An overview of the French buying process during the COVID-19 pandemic

Between January & mid-March this year, many Brits had embarked or were about to embark on their journey to buy a property and move to France before the end of the transition period on 31 December 2020. Then came the COVID-19 pandemic and long gone are the days, it seems, when Brexit was our client buyers’ ‘bête noire’.

The lockdown and social distancing restrictions that are, at the time of writing, still in place both in France and the UK have clearly thrown a spanner in the works; and for those buyers who were in the early stages of the buying process in France, many of them have understandably decided to hit the pause button while the real impact and extent of COVID-19 remain obscure.

The French conveyancing system is often viewed as slow and bureaucratic, so it is welcoming that French Notaires who oversee all sales and purchases in France have been prompt to react to the current unprecedented situation.

The majority of Notaires have set up remote working facilities and videoconferencing allowing them to continue to provide their services during the lockdown.

Where a completion date had already been agreed before the lockdown, and all the contract conditions have been met and pre-completion formalities completed, some buyers have managed to arrange virtual re-inspection of the property with the sellers and complete the transaction thanks to the introduction of measures allowing electronic signature of the sale and purchase deed via a secure e-sign software or by Power of Attorney without the requirement of certification of signature by a Notary Public.

In addition, many estate agents have reacted swiftly to the pandemic by offering virtual viewings of properties to prospective buyers who are also then able to sign the offre d’achat (offer letter) remotely.

Provided that the seller obtained the compulsory set of diagnostic surveys before the lockdown and that the surveys are still valid, buyers can still progress their purchase to at least the first stage of the process, which is the signature of the initial contract (compromis or promesse de vente).

The initial contract can either be prepared by the estate agent or the Notaire and signed by the parties by ‘compromis tournant’. The latter consists of asking buyers to print and sign the contract and all the annexes from their home, then send the signed copies by email first with the originals to follow by courier or secured post to the agent, Notaire or the sellers directly, for countersignature by them. Agents and many Notaires accept a remote signature by ‘compromis tournant’ and have done so for several years already. Notaires are also using digital signature systems (such as DocuSign) which are encrypted and allow the parties to sign contractual documents electronically and safely.

Following signature of the contract by all parties, individual buyers of dwellings in France are entitled to a ten-day cooling off period during which they can decide to withdraw from the purchase without penalty should they wish. If no withdrawal takes place during the cooling off period, the buyer will be committed to the purchase and will not be able to withdraw without penalty if all conditions of the contract are met.

The French Government has however introduced measures applicable during the COVID-19 lockdown period which means that certain time delays are suspended during the lockdown. This ‘freeze’ applies for instance to the purge of rights of pre-emption (which is where public authorities such as the Commune or an agricultural body called SAFER have two-months to decide whether or not to exercise its right of pre-emption and buy the property in lieu of the buyer).

Similarly, buyers who finance their purchase via a French mortgage are not expected to receive their loan offer until after the end of the lockdown and the loan condition inserted in the contract should reflect this. Whilst mortgage applications are still being processed, lenders who wish to send a valuer to inspect the property will not be able to arrange this for the time being.

Buyers who wish to have their own structural survey carried out before committing to a purchase should sit tight until the surveyors are willing and able to resume their work.

There may be a small number of buyers who are tempted to make an offer and proceed with a purchase simply on the basis of an online property search without having actually viewed the property in person. This is a very risky course of action which should be avoided. Whilst most buyers benefit from a cooling off period following signature of the contract, it is important to stress that any withdrawal by a buyer during his/her cooling off period is definitive and there is no obligation on a seller to enter into a renegotiation of the terms of the contract, should the buyer then wish to revive his/her purchase.

In addition, it remains to be seen whether a hardship clause allowing one party to request a re-negotiation of the contractual terms if an unforeseen event occurs, if inserted in the initial contract could successfully be invoked in this context.

It is thus unsurprising that some buyers will prefer to wait until the lockdown restrictions are lifted before they go full steam ahead. However, this does not mean that nothing can be done towards a future purchase in France and in fact now is a good time for prospective French property buyers to take professional advice in respect of their estate planning and inheritance situation in readiness for their purchase and / or relocation to France.

This article first appeared in French Property News – October 2020.