OUR TRANSPARENT TRANSACTIONS

The Alur law
Buyer protection

LA LOI ALUR was published in the Journal officiel on March 26, 2014.
It takes the official name of law n°2014-366 of March 24, 2014 for access to housing and renovated urbanism.
The Alur real estate law introduces important changes for both tenants and landlords.

PURGE PROCEDURE
REQUIRED DOCUMENTS

The following provisions apply to the sale of a lot or fraction of a lot, or to the transfer of a real property right relating to a lot or fraction of a lot, in a building used wholly or partly for residential purposes and subject to co-ownership regulations.
In order to purge the cooling-off period in the case of a promesse de vente, or the cooling-off period prior to an acte authentique de vente which has not been preceded by a promesse, the purchaser must be provided with the following documents and information * no later than the date of signature of the promesse:

• The condominium by-laws and the descriptive statement of division, as well as any deeds amending them, if they have been published.
• Minutes of general meetings over the past three years, if available.
• All documents relating to the financial situation of the co-ownership and the selling co-owner, namely :
  • The amount of current projected budget charges and non-projected budget charges paid by the vendor co-owner during the two financial years preceding the sale.
  • Sums likely to be owed to the syndicat des copropriétaires by the purchaser
  • The overall state of unpaid charges within the syndicate and the debt to suppliers.
  • Where the syndicat des copropriétaires has a works fund, the amount of the share of the works fund attached to the main lot sold and the amount of the last contribution to the fund paid by the selling co-owner for his lot.

* News detail LOI ALUR – Article 54 / Promise to sell a co-ownership lot – Effective 27/03/2014

The procedures for notifying documents attached to a promise to sell a condominium lot have been simplified, in particular by the ordinance of August 27, 2015, which, in addition to reducing the number of documents to be sent, now authorizes the replacement of the attachment of numerous documents by their delivery prior to signature of the deed, including in dematerialized form if the purchaser accepts this.
When documents are handed over prior to signature, care must be taken to mention this in the deed, otherwise the withdrawal period may not start immediately.

EXTENSION OF THE COOLING-OFF PERIOD*.

Among the many changes introduced by the Macron law, the legislator chose to extend the right of withdrawal and the right of reflection provided for in article L 271-1 of the CCH from 7 to 10 days (Law 2015-990 of 6-8-2015 art. 210, II).
This change reflects a desire to bring this cooling-off period closer to the 14-day period applicable under consumer law.

BUYER PROTECTION THE SRU LAW

The SRU law on Solidarity and Urban Renewal, passed in 2000, lays down rules on social diversity, urban planning (PLU) and the protection of potential buyers and tenants.
Mandatory cooling-off period for property purchases The SRU law introduced a 7-day cooling-off period for non-business buyers of new or existing housing.
This does not apply to the purchase of business premises.
This mandatory cooling-off period runs from the day following the first registered letter notifying the buyer of the preliminary contract.
When the deed of sale has not been preceded by a pre-contract, the buyer must be notified of the proposed sale in order to open up a 7-day cooling-off period.
Once this period has elapsed, if no indication has been received from the purchaser, the sale is deemed to be firm, except in the case of a suspensive clause.

This retraction does not have to be justified.
The purchaser will be released from his commitment without having to pay any penalties.
The aim of this system is to prevent the buyer from being prejudiced by any possible haste at the time of purchase.
It applies to all types of property (new or old, houses or apartments).
The SRU law prohibits non-professional sellers or private individuals from demanding any payment before or during the cooling-off period.
Limiting the risk of fraud, this regulation ensures that the buyer has a genuine cooling-off period, free from any financial constraints or concerns.
Prohibition of offers to purchase with payment.
The offer to purchase, or (unilateral) promise to purchase, must not include any payment of money to the seller.
The payment of a deposit (around 10% of the price), cashed by the seller to formalize the commitment made, is now prohibited by law.

Modification of the provisions of the SRU law:

The ENL law of July 13, 2006 modified the initial provisions of the SRU law.
Non-professional purchasers can now withdraw for seven days from “any contract for the construction or acquisition of a building for residential use”. A real estate professional buying for personal purposes can benefit from this protection, as can a private individual buying a property to rent out. The new article L.271-1 of the ENL law stipulates that this withdrawal period is only valid in the case of a private or notarized preliminary contract. Unilateral offers, countersigned purchase offers and mixed-use properties (business and residential) are excluded from the scheme.

The suspensive condition :

This clause enables the beneficiary to withdraw from a deed of sale in the event of an unforeseeable event occurring after signature.
The most common example is the suspensive condition of obtaining a loan, which makes completion of the sale conditional on the buyer obtaining the necessary financing.
If the buyer refuses to obtain a loan, he or she has the right to cancel the deed of sale without suffering any damage.
Once the deed of sale has lapsed, the buyer will recover the full amount of his deposit.

However, certain conditions must be met: the loan application (included in the compromis de vente) must have been made to a bank at least 10 days after the compromis.
The buyer is required to inform the real estate agency within 30 to 45 days of the compromise of any rejection of his financing.
This suspensive clause may also apply in the event of a right of pre-emption by the municipality, or following the refusal of a building permit.

The warranty for hidden defects :

Any buyer who discovers a problem after the sale has taken place has a right of action against the seller: this is known as an action en garantie des vices cachés.
A hidden defect cannot exist if the seller is unaware of it.
This means that the buyer has no recourse on all the points covered by the mandatory diagnostics provided prior to the sale.

The purchaser has two years from the discovery of the defect to bring an action under the warranty.

Three conditions must be met:

• The defect must predate the sale
• The defect must be hidden and unknown to the buyer
• The defect must render the item sold unfit for its intended use.

Under article 1644, the purchaser may obtain annulment of the contract of sale or a reduction in the sale price.
If the sale is annulled, the buyer returns the property.
The seller refunds the price of the property, the costs of legal proceedings and transfer, as well as any interest accrued since payment.

The judge can set up a simple action to reduce the price.
In this case, the experts must estimate the loss in value resulting from the defect, based on the cost of the work required to restore the property to its original state.
The buyer then receives part of the price back, and keeps the property.
The buyer may also be awarded damages if the seller is found to have acted in bad faith.