E a genc e

Property Guide

Banque et populaire à la fois. Soc iété Anonyme Coopérative de Banque Populaire, à capital variable, régie par les art icles L 512-2 et suivants du code monétaire et financier et l’ensemble des textes relatifs aux Banques Populaires et aux établissements de crédit. Soc iété de courtage d’assurance - Garant ie financière et assurance responsabilité civile professionnelle conformes aux art icles L 530-1 et L 530-2 du code des assurances. 560 801 300 RCS Toulouse.

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Thinking of buying a property

in France There are certain specifics to property buying in France. In order to help

with the formalities, the Banque Populaire Occitane has put together this

practical guide, so that you can have the following information at your

fingertips: it will give you a basic understanding of the French house purchase

procedure. We hope to give you practical advice and useful information

which we think is essential to know when buying a property in France.

The aim of this guide is to describe what the Mortgage à la française is.

P roperty G uide

Thinking of buying a property in France

Buying an older property 1 The estate agent - L’agent immobilier 1.1

Signing the pre liminary contract procedure 1.2

The conditional contract 1.3

The sale agreement - Le compromis de vente 1.4

The promise of a sale - La promesse de vente 1.5

L’acte authentique : signature of the deed of a sale 1.6

in the presence of notary

New house or flat 2 The proper ty developer - Le promoteur 2.1

Time sharing - La multipropriété 2.2

Sale and leaseback - La nouvell e propriété 2.3

Financing your project 3 Working out your budget 3.1

Drawing up your finance plan 3.2

General information on proper ty loans 3.3

Procedures 3.4

Buying an older property You will find the widest choice of houses and apartments

via estate agents, small ads, specialists or general interes t

newspapers.

To find “the house of your dreams” ask to be shown a selection.

Visit the property you have chosen several times,

before making a decision.

If you have decided to buy an older property and you have

used an “agent immobilier” or if you have simply dealt

directly with the vendor, take the time to examine

the property thoroughly.

If you have a good first impression don’t hesitate to ask

the opinion of an expert like an architect or surveyor.

They can give you essential information on the buildings

or on the future renovation work.

1.1 The estate agent - L’agent immobilier

the owners and the buyers.

“L’agent immobilier” is a professional who is required

to hold a certificate for property transactions

“carte de transactions sur immeubles” issued by the Prefet.

1.2 Signing the preliminary

contract procedure After having agreed a price with the vendor, you now

need to formally record the agreement by signing

a conditional contract. Once you have carried out these initial

formalities, you need to reserve the property.

In most cases, you sign a preliminary contract with a “notaire”

or an estate agent, in the form of a “promesse d’achat” (1.5)

or a “compromis de vente” (1.4).

This an intermediary for property transactions between

1.3 The conditional contract

The promise of a sale “compromis de vente” which can be

drafted and witnessed by a notary - notaire -

by an “acte authentique” or more simply by a third party

such as the estate agent.

The “compromis de vente” is a temporary contract

relating the conditions of a sale before the signature

of the definitive contact between the seller

and the buyer.To avoid “les pour parler”

the “compromis de vente” must be written with attention

and clarity. In that case, it is called a “sous seing privé”.

A notary can always advise you and collect together all

the necessary documents required to draft the deed of

sale “acte de vente”.

The notary is a “public official”, his main duty

is to ensure that all deeds signed under his responsibility

have authentic, absolute and incontestable value.

Expert reports (termites, lead, asbestos and energy efficiency)

are compulsory prior to the preliminary contract,

and are the responsibility of the vendor.

1.4 The sale agreement

Le compromis de vente

In France the most used form of conditional contract

is the Sale Agreement.

A reciprocal agreement to which the two parties concerned are

committed on signing.

The purchaser is committed to the agreed price

and the vendor to selling.

Main clauses

� Description and definition of the property.

� Vendor’s title to the property.

� The price and method of payment with or without recourse to a loan.

� The completion date

(signature of the deed of Sale in the presence of the notary).

� Deposit paid described as either - débit or acompte - usually 10% of the purchase price .

If a bank loan is required, the Sale Agreement will include

the conditional clause of obtaining a loan. If your loan

application is refused, the sale Agreement will be considered

null and void and you will reclaim your deposit.

� Cooling off period of 7 days: delay in which one may pull out or pay the deposit if one wants to go ahead.

1.5 The promise of a sale

La promesse de vente

With this type of contract, the vendor commits himself

to selling to the purchaser but allows the purchaser

an option to buy with a cooling off period of usually 3 months.

In return for the vendor‘s promise to sell to no other buyer

during the agreed period, the purchaser pays a deposit

to the notary of approximately 10 % of the purchase price,

known as the - indemnité d’immobilisation.

The deposit will be forfeited if the purchaser does not take up

the option within the specified time.

We advise you to avoid certain forms of agreement :

� The exchange of letters “l’échange de lettres”,

this form of agreement has a dangerous aspect, here the purchaser risks experiencing problems

at a later stage.

� The offer of sale “l’offre de vente”:

the purchaser should not settle for a simple offer

of sale signed by the vendor, as this may be withdrawn

at any time before the purchaser has formally accepted it.

� The offer of purchase “l’offre d’achat”:

in this kind of agreement the vendor is not committed

to sell, though the purchaser is irrevocably committed

to buying the property once the vendor

has accepted the offer.

1.6 L’acte authentique:

signature of the deed of sale in the presence of the notary

Once the notary has collected together all the information

required and all the relevant conditional clauses

have been satisfied, completion can take place

and the deed of sale - acte de vente - may be signed

in the presence of the notary.

The title deed is signed between you and the vendor on

the “notaire” ’s premises. It is the final stage involved

in buying your property and usually takes place three months

after signing the preliminary contract (the legal delay

is 90 days but may be changed with the vendor’s agreement).

All the get out clauses mentioned in the preliminary contract

must be fulfilled so that the sale can take place.

A few days prior to signing the title deed,

ask the “notaire” to send you the draft copy.

Read it through and talk to him/her about any points

that are unclear.

If you are considering buying a new property or building on your own, the procedure will be slightly different.

There are two possibilities open to you : to buy a property,

not yet constructed , based on an architect ‘s plan, “acheter

sur plan” or to buy a property with vacant

possession, “clés en main”.These types of property are usually

bought exclusively through a Property developer

“promoteur”.

2.1 The property developer

Le promoteur

The property developer is an expert who is responsible

for a construction project. He sells flats or other units

of property along with the land on which they are being built.

2.2 Time sharing - La multipropriété

Shares are purchased in a Civil Real Estate Company,

which owns a building, such as a block of flats.

This gives you part ownership of a particular flat

and you will have the right to use it for a given period

each year.You can resell or change this period

according to your own personal needs.

2.3 Sale and leaseback

La nouvelle propriété

You buy a property which you then leaseback

to the property company for a minimum of 9 years.

This gives the purchaser 30% discount of the purchase

price and absolves him of all services

and maintenance charges for that period.

The property company will collect the rent for the 9 years

period. Each year, you yourself have several weeks’ use

of the property, free of charge.

3.1 Working out your budget

In your budget you should consider the following costs:

– The purchase price of the property

– Renovation (get quotes)

– “Notaire” ’s fees

( similar to closing costs)

– Estate agent ‘s fees

– Others including mortgage fees

(hypotheque and bank file fees )

When applying for a loan, you must contribute some

personal investment.This is normally around 30%

of the amount needed for your project

(after deducting expenses such as the “notaire” ’s fees).

3.2 Drawing up your finance plan

Make an appointment with a Banque Populaire Occitane

advisor.We can carry out various simulations to offer you

the most appropriate loan for the situation.

Take care: You have to know the total amount of your debts

in France (loan applied for, loans currently being reimbursed,

fixed outgoings such as rent, maintenance payments etc.)

which must not exceed 30% of your income.

3.3 General information

on property loans

CURRENCY Euros

DURATION Can go to a maximum of 25 years

RATE The customer has a choice

of two types of rate:

� FIXED RATE: the rate cannot be modified for the entire duration of the loan.

The rate cannot be increased.

You cannot take advantage of reductions in the rate.

� FLEXIBLE RATE WITH FLOOR AND CEILING CAPS:

the rate is revised once a year according

to a reference rate, with floor cap

(the rate cannot drop below a certain threshold)

fixed when you sign the loan contract.

Compromise between the two other types of rate,

you know in advance what the maximum increase

in rate will be.

The rate is slightly less attractive from the outset

than the variable rate with a fixed rate option.

CREDITOR INSURANCE

This insures the borrowers and the joint borrowers

in the event of death. In this case, the outstanding

capital is fully reimbursed by the insurance company

if full insurance cover has been taken out.

FILE FEE

The bank charge varies according

to the amount of the loan, with a maximum.

Our advice: Banque Populaire Occitane advises

all borrowers and joint borrowers to take out

full insurance.

SECURITY

This is compulsory and comes in two possible forms:

- “Privilége du Preteur de Deniers” (PPD).

Generally used when buying resale property and written

into the title deed by the “notaire”.

This security enables the bank to seize the property

if you do not keep up your loan repayments.

The advantage of the PPD is that it costs less than

a traditional hypothèque.

-“Hypothèque”: when a loan is taken out for construction

or renovation, the bank cannot use a PPD.

In this case, a classic mortgage is required.

ACCEPTATION OF THE “OFFRE DE PRÊT”

Valid for 30 days including a compulsory 11 days cooling-off

period, called “délai de reflexion".

Once this period expires, you will need to send the offer back

to the bank duly filled in.

EARLY REPAYMENT PENALTIES

In the event of early repayment, you will have to pay a penalty

of up to 3% not outstanding capital.

COOLING OFF PERIOD

When buying an inhabitable property (new or resale),

you have a 7-day cooling off period during which you can

retract after signing the preliminary contract (SRU law).

3.4 Procedures

DOCUMENTS REQUIRED WHEN PURCHASING PROPERTY

When purchasing land or resale property: “attestation”

(certificate) from the “Notaire” describing the

property and the price.

For renovation :

� Quotes of the work.

� Copy of planning permission if applicable.

� Certificate of property or copy of the deed from the “Notaire”.

DOCUMENTS REQUIRED FOR A PROPERTY LOAN

� Annual information of income

(Tax certificate P60 in UK) and last three payslips

(borrower and joint borrower) or,

for self employed persons, profit and loss accounts

of the last two years with accountant assessment.

� Last three months bank statements.

� Bank certificates showing outgoing loans and mortgages, amount of monthly returns paid

and date of end of loan.

� Proof of pension for retired borrowers.

� Amount of alimony paid (if applicable).

� Proof of personal funds brought into the program.