, adding that most of the new documents requested were “of no interest to the buyer”.
The union of French notaires had particularly reproached the new law for creating an “obstacle course” in the process of finalizing even the most simple preliminary contract for a Paris apartment sale. They noted that since the Loi Alur came into effect, the time needed to sign a preliminary contract went, on average, from three to four days to 20, and these contracts, once averaging about 30 pages, were now 300 to 400 pages long. “This is not an acceptable way to engage in a dynamic recovery for the market”.
The ordinance in question, passed on August 28th, amends the provisions the Loi Alur had brought in, thus facilitating these real estate transactions.
Main changes involve the following:
-The information and documents required for the sale to be finalized do not need to be attached to the preliminary agreement. They can be handed over to the buyer separately and by any medium, including by digital form.
-Financial information regarding the co-ownership building must only include information useful to the buyer.
-Additional information to be communicated will depend upon the buyer’s particular situation. For instance, if the buyer is already an owner in the building, the seller is not required to provide information on the copropriété.
Maître Pierre-Alain Conil, a Paris notaire with a large international clientele, finds the changes “a welcome simplification the real estate sector had been anxiously awaiting since the Loi Alur’s implementation 18 months ago”.
Despite the purpose of the Loi Alur to protect property buyers with full disclosure, “in practice the legislation weighed heavily on the whole process”, says Maître Conil, and thus did very little to achieve that end. Many of these documents were already being required by the sellers’ notaire to establish the preliminary sales agreement.
According to Maître Conil, “these new provisions will correct the overzealous legislation and help facilitate the entire process”.
Nonetheless, drafting a notarized purchase and sale agreement remains a complex legal procedure that offers important protection for buyers, particularly those less experienced in real estate or foreigners who don’t have a full command of the French language.
Both the Supreme Council of Notaries and the National Council of Real Estate Transaction and Management (CNTGI) — comprised of both professionals and consumers — reacted favorably to the August 28th decision. According to the CNTGI, the move “not only simplifies the legal process, but gives confidence to both buyers and sellers — essential to help revive the sector.”
Photo credit: Wikimedia Commons / Besopha