LeaseLegal

What did your Notaire do for you ?

In France, a NOTAIRE is the professional charged with real estate transactions. It is different to Ireland or the UK where a solicitor is the professional who handles the sale of a property. The role of a Notaire is fundamentally different in that he acts for both parties in the sale and is therefore duty-bound to be impartial and represent the interests of both the purchaser and the seller.

The French notaire has a duty to advise: the client expects a French notaire to explain the various options open to him as well as the consequences of the deeds/documents he signs.

This duty to advise implies that the French notaire is neutral and impartial : a notaire chosen by one client has an obligation of fairness towards him and towards the other co-contracting parties.

Solicitors should not be required for this type of transaction, and would not normally be used in France.

However the Notaire, in many cases, never warned the purchaser of the fundamental and significant facts concerning what they were purchasing. Facts that a consumer could not have known, and more especially a foreign consumer:

  • the 9 (or 11 etc) year lease that they purchaser signed went on forever under French law unless compensation was paid to the tenant at the end of the first lease

Many Notaires have claimed that the lease was not part of their remit, that it was signed between the developer and the purchaser. In my view this is obfuscation. The fact that the property was a leaseback property is stated in the deeds. The two can not be separated.

The notaires did not warn that:

  • this lease was a commercial lease and was heavily favoured under French law on the tenant

See below from the French Notaires website on the nature of a Commercial lease:

During the term of the lease, the tenant is almost immune from eviction; they can only be evicted in special circumstances and only if the owner provides compensation

..

At the end of nine years, the tenant has the right to have their lease renewed for the same term, at a rent that may not exceed an upper limit. If the landlord does not wish to renew the lease, they are required to pay the tenant compensation for non-renewal of the tenancy. The tenant is entitled to be fully compensated for the loss. The compensation may correspond to the market value of the business.

The notaires did not warn that:

  • The property was in a RdT (Residence de Tourisme) and what that meant in terms of planning & usage laws
  • The mortgage with the French bank left the owner with his home in Ireland vulnerable if the ‘guaranteed’ rent failed to be paid
  • Did not advise that a ‘notarised’ lease might provide some more protection to the purchaser
  • The ‘guaranteed’ rent was not guaranteed at all and there was a pattern of ‘failure’ of these projects

For many purchasers of French leaseback properties they never met the Notaire. The deeds were notarised by a qualified individual in Dublin etc, as they were advised.

In one case, the fees charged by the Notaire for the Deed of Sale (Frais d’acte de vente) alone for a small 2-bed property were almost €7,000. The notaire also legalises the mortgage loan and there is a hefty fee for this also (over €3,000). 40% of the fee could be taxes which go to the French government.

There is a fee calculator on the notaire.fr site. Does it calculate what you were charged ?

Multiple notaires are being sued in France in relation to their role in the sale of these.

 

One thought on “What did your Notaire do for you ?

  1. We purchased a leaseback property in 2005. Our documents were notarised in Northern Ireland. Our development has some 400 units, all of which were dealt with by the same notaire. Our properties were each sold with an allocated numbered parking space. We are the only property owners on the site who do not have the allocated parking space included in our deeds, despite paying the same price for the property as everyone else. Thousands of euros and hours of anguish later, we still have no space on our deeds. Some notaire!!

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