Property glossary
A to C
Acte authentique (Deed of Sale)
This contract must be drawn up by a notaire in order that it can be registered in the bureau des hypothèques (mortgage registry) make the deed opposable to all third parties, including those not referred to in the contract. All property sales or exchanges must be covered by an acte authentique.
Acte sous seing privé (Private Treaty)
This contract is drawn up and signed by the parties on a private basis, with no official involvement. In terms of property sales, it may act as a preliminary contract entered into prior to conclusion of the transaction. It may also be referred to as an acte préalable (preliminary contract) or avant-contrat (pre-contract), since it is subsequently replaced by a definitive contract. The acte sous seing privé is often used for rental agreements.
Agent immobilier (Estate Agent)
A property market intermediary who brings vendors and buyers (or landlords and tenants together) and receives payment in the form of a commission when the sale (or rental) is finalised. In order to proceed, the estate agent must be appointed in writing by the vendor to secure a buyer (or tenant) at a certain price (Hoguet law of 2 January 1970). This price is usually reduced if no buyer is found, but only with the written agreement of the vendor.
Architect
In France, no one may practice as an architect unless they possess the appropriate recognised qualification, and any construction of over 170 m² SHON (total floor area) must be designed by a qualified architect, who must also sign the plans.
Architects who also act in a “maîtrise d’œuvre” (project management) capacity are legally responsible for construction faults, and must cover this liability using a suitable insurance policy. There are approximately 27,000 practising architects in France.
Assurance Décès/Invalidité/Incapacité (Life, Illness & Incapacity Insurance)
Required by all mortgage lenders, this type of insurance ensures the repayment of all outstanding amounts (in the event of death or complete and permanent illness) or regular payments (during the period of total or partial incapacity or illness).
Assurance dommages-ouvrage (Owner’s Damage Insurance)
As maître d’ouvrage (project owner), Bouygues Immobilier has owner’s damage insurance to cover any problems affecting the normal use of the building and making it unsuitable for its purpose.
Problems of visual appearance are not covered.
This insurance allows the project owner to receive rapid payment without the need to establish the responsibility of individual project team members (architects, contractors, builders, developers, etc.).
Assurance Perte d’emploi (Unemployment Insurance)
This insurance is offered to mortgage borrowers as an option, and allows the borrower to claim for part of his mortgage payments in the event of unemployment. As with all policies, remember to read the conditions carefully before committing yourself.
Avant-contrat (Pre-contract)
This is a voluntary agreement under which 2 or more parties agree to enter into a contract at a future date, e.g. a (agreement to sell) or promesse de prêt (loan agreement).
Cas de force majeure (force majeure)
Force majeure means any unforeseeable and unavoidable event outside the control of the parties (storms, acts of God, etc.) which results in the non-fulfilment of the contract.
Caution (Guarantor)
This refers to a physical person or corporate entity agreeing to act as guarantor for the repayment of a debt in the event that the main borrower defaults.
It is also possible to provide security in the form of property: this is referred to as mortgage guarantee.
Co-emprunteur (Co-borrower)
A loan agreement may be signed by a sole borrower or by a borrower and co-borrower. Where the latter is the case, both are jointly and severally liable for fulfilment of the loan agreement.
Compromis de vente (Provisional Contract)
This is a pre-contract signed by both the vendor and the buyer of a property, either privately or in the presence of a legal professional. The completion of a property transaction requires the drafting of a contract and compliance with formalities that take a minimum length of time. If either party changes his or her mind, these expensive steps will have been undertaken for no purpose, so it is normal practice to begin the process with the signature of a compromis de vente, in which both vendor and buyer agree the selling price and set a deadline for completion of the sale. An advance payment (usually 5% of the price) is made at the time the contract is signed as a guarantee of fulfilment.
The compromis de vente usually contains clauses suspensives (provisional conditions). Under such conditions, the buyer’s commitment to purchasing a building plot may be subject to obtaining planning (or demolition) permission or the granting of a loan. If these conditions are not fulfilled, then the buyer is not obliged to buy, and the vendor is free to sell to another buyer, whilst retaining the deposit to cover the costs involved.
(See also promesse de vente )
Condition suspensive (Provisional condition)
This condition is dependent, for example, on an uncertain future event which would, if it occurs, have the effect of suspending the validity of an agreement (e.g. an agreement to sell subject to the provisional condition of obtaining planning permission).
If the condition is not fulfilled, the related contract is considered null and void.
Copropriété (Co-ownership)
A legal entity made up of all the owners sharing the same building, and which manages all the communal areas of the building (corridors, stairways, elevator, roof, building structure, mains utility connections, etc.). The co-ownership is also responsible for maintaining the grounds, paying taxes, acting as the lessee where the land is rented and as employer of any security staff employed, etc. (see the Co-ownership Code).
The règlement de copropriété (declaration of codes, covenants and restrictions) determines the number of shares in the building held by each owner. Decisions are taken on the basis of a majority of shares held. The co-ownership is financed jointly by the owners in proportion to the amount of shares held.
The co-ownership may be managed directly and free of charge by an elected co-ownership conseil syndical (management committee) or by a professional syndic (management company) paid to provide the service.
The co-ownership rules for any property shared by 2 or more co-owners are drawn up by a notaire. They set out the details of the various properties, quantified in terms of shares held in the communal parts of the building and identifies the rights and obligations of the co-owners.
It is important to avoid confusing co-ownership with joint-ownership (look up this word).
Copropriété horizontale (Horizontal Co-ownership)
By applying the same principle, estate developments can also be managed under a co-ownership arrangement (with co-ownership rules and an elected management committee) to provide for the maintenance of private roads and open spaces.
Crédit-bail immobilier (Finance Lease)
Under this system, the buyer of a residential (or business) property begins as the tenant of the finance company funding the construction, and becomes the owner only when the final payment has been made. The finance company remains the owner of the building until the buyer has repaid the entire amount borrowed. Ownership is not transferred until the final payment has been made. This system was designed to boost the lender’s guarantee, and therefore reduce the interest rates applied to cover lending risks.
Crédit immobilier (Property Loan)
Most home buyers have no choice but to borrow to finance their purchases. The ability of potential buyers to fund the purchase of a property at a given price will therefore depend greatly on the interest rate charged.
The interest rate charged takes account of three components:
- Inflation. Property loans are long-term credit, and no one can predict how inflation may develop over such periods. One solution is the indexation of repayments against a suitable and reliable official index.
- The risk of non-repayment. This risk is unique to each borrower, and explains why the rates offered may differ from borrower to borrower. One way of minimising the rate is to find a legal arrangement under which the building itself can be offered to the lender as security. However, such guarantees would be worthless if the borrower has no practical means of repossessing the building and evicting a borrower who fails to keep up with the repayments.
- The costs involved in managing the loan and advancing the money itself. Over such a long period, the actual cost of money may also vary. One solution to this problem is the variable rate loan, where the rate charged is indexed against the average bank rate for each year.
Accepting that the property loan repayments should not account for more than one-third of the borrower’s income, and that the maximum credit period should not exceed 25 years, the maths show that the maximum borrowing capacity of a family is therefore equivalent to approximately 6 years’ income at an actual rate of 3%, and 5 years’ income at an actual rate of 5%.
Crédit-relais (Bridging Loan)
This is a fixed-rate property loan intended to finance a new property purchase whilst the buyer waits for the sale of his or her previous home. The amount of the loan may provide all or part of the borrower’s personal contribution to the new mortgage, and will be repaid as soon as the old property is sold.
This contract must be drawn up by a notaire in order that it can be registered in the bureau des hypothèques (mortgage registry) make the deed opposable to all third parties, including those not referred to in the contract. All property sales or exchanges must be covered by an acte authentique.
Acte sous seing privé (Private Treaty)
This contract is drawn up and signed by the parties on a private basis, with no official involvement. In terms of property sales, it may act as a preliminary contract entered into prior to conclusion of the transaction. It may also be referred to as an acte préalable (preliminary contract) or avant-contrat (pre-contract), since it is subsequently replaced by a definitive contract. The acte sous seing privé is often used for rental agreements.
Agent immobilier (Estate Agent)
A property market intermediary who brings vendors and buyers (or landlords and tenants together) and receives payment in the form of a commission when the sale (or rental) is finalised. In order to proceed, the estate agent must be appointed in writing by the vendor to secure a buyer (or tenant) at a certain price (Hoguet law of 2 January 1970). This price is usually reduced if no buyer is found, but only with the written agreement of the vendor.
Architect
In France, no one may practice as an architect unless they possess the appropriate recognised qualification, and any construction of over 170 m² SHON (total floor area) must be designed by a qualified architect, who must also sign the plans.
Architects who also act in a “maîtrise d’œuvre” (project management) capacity are legally responsible for construction faults, and must cover this liability using a suitable insurance policy. There are approximately 27,000 practising architects in France.
Assurance Décès/Invalidité/Incapacité (Life, Illness & Incapacity Insurance)
Required by all mortgage lenders, this type of insurance ensures the repayment of all outstanding amounts (in the event of death or complete and permanent illness) or regular payments (during the period of total or partial incapacity or illness).
Assurance dommages-ouvrage (Owner’s Damage Insurance)
As maître d’ouvrage (project owner), Bouygues Immobilier has owner’s damage insurance to cover any problems affecting the normal use of the building and making it unsuitable for its purpose.
Problems of visual appearance are not covered.
This insurance allows the project owner to receive rapid payment without the need to establish the responsibility of individual project team members (architects, contractors, builders, developers, etc.).
Assurance Perte d’emploi (Unemployment Insurance)
This insurance is offered to mortgage borrowers as an option, and allows the borrower to claim for part of his mortgage payments in the event of unemployment. As with all policies, remember to read the conditions carefully before committing yourself.
Avant-contrat (Pre-contract)
This is a voluntary agreement under which 2 or more parties agree to enter into a contract at a future date, e.g. a (agreement to sell) or promesse de prêt (loan agreement).
Cas de force majeure (force majeure)
Force majeure means any unforeseeable and unavoidable event outside the control of the parties (storms, acts of God, etc.) which results in the non-fulfilment of the contract.
Caution (Guarantor)
This refers to a physical person or corporate entity agreeing to act as guarantor for the repayment of a debt in the event that the main borrower defaults.
It is also possible to provide security in the form of property: this is referred to as mortgage guarantee.
Co-emprunteur (Co-borrower)
A loan agreement may be signed by a sole borrower or by a borrower and co-borrower. Where the latter is the case, both are jointly and severally liable for fulfilment of the loan agreement.
Compromis de vente (Provisional Contract)
This is a pre-contract signed by both the vendor and the buyer of a property, either privately or in the presence of a legal professional. The completion of a property transaction requires the drafting of a contract and compliance with formalities that take a minimum length of time. If either party changes his or her mind, these expensive steps will have been undertaken for no purpose, so it is normal practice to begin the process with the signature of a compromis de vente, in which both vendor and buyer agree the selling price and set a deadline for completion of the sale. An advance payment (usually 5% of the price) is made at the time the contract is signed as a guarantee of fulfilment.
The compromis de vente usually contains clauses suspensives (provisional conditions). Under such conditions, the buyer’s commitment to purchasing a building plot may be subject to obtaining planning (or demolition) permission or the granting of a loan. If these conditions are not fulfilled, then the buyer is not obliged to buy, and the vendor is free to sell to another buyer, whilst retaining the deposit to cover the costs involved.
(See also promesse de vente )
Condition suspensive (Provisional condition)
This condition is dependent, for example, on an uncertain future event which would, if it occurs, have the effect of suspending the validity of an agreement (e.g. an agreement to sell subject to the provisional condition of obtaining planning permission).
If the condition is not fulfilled, the related contract is considered null and void.
Copropriété (Co-ownership)
A legal entity made up of all the owners sharing the same building, and which manages all the communal areas of the building (corridors, stairways, elevator, roof, building structure, mains utility connections, etc.). The co-ownership is also responsible for maintaining the grounds, paying taxes, acting as the lessee where the land is rented and as employer of any security staff employed, etc. (see the Co-ownership Code).
The règlement de copropriété (declaration of codes, covenants and restrictions) determines the number of shares in the building held by each owner. Decisions are taken on the basis of a majority of shares held. The co-ownership is financed jointly by the owners in proportion to the amount of shares held.
The co-ownership may be managed directly and free of charge by an elected co-ownership conseil syndical (management committee) or by a professional syndic (management company) paid to provide the service.
The co-ownership rules for any property shared by 2 or more co-owners are drawn up by a notaire. They set out the details of the various properties, quantified in terms of shares held in the communal parts of the building and identifies the rights and obligations of the co-owners.
It is important to avoid confusing co-ownership with joint-ownership (look up this word).
Copropriété horizontale (Horizontal Co-ownership)
By applying the same principle, estate developments can also be managed under a co-ownership arrangement (with co-ownership rules and an elected management committee) to provide for the maintenance of private roads and open spaces.
Crédit-bail immobilier (Finance Lease)
Under this system, the buyer of a residential (or business) property begins as the tenant of the finance company funding the construction, and becomes the owner only when the final payment has been made. The finance company remains the owner of the building until the buyer has repaid the entire amount borrowed. Ownership is not transferred until the final payment has been made. This system was designed to boost the lender’s guarantee, and therefore reduce the interest rates applied to cover lending risks.
Crédit immobilier (Property Loan)
Most home buyers have no choice but to borrow to finance their purchases. The ability of potential buyers to fund the purchase of a property at a given price will therefore depend greatly on the interest rate charged.
The interest rate charged takes account of three components:
- Inflation. Property loans are long-term credit, and no one can predict how inflation may develop over such periods. One solution is the indexation of repayments against a suitable and reliable official index.
- The risk of non-repayment. This risk is unique to each borrower, and explains why the rates offered may differ from borrower to borrower. One way of minimising the rate is to find a legal arrangement under which the building itself can be offered to the lender as security. However, such guarantees would be worthless if the borrower has no practical means of repossessing the building and evicting a borrower who fails to keep up with the repayments.
- The costs involved in managing the loan and advancing the money itself. Over such a long period, the actual cost of money may also vary. One solution to this problem is the variable rate loan, where the rate charged is indexed against the average bank rate for each year.
Accepting that the property loan repayments should not account for more than one-third of the borrower’s income, and that the maximum credit period should not exceed 25 years, the maths show that the maximum borrowing capacity of a family is therefore equivalent to approximately 6 years’ income at an actual rate of 3%, and 5 years’ income at an actual rate of 5%.
Crédit-relais (Bridging Loan)
This is a fixed-rate property loan intended to finance a new property purchase whilst the buyer waits for the sale of his or her previous home. The amount of the loan may provide all or part of the borrower’s personal contribution to the new mortgage, and will be repaid as soon as the old property is sold.
D to K
Démembrement du droit de propriété (Division of Ownership)
Division of the property between usufruit (the right to use the property) andnue propriété (reversionary interest where the purchaser has no occupational rights over the property until the death or prior surrender of the life tenant) (find out more about these words). The term may also refer to the division between ownership of the land beneath the building (which confers no right other than to receive rent) and ownership of the building itself.
Désordre (Disturbance)
This legal term is used in connection with the fault-free completion guarantee.
The concept of disturbance (the objective occurrence of a defect regardless of its cause) is more serious than that of bad workmanship or fault (the practical effects of a defect usually occurring as a result of human error).
Droits (taxe) d'enregistrement (Registration fees)
Tax payable on property sales at the time of their registration.
Droits (taxe) de succession (Inheritance tax)
Tax payable on inherited property.
Frais de dossier (Mortgage arrangement fee)
The amount of this fee varies from bank to bank and the type of loan requested. It is charged by the lending institution to cover its costs in setting up the property loan.
Frais de notaire (Notaire’s fees)
These cover 3 types of fee: the cost of drawing up contracts (which is how the notaire earns his or her income), the duties and taxes payable on all property transactions and the disbursements involved in paying for the external services and documents required to complete the purchase (local searches, mortgages, surveyor, etc.).
Garantie de bon fonctionnement (Fixtures and Fittings Guarantee)
This covers the builder’s liability to ensure correct operation of all those fittings integral to the construction (subject to these being included in the contract) for a period of 2 years.
Garantie de parfait achèvement (Guarantee of Fault-free Completion)
This covers the builder’s liability to repair any damage (or disturbances) observed on acceptance or notified in writing during the first year.
This insurance is compulsory.
Garantie décennale (10-year Guarantee)
For a period of 10 years from acceptance of the works, the builder is liable for any defects capable of compromising the structural integrity of the building, rendering it unfit for use or affecting an integral component of the building (components whose removal would damage the building).
Gros-œuvre (Building Shell)
This term covers those load-bearing elements that contribute to the stability and solidity of the building (foundations, supporting walls, columns and floors).
The materials normally used are concrete, steel and concrete blocks.
The contractor, architect, developer and building control department (foundations, supporting walls, columns and floors) are individually liable within their own specialist fields of involvement and for a period of 10 years for all disturbances rendering the building unfit for use.
Hypothèque (Mortgage charge)
The guarantee given by the borrower to the lender, under which the latter may repossess a building it owns in the event of non-payment by the borrower. The implementation of this guarantee requires the lender to be certain that there is no existing mortgage on the building concerned in respect of one or more other lenders. If this were the case, then the guarantee would be worthless. This is why mortgage charges are registered with an official body that allocates a date certaine (registration date) to each mortgage charge.
Indice du prix de la construction INSEE (INSEE construction cost index)
This index is regularly used as the reference index for many types of contract (rental contract where the rent is set by the landlord, commercial leases, off-plan property sales, etc.).
This index is based on the actual costs involved in building new homes, excluding the cost of the land, legal fees, duties and taxes, the cost of developing the land itself and construction-related fees.
It is published quarterly and takes account of all construction costs, contractor profitability and profit margin.
Indivision (Joint-ownership)
Right of ownership held jointly by multiple owners. Under French law, management decisions must be unanimous. In the event of disagreement, a joint owner may request the dissolution of the joint-ownership arrangement and leave it amicably or, failing that, resort to law. Such joint-ownership arrangements usually result from an inheritance shared amongst several beneficiaries or a property purchase by an unmarried couple.
One possible alternative to joint-ownership is the société civile immobilière (SCI) (look up this word) in which decisions are made on the basis of a majority vote, pro-rata of the shares owned individually by its members.
Division of the property between usufruit (the right to use the property) andnue propriété (reversionary interest where the purchaser has no occupational rights over the property until the death or prior surrender of the life tenant) (find out more about these words). The term may also refer to the division between ownership of the land beneath the building (which confers no right other than to receive rent) and ownership of the building itself.
Désordre (Disturbance)
This legal term is used in connection with the fault-free completion guarantee.
The concept of disturbance (the objective occurrence of a defect regardless of its cause) is more serious than that of bad workmanship or fault (the practical effects of a defect usually occurring as a result of human error).
Droits (taxe) d'enregistrement (Registration fees)
Tax payable on property sales at the time of their registration.
Droits (taxe) de succession (Inheritance tax)
Tax payable on inherited property.
Frais de dossier (Mortgage arrangement fee)
The amount of this fee varies from bank to bank and the type of loan requested. It is charged by the lending institution to cover its costs in setting up the property loan.
Frais de notaire (Notaire’s fees)
These cover 3 types of fee: the cost of drawing up contracts (which is how the notaire earns his or her income), the duties and taxes payable on all property transactions and the disbursements involved in paying for the external services and documents required to complete the purchase (local searches, mortgages, surveyor, etc.).
Garantie de bon fonctionnement (Fixtures and Fittings Guarantee)
This covers the builder’s liability to ensure correct operation of all those fittings integral to the construction (subject to these being included in the contract) for a period of 2 years.
Garantie de parfait achèvement (Guarantee of Fault-free Completion)
This covers the builder’s liability to repair any damage (or disturbances) observed on acceptance or notified in writing during the first year.
This insurance is compulsory.
Garantie décennale (10-year Guarantee)
For a period of 10 years from acceptance of the works, the builder is liable for any defects capable of compromising the structural integrity of the building, rendering it unfit for use or affecting an integral component of the building (components whose removal would damage the building).
Gros-œuvre (Building Shell)
This term covers those load-bearing elements that contribute to the stability and solidity of the building (foundations, supporting walls, columns and floors).
The materials normally used are concrete, steel and concrete blocks.
The contractor, architect, developer and building control department (foundations, supporting walls, columns and floors) are individually liable within their own specialist fields of involvement and for a period of 10 years for all disturbances rendering the building unfit for use.
Hypothèque (Mortgage charge)
The guarantee given by the borrower to the lender, under which the latter may repossess a building it owns in the event of non-payment by the borrower. The implementation of this guarantee requires the lender to be certain that there is no existing mortgage on the building concerned in respect of one or more other lenders. If this were the case, then the guarantee would be worthless. This is why mortgage charges are registered with an official body that allocates a date certaine (registration date) to each mortgage charge.
Indice du prix de la construction INSEE (INSEE construction cost index)
This index is regularly used as the reference index for many types of contract (rental contract where the rent is set by the landlord, commercial leases, off-plan property sales, etc.).
This index is based on the actual costs involved in building new homes, excluding the cost of the land, legal fees, duties and taxes, the cost of developing the land itself and construction-related fees.
It is published quarterly and takes account of all construction costs, contractor profitability and profit margin.
Indivision (Joint-ownership)
Right of ownership held jointly by multiple owners. Under French law, management decisions must be unanimous. In the event of disagreement, a joint owner may request the dissolution of the joint-ownership arrangement and leave it amicably or, failing that, resort to law. Such joint-ownership arrangements usually result from an inheritance shared amongst several beneficiaries or a property purchase by an unmarried couple.
One possible alternative to joint-ownership is the société civile immobilière (SCI) (look up this word) in which decisions are made on the basis of a majority vote, pro-rata of the shares owned individually by its members.
L to Q
Loi CARREZ (CARREZ law)
According to the French Law of 18 December 1996 (the CARREZ law), the vendor must state the precise floor area of the property at the pre-contract stage.
The buyer may not contest an incomplete pre-contract as long as the floor area is stated in the notarial deed of sale.
It is not sufficient to state the floor area of the lot as sold; the figures shown must be actual measurements.
If the actual floor area is greater than that stated in the deed, the vendor may not raise the price retrospectively.
If the actual floor area is more than 5% less than that stated, the buyer may request a reduction in the price proportional to the missing area. The buyer has one year from signing the notarial deed in which to act.
Companies may make these measurements. These measurements are compulsory for apartments, but optional for houses.
Mise hors d’eau (Dry)
A building is declared mis hors d’eau when the shell is built (external walls complete), the roof is on and the terrace is complete.
Mise hors d'air (Closed)
When all the external joinery and glazing is in place, closing all external openings.
Mitoyenneté (Communal property)
Physical elements of the building spanning the point where 2 properties meet (wall, curb, tree, enclosure, hedge, etc.), belonging simultaneously to both and maintained at the shared cost of both owners.
Mutation (frais de) (Transfer of ownership costs)
All the costs related to conveyancing deeds, especially ownership transfer taxes, legal expenses and the payment of intermediaries.
Notaire
Deeds (contracts, agreements of sale, co-ownership rules, agreements and commitments) are normally drawn up by a notaire, who retains an authenticated original for a specified period of time.
Nue propriété (reversionary interest where the purchaser has no occupational rights over the property until the death or prior surrender of the life tenant)
Where an owner no longer has usufruit (look up this word) of his or her property (i.e. the right to use that property), he/she has only nue-propriété rights until such time as the property reverts fully on expiry of the arrangement. The nue-propriété owner may sell the property, although the occupant has pre-emption rights over the sale.
Offre de prêt (ou Offre Préalable de Crédit) (Loan offer or offer-in-principle)
Once your loan application has been approved by the lending institution, you will be sent a loan offer in the post. This offer is binding for at least 30 days from the date you receive it, and will contain the following compulsory information: the names of the parties (lender, borrower(s) and, where applicable, guarantor), the type of loan, the amount of the loan and the practical details of it (the date on which funds will be released, a detailed timetable of repayments, including dates and the total amount of each payment broken down to show capital and interest elements). You have at least 10 days from receipt in which to consider the offer and decide whether you want to accept it.
Passage (droit de) (Right of Way)
The owner of an enclosed piece of land automatically has a right of way over neighbouring property in order to take the shortest possible route to the nearest public thoroughfare. This right constitutes an easement over the adjoining property.
Where such an enclosed area of land must be built on, its owner has a right to obtain a corresponding right of way across the neighbouring land to serve the building. However, this enhanced right of way is subject to agreement. If the neighbouring parties cannot come to an amicable agreement over the amount to be paid, this wil be set by a court of law on the basis of expert opinion.
Pièces principales (Primary rooms)
These are the living and sleeping rooms: the lounge, living room, bedrooms and offices.
Pièces secondaires (ou de service) (Secondary or service rooms)
These include:
- Kitchens
- Bathrooms
- WC
- Laundries/cellars
- Storage rooms
- Corridors
- Outbuildings
- Linen rooms
Plan de masse (Block plan)
This plan shows the location of the planned building relative to its immediate neighbours, and shows the boundaries and orientation of the plot, the position and height of the building, the route of access roads/paths and mains connections.
Prêt cautionné (Guaranteed loan)
A “guaranteed” property loan significantly reduces the cost of guarantees by avoiding the cost of putting in place and releasing the mortgage charge. It requires the involvement of a specialist guarantor company.
Prêt capé (Capped loan)
Where a variable rate loan is capped, it means that any rate rise is limited to 1.5, 2 or even 3 percentage points above the starting rate. E.g.: where the starting rate is 4.8% and the cap is 2 percentage points, the rate may not rise above 6.8%.
Prêt 1% logement (1% Home Loan)
This is an additional loan that benefits borrowers who are full-time employees of, or retired from, a private company employing less than 10 people (excluding agricultural businesses).
Promesse de vente (Agreement to Sell)
Pre-contract signed by the vendor and the buyer. You are recommended to have such contracts drawn up by a legal professional. There are 2 types of promesses de vente:
• the unilateral promesse de vente, which commits the vendor (but not the buyer) for a fixed period clearly defined in the contract,
• the bilateral promesse de vente (also referred to as the promesse synallagmatique), or compromis de vente (provisional contract of sale).
The promesse de vente almost always includes conditions suspensives (provisional conditions).
The most common provisional conditions are:
- securing irreversible planning permission to build a total floor area (SHON) of x m²,
- obtaining irreversible consent to demolish,
- lack of objection from local authority,
- lack of soil pollution,
- absence of asbestos, lead and termites from existing buildings,
- absence of quarrying activities,
- etc.
Promoteur (Developer)
Property developers take the risk of buying building land, constructing a building or buildings on it (some developers are also builders) and marketing the resulting property. Developers are usually project owners and marketeers, which requires them to fulfil certain legal obligations, including that of supplying buyers with guarantees.
Propriété (Ownership)
It is possible to have possession of a property without owning it. The fundamental test of ownership is having the freedom to sell the property. When you are able to sell a property you possess, then you are the owner of that asset.
A person who uses a piece of land (even where he or she has exclusive use of it), but does not hold the right to sell it, is simply the usufruitier of that land (someone with a right to use it).
According to the French Law of 18 December 1996 (the CARREZ law), the vendor must state the precise floor area of the property at the pre-contract stage.
The buyer may not contest an incomplete pre-contract as long as the floor area is stated in the notarial deed of sale.
It is not sufficient to state the floor area of the lot as sold; the figures shown must be actual measurements.
If the actual floor area is greater than that stated in the deed, the vendor may not raise the price retrospectively.
If the actual floor area is more than 5% less than that stated, the buyer may request a reduction in the price proportional to the missing area. The buyer has one year from signing the notarial deed in which to act.
Companies may make these measurements. These measurements are compulsory for apartments, but optional for houses.
Mise hors d’eau (Dry)
A building is declared mis hors d’eau when the shell is built (external walls complete), the roof is on and the terrace is complete.
Mise hors d'air (Closed)
When all the external joinery and glazing is in place, closing all external openings.
Mitoyenneté (Communal property)
Physical elements of the building spanning the point where 2 properties meet (wall, curb, tree, enclosure, hedge, etc.), belonging simultaneously to both and maintained at the shared cost of both owners.
Mutation (frais de) (Transfer of ownership costs)
All the costs related to conveyancing deeds, especially ownership transfer taxes, legal expenses and the payment of intermediaries.
Notaire
Deeds (contracts, agreements of sale, co-ownership rules, agreements and commitments) are normally drawn up by a notaire, who retains an authenticated original for a specified period of time.
Nue propriété (reversionary interest where the purchaser has no occupational rights over the property until the death or prior surrender of the life tenant)
Where an owner no longer has usufruit (look up this word) of his or her property (i.e. the right to use that property), he/she has only nue-propriété rights until such time as the property reverts fully on expiry of the arrangement. The nue-propriété owner may sell the property, although the occupant has pre-emption rights over the sale.
Offre de prêt (ou Offre Préalable de Crédit) (Loan offer or offer-in-principle)
Once your loan application has been approved by the lending institution, you will be sent a loan offer in the post. This offer is binding for at least 30 days from the date you receive it, and will contain the following compulsory information: the names of the parties (lender, borrower(s) and, where applicable, guarantor), the type of loan, the amount of the loan and the practical details of it (the date on which funds will be released, a detailed timetable of repayments, including dates and the total amount of each payment broken down to show capital and interest elements). You have at least 10 days from receipt in which to consider the offer and decide whether you want to accept it.
Passage (droit de) (Right of Way)
The owner of an enclosed piece of land automatically has a right of way over neighbouring property in order to take the shortest possible route to the nearest public thoroughfare. This right constitutes an easement over the adjoining property.
Where such an enclosed area of land must be built on, its owner has a right to obtain a corresponding right of way across the neighbouring land to serve the building. However, this enhanced right of way is subject to agreement. If the neighbouring parties cannot come to an amicable agreement over the amount to be paid, this wil be set by a court of law on the basis of expert opinion.
Pièces principales (Primary rooms)
These are the living and sleeping rooms: the lounge, living room, bedrooms and offices.
Pièces secondaires (ou de service) (Secondary or service rooms)
These include:
- Kitchens
- Bathrooms
- WC
- Laundries/cellars
- Storage rooms
- Corridors
- Outbuildings
- Linen rooms
Plan de masse (Block plan)
This plan shows the location of the planned building relative to its immediate neighbours, and shows the boundaries and orientation of the plot, the position and height of the building, the route of access roads/paths and mains connections.
Prêt cautionné (Guaranteed loan)
A “guaranteed” property loan significantly reduces the cost of guarantees by avoiding the cost of putting in place and releasing the mortgage charge. It requires the involvement of a specialist guarantor company.
Prêt capé (Capped loan)
Where a variable rate loan is capped, it means that any rate rise is limited to 1.5, 2 or even 3 percentage points above the starting rate. E.g.: where the starting rate is 4.8% and the cap is 2 percentage points, the rate may not rise above 6.8%.
Prêt 1% logement (1% Home Loan)
This is an additional loan that benefits borrowers who are full-time employees of, or retired from, a private company employing less than 10 people (excluding agricultural businesses).
Promesse de vente (Agreement to Sell)
Pre-contract signed by the vendor and the buyer. You are recommended to have such contracts drawn up by a legal professional. There are 2 types of promesses de vente:
• the unilateral promesse de vente, which commits the vendor (but not the buyer) for a fixed period clearly defined in the contract,
• the bilateral promesse de vente (also referred to as the promesse synallagmatique), or compromis de vente (provisional contract of sale).
The promesse de vente almost always includes conditions suspensives (provisional conditions).
The most common provisional conditions are:
- securing irreversible planning permission to build a total floor area (SHON) of x m²,
- obtaining irreversible consent to demolish,
- lack of objection from local authority,
- lack of soil pollution,
- absence of asbestos, lead and termites from existing buildings,
- absence of quarrying activities,
- etc.
Promoteur (Developer)
Property developers take the risk of buying building land, constructing a building or buildings on it (some developers are also builders) and marketing the resulting property. Developers are usually project owners and marketeers, which requires them to fulfil certain legal obligations, including that of supplying buyers with guarantees.
Propriété (Ownership)
It is possible to have possession of a property without owning it. The fundamental test of ownership is having the freedom to sell the property. When you are able to sell a property you possess, then you are the owner of that asset.
A person who uses a piece of land (even where he or she has exclusive use of it), but does not hold the right to sell it, is simply the usufruitier of that land (someone with a right to use it).
R to Z
Réception des travaux (Acceptance of building works)
This formal document formalises acceptance of the building (or building works) by the project owner from the builder, either conditionally or unconditionally.
This document is signed at the request of the project owner or builder.
It may contain a provisional phase called the pré-négociation phase.
If acceptance is not agreed amicably, it may be awarded in a court of law.
It marks the starting point for many guarantee periods.
Société civile immobilière (SCI)
This is a kind of property-owning company, for example: the société civile familiale de placements immobiliers (formed to buy property to be owned jointly by a family group) or the société civile de construction vente (formed for the building construction period). The sale of an SCI of the disposal of SCI shares is taxed differently from ordinary property sales.
The grouping together of private individuals or companies to pool capital or property assets in order to complete a property transaction or manage property jointly. Unlike a commercial company, every member of an SCI is responsible for his/her own assets pro-rata of the amount of shares held.
Taux Effectif Global (TEG) (Annual Percentage Rate or APR)
This method of quantifying the cost of a loan includes interest, arrangement fees, insurance premiums and all the direct and indirect costs involved in the transaction.
Taux fixe (Fixed rate)
Loan interest rate that is fixed for the full period of the loan.
Taux révisable (ou taux variable ou ajustable) (Variable rate)
Loan interest rate that may rise or fall during the period of the loan in line with movements in the Tibeur rate (the French term for the Euro Interbank Offered Rate, or EURIBOR).
Tiers (Third parties)
This term refers to all those individuals with no direct involvement in the signing of a contract, either in person or represented.
As opposed to the “parties” to the contract.
Usage (droit d') (Right of usage)
The right to use a piece of land free of charge, but without the right to sell it or change its use. The Frenc Civil Code provides for a prêt à usage (free usage loan or commodatum).
Usufruit (Right to use property)
The right to use a building or enjoy the benefit of its rental, without the right to damage it, sell it or bequeath it to beneficiaries. A surviving spouse may therefore retain the right to use that portion of a property inherited by the heirs of the deceased partner. It is the person holding this right (the usufruitier) that pays the property taxes, since he or she receives the revenue.
Vente en état futur d'achèvement (V.E.F.A.) (Property sold “off-plan” for future completion)
Off-plan sales, or vente en état futur d'achèvement to use the correct French legal term, allow the developer (or developer/contractor) to reduce borrowing costs (and therefore development costs) by selling plots or homes as quickly as possible prior to completion. The contract of sale then provides for staged payments to be made as work progresses.
Vente en viager (similar to an equity release scheme, without necessarily involving an insurance company)
Sale of a property in return for payment in the form of rente viagère (annuity) (usually for the remainder of the vendor’s life). The vendor in such a sale is referred to as the crédit-rentier, whilst the buyer is the débirentier. The vendor receives the annuity payment, whilst retaining the right to occupy the property until their death. The purchase price may also be paid in the form of a bouquet (lump sum) and annuity (in accordance with article 1968 and subsequent of the French Civil Code).
This formal document formalises acceptance of the building (or building works) by the project owner from the builder, either conditionally or unconditionally.
This document is signed at the request of the project owner or builder.
It may contain a provisional phase called the pré-négociation phase.
If acceptance is not agreed amicably, it may be awarded in a court of law.
It marks the starting point for many guarantee periods.
Société civile immobilière (SCI)
This is a kind of property-owning company, for example: the société civile familiale de placements immobiliers (formed to buy property to be owned jointly by a family group) or the société civile de construction vente (formed for the building construction period). The sale of an SCI of the disposal of SCI shares is taxed differently from ordinary property sales.
The grouping together of private individuals or companies to pool capital or property assets in order to complete a property transaction or manage property jointly. Unlike a commercial company, every member of an SCI is responsible for his/her own assets pro-rata of the amount of shares held.
Taux Effectif Global (TEG) (Annual Percentage Rate or APR)
This method of quantifying the cost of a loan includes interest, arrangement fees, insurance premiums and all the direct and indirect costs involved in the transaction.
Taux fixe (Fixed rate)
Loan interest rate that is fixed for the full period of the loan.
Taux révisable (ou taux variable ou ajustable) (Variable rate)
Loan interest rate that may rise or fall during the period of the loan in line with movements in the Tibeur rate (the French term for the Euro Interbank Offered Rate, or EURIBOR).
Tiers (Third parties)
This term refers to all those individuals with no direct involvement in the signing of a contract, either in person or represented.
As opposed to the “parties” to the contract.
Usage (droit d') (Right of usage)
The right to use a piece of land free of charge, but without the right to sell it or change its use. The Frenc Civil Code provides for a prêt à usage (free usage loan or commodatum).
Usufruit (Right to use property)
The right to use a building or enjoy the benefit of its rental, without the right to damage it, sell it or bequeath it to beneficiaries. A surviving spouse may therefore retain the right to use that portion of a property inherited by the heirs of the deceased partner. It is the person holding this right (the usufruitier) that pays the property taxes, since he or she receives the revenue.
Vente en état futur d'achèvement (V.E.F.A.) (Property sold “off-plan” for future completion)
Off-plan sales, or vente en état futur d'achèvement to use the correct French legal term, allow the developer (or developer/contractor) to reduce borrowing costs (and therefore development costs) by selling plots or homes as quickly as possible prior to completion. The contract of sale then provides for staged payments to be made as work progresses.
Vente en viager (similar to an equity release scheme, without necessarily involving an insurance company)
Sale of a property in return for payment in the form of rente viagère (annuity) (usually for the remainder of the vendor’s life). The vendor in such a sale is referred to as the crédit-rentier, whilst the buyer is the débirentier. The vendor receives the annuity payment, whilst retaining the right to occupy the property until their death. The purchase price may also be paid in the form of a bouquet (lump sum) and annuity (in accordance with article 1968 and subsequent of the French Civil Code).