The unilateral promise of sale is one of the two real estate pre-contracts that formally seal an agreement between the seller of a property and its future buyer. Unlike the compromise, the promise of sale only binds the seller, in accordance with Article 1124 of the Civil Code.
The purchaser reserves the property in return for a capital allowance. It generally corresponds to 5 to 10% of its market value and compensates for the time during which the property will not be offered for sale. As a rule, the buyer does not recover his capital allowance. However, there are special cases, especially when the compensation is framed by the conditions precedent provided for in the promise of sale, when refusing a mortgage for example.
Except in special cases, the buyer must exercise the option and proceed with the purchase within the period defined in the preliminary contract, often equivalent to 2 or 3 months. If he does not exercise the purchase option, the sale is cancelled and the property is put back on the real estate market.
What information must be included in the promise to sell?
The promise of sale, as a preliminary contract, is an official document whose drafting is subject to certain strict rules that must be scrupulously respected. It should include several pieces of information such as:
- The identity of the owner and the purchaser;
- The address of the property and a description (area, outbuildings, etc.);
- The origin of the property: construction, former owner, etc.
- The option period, i.e. the date on which the buyer undertakes to give his final answer;
- the date of availability of the property;
- The sale price validated by both parties as well as the terms of payment (mortgage, for example);
- The identity and fees of the real estate agent responsible for the sale;
- The withdrawal period;
- The technical diagnostics file;
The promise of sale also contains suspensive clauses that allow it to be cancelled in the event of non-realization. There are several conditions precedent, the most common of which are the following:
- Obtaining the mortgage: if the buyer finances the purchase through a mortgage, the promise of sale includes the suspensive clause of obtaining the loan. If the loan is granted, the sale is final. If the loan is refused, the purchaser, after proving that he has taken all the necessary steps to obtain the loan, may cancel the sale.
- The absence of urban planning easements: we are talking here about the right of a land on another land, in this case, that which is put up for sale. These easements often come from ancient customs and are passed from one owner to another. The most frequently encountered is the right of way.
- Non-exercise of a right of first refusal: this is a right of priority on the purchase of the property that can be exercised by a natural person (the current tenant, for example) or a legal person (a local authority). Before any sale, the notary verifies the existence of a right of pre-emption and ensures that the beneficiaries do not exercise it; He thus carries out the purge of the right of pre-emption.
In case of non-fulfilment of a condition precedent, the sale is cancelled and the purchaser recovers the security deposit previously paid.
How is the signing of the promise to sell?
There are two ways to sign a unilateral promise to sell:
- By authentic deed, drawn up by a public officer (notary, bailiff, etc.). This first option is only mandatory in the specific case where the validity period of the promise to sell exceeds 18 months.
- By private deed, drawn up by the seller and the buyer sometimes assisted by a real estate agent. It must then be registered with the tax office, within 10 days of signature. Registration is at the expense of the purchaser, for about 125 €.
Should I sign before a notary or not?
There is only one situation requiring a buyer to sign a promise of sale before a notary. If the period of validity of the unilateral promise to sell is greater than 18 months, the preliminary contract must be executed by a public officer.
Apart from this situation, the signing of a promise of sale is not necessarily carried out before a notary. A buyer and seller can very well sign a promise to sell with the assistance of a real estate agent or by themselves. It is then called the private deed.
What is the withdrawal period?
As part of a promise to sell, only the buyer can retract. He then has a period of 10 calendar days, from the day after the signature, to announce his willingness to renounce the purchase of the property. If the 10th day is a Saturday, Sunday or public holiday, the end of the withdrawal period will take effect on the following working day.
The seller is required to honor the sale. Otherwise, the buyer can sue him in order to assert his rights and request the forced execution of the sale.
Any withdrawal must be announced within the time limit by registered letter with acknowledgment of receipt.
What is the difference between a promise and a sales agreement?
The major difference between the unilateral promise to sell (PUV) and the synallagmatic promise to sell (PSV), also called sales agreement, lies in the constraint they cause for one or more parties of a real estate sale. Thus, where the sales agreement concerns both the seller and the buyer, the promise of sale only commits the owner of the property to be sold.
In practice, with the promise of sale, only the seller is committed. The purchaser places a call option on a fixed price and for a period determined by the contract, but there is no obligation to buy. He may, within the time limit, exercise the option and proceed with the purchase or not exercise the option and thus, not proceed with the sale process.
The sales agreement, on the other hand, obliges the seller and the buyer. The former undertakes to sell and the purchaser to buy at the price fixed in the preliminary contract. As for the promise of sale, the withdrawal period is 10 days for the buyer and the security deposit corresponds to 5 to 10% of the value of the property.
Remember that the seller can not withdraw in either case As soon as the promise or the sales agreement is signed, he undertakes to sell his property.