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Authentic deed
Final contract by which the purchaser officially becomes the owner. This contract must be drawn up before a notary, either the buyer's notary or the seller's notary, or both. There are no additional costs if both notaries are present. The sale of the property must be recorded in a notarial deed.
Private deed
A deed signed by the parties without the involvement of a notary. In the case of a sale, this may be a preparatory deed for the conclusion of a deal.
Property administrator
A professional who carries out property management operations under a mandate. This mandate specifies the exact nature of the property manager's mission (conclusion of rental leases, collection of rents and charges, maintenance, repairs, improvements, operation, etc.) as well as the terms of his remuneration.
Estate agency
It is a merchant whose role is to offer services, resources and advice in property matters: transactions, rentals, valuations, etc.
Real Estate Agent
A professional who acts as the owner's agent in the sale or rental of flats, buildings, detached houses, businesses or land. He acts as an intermediary and provides a service that consists of looking for a tenant or a buyer, providing them with financial and legal guarantees in accordance with the provisions of the law of 2 January 1970. Transactions between private individuals do not benefit from these guarantees.
Asbestos
In accordance with decree no. 96-97 of 7 February 96, amended by decree no. 97-855 on "protecting the population against the health risks associated with exposure to asbestos in built-up buildings", the vendor is obliged to provide a diagnosis for the private areas.
Calls for funds
In the case of co-ownership, calls for funds represent the sums requested from co-owners to pay service charges or carry out works. Please note: for the syndic to be able to call in the funds from the co-owners, the provisional budget must have been approved at the general meeting (see definition below!).
Personal contribution
A few weeks ago, we talked to you about home loans with no down payment. A deposit is the amount of money that a future buyer can bring to the purchase of their property, to top up their loan with a financial institution. These savings must actually be available.
Joint owners' meeting
A meeting attended by all members of a condominium. It must be held at least once a year. The meeting may only deliberate on matters included on the agenda. Notice of the meeting must be given at least 15 days before the date of the meeting.
Professional Liability Insurance
Compulsory professional insurance covering estate agents, property managers, etc. in the course of their professional activities against the consequences of their errors causing damage to third parties.
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Residential lease
A fixed-term rental contract under which the lessor undertakes to make premises available to the lessee for residential or mixed (business and residential) use. Some leases are subject to specific regulations that define the contractual relationship between landlords and tenants. Most residential leases for the principal residence are governed by the laws of 23 December 1986 and 6 July 1989, and commit the landlord for 3 or 6 years, with the tenant being able to terminate at any time by giving 3 months' notice.
Lessor
The landlord is the owner of the property made available to the tenant in return for rent. The lessor may be an individual or a legal entity.
Property
Immovable, i.e. building, land, etc. Originally, all objects attached to land, i.e. immovable (including trees and crops) and the land itself, and by extension, movable property when attached to the immovable (fireplace, sink, shutters, etc.).
Planning permission must be obtained for built properties.
Visit form
Document by which a buyer acknowledges having visited a property through an estate agent.
Property bubble
To put it simply, a property bubble is a speculative bubble characterised by a very rapid rise in the value of properties on the market.
For Nobel Prize winner Joseph Stiglitz, a property bubble is "a state of the [property] market in which the only reason the price is high today is that investors think the selling price will be even higher tomorrow, when the fundamental factors do not seem to justify such a price".
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Land registry
The land register is a public register that lists and defines the boundaries of plots of land (and their owners) in each commune. Thanks to this register (which can be consulted at the town hall or online), you can find out the correct boundary of a plot of property, for example (although you will need to call in a surveyor to be sure of the boundaries of your plot), find out the owner of a plot of land you are interested in or obtain tax information (for example, the rental value of a property, which is used as the basis for calculating local taxes).
CARREZ (law)
In accordance with the provisions of the law of 18 December 1996 and the decree of 23 May 1997, improving the protection of purchasers of co-ownership premises, the vendor must measure the premises that are the subject of this agreement. This message must be sent in accordance with the provisions of decree no. 97-532 of 23 May 1997.
Deposit
A deposit is a commitment often required when renting: in writing, a person undertakes to pay the rent to the landlord in the event of non-payment by the tenant.
Professional card
Anyone involved in property transactions or management must hold a professional licence issued by the Prefect and renewed every year. An estate agent who does not hold a professional licence may not carry on business.
Planning certificate
This is a document that provides information on the planning provisions that apply to a land unit, any pre-emption rights that may be exercised over the land and the list of applicable planning taxes and contributions (article L410-1 a of the French Planning Code). You are under no obligation to obtain it, but it is strongly recommended that you pay close attention to it when, for example, you wish to buy a flat, house or plot of land. Depending on the local authority, it takes between 3 and 10 weeks to obtain the certificate. However, you should be aware that some town halls no longer issue them!
Co-ownership charges
These charges are expenses incurred by the co-owners; they are due to the existence of common areas, equipment and collective services. The amount of these charges for a co-owner depends on his share of the common areas.
Rental charges
In the case of a rental property, the tenant is responsible for the rental charges, which are said to be "recoverable" because the landlord pays them but asks the tenant to reimburse them. In general, these include the upkeep of communal areas, rental taxes (e.g. rubbish collection) and water and heating costs. The list of these charges depends on the type of lease (furnished/unfurnished); you can refer to decree no. 87-713 of 26 August 1987 to consult this list.
Agency commission
In the context of a sale or lease, commission is the remuneration paid to the estate agent as an intermediary. This amount is due when the deed of sale or lease is signed. Please note: the amount of commission must be specified in the estate agent's mandate and in the preliminary sales agreement or rental contract!
Sales agreement
Pre-contract signed by the vendor and the purchaser of a property. The compromis is binding on both parties, and it is customary for the buyer to pay a deposit (usually 10% of the sale price) when the deed is drawn up.
Conditions precedent
Clauses in any preliminary contract that suspend performance of the contract until an event occurs. For example, a condition precedent to obtaining a loan or planning permission, etc. To be valid, a condition precedent must not depend on chance or the sole will of one party.
Co-owner
Owner of a property in a building with co-ownership status.
Co-ownership
Legal system governing any built property or group of built properties (apartment blocks or groups of detached houses) whose ownership is divided between several people, in lots, each comprising a private area and common areas. The co-ownership regulations govern and set out the rules for living together.
Real estate broker
A property broker acts as an intermediary between a financial institution and a future buyer looking for a mortgage to finance their project. The broker approaches several lending institutions and negotiates the best loan rates. Like estate agents, brokers are governed by the Hoguet law.
Property crowdfunding
"Crowdfunding" means "participative financing", applied to real estate! On an online platform, the owner of a property project (a property developer, for example) proposes his or her financing needs; investors can then participate in financing the project by lending a certain amount of money. Once the property project is completed, the capital borrowed is paid back to the investors, along with a profit.
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Property dismemberment
Ownership of a property has three components: the right to use the property, the right to receive the benefits (rent or interest) and the right to sell, give away or destroy it. When these three elements are separated and assigned to different people, this is known as dismemberment of ownership. The holder of the usufruct right has the right to use the property and reap the benefits; the holder of the bare ownership right has the right to sell or donate the property. This dismemberment often occurs as part of a gift or inheritance.
Security deposit
A sum of money given as security for the performance of a contract of sale or lease.
Property diagnostics
Property surveys are a set of documents that the seller or landlord must provide to the buyer or tenant. The purpose of these documents is to inform the future occupant of the property about its characteristics: lead exposure risk report, state of gas and electricity installations, energy performance, state of natural, mining and technological risks, etc. The composition of the technical diagnostics file varies according to the type of contract (sale or rental), the date of construction of the property and its geographical location.
Right of pre-emption
When buying a property, the notary often asks both parties to be patient, as there may be a right of pre-emption. This right allows local authorities or the State to acquire the property in priority to the buyer; they have this right of pre-emption within certain geographical areas.
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Current situation
An inventory of fixtures is a compulsory document describing the condition of a rented property. It is drawn up in the presence of the tenant and the landlord or the estate agent representing the landlord. It is drawn up when the tenant moves in and out of the property, and is extremely important for the proper return of the security deposit.
Pest status
A pest report less than 3 months old is required for a contract of sale in areas designated as at risk by the Prefects.
Property expert
A professional whose job is to estimate the market or rental value of property.
Expulsion
This is a procedure aimed at "forcing" a person (or several people) to leave accommodation that they had no right to occupy (end of lease, non-payment of rent, etc.). A bailiff is responsible for carrying out the eviction, as decided by a judge. There is, however, what is known as the "winter truce" (from 1 November to 31 March), which is a period during which no eviction is authorised, unless the judge decides otherwise or there is a possibility of rehousing.
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Notary fees
Contrary to what you might think, notaire's fees do not just pay the notaire who carries out the sale! Notaire's fees, which are payable by the buyer when the deed of sale is signed, are in fact made up of 3 elements: taxes and duties payable to the State and local authorities (transfer duties), the notaire's disbursements (costs paid by the notaire on behalf of his client) and the notaire's own remuneration.
Known as "notaire's fees", these are made up partly of taxes, duties and fees for obtaining administrative documents, collected by the notaire on behalf of the State and local authorities, and partly of the notaire's fees. To find out the purchase costs for a property, it is advisable to consult a professional.
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Financial guarantee
Under the Hoguet Act, holders of a professional licence are required to provide evidence of a financial guarantee to cover the sums involved in property transactions or in acts relating to property management. The financial guarantee is compulsory for all estate agents and property managers.
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Fees
Term used to describe the remuneration paid to an estate agent for carrying out their activity (sale, letting, management). In order to receive commission, the estate agent must have a mandate. Remuneration (commission and fees) is unrestricted and must appear in all current transactions.
Mortgage
Right granted to financial institutions over the property for which a loan has been taken out. It is a guarantee that allows the lender to become the owner of the mortgaged property and to have it sold by court order if the borrower does not honour his commitments.
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Immobilisation indemnity
A sum paid by the buyer when signing the preliminary sales agreement as a deposit on the sale price. The amount is freely negotiated, but is usually set at 10% of the sale price of the property. This sum will be paid directly to an estate agent if the agent is authorised to collect funds. If the buyer decides not to complete the deal, the earnest money (deposit) remains with the seller, unless one of the conditions precedent stipulated in the contract is not met.
Tax on property income
When you rent out your property, the income you generate from it will be taxed, after deducting various property-related charges, such as property and ancillary taxes, loan interest, maintenance work, etc.
Local taxes
Local taxes are levied by local authorities. The main local taxes are taxe d'habitation (council tax), taxe foncière (property tax) (for homeowners only) and Contribution Economique Territorial (business tax). Additional taxes may also be levied, such as household waste collection tax. The cadastral value of the property, the classification of the property in terms of comfort, its location... A number of criteria come into play when calculating these taxes.
Undivided
Property owned by several people without any material division of their shares. It may result either from the joint purchase of a property, or from an inheritance where the division of shares has not yet been established between heirs, or from the dissolution of a company which generates indivision between former partners.
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Rental
Premises made available to an occupier in return for rent. The lessor and lessee are bound by a lease that sets out all their respective rights and obligations. The most common type of residential tenancy is bare tenancy, but it can also include the provision of furniture (furnished tenancy) or be short-term (seasonal tenancy).
Carrez law
In accordance with the provisions of the law of 18 December 1996 and the decree of 23 May 1997, improving the protection of purchasers of co-ownership premises, the vendor must measure the premises that are the subject of this agreement. This must be done in accordance with the provisions of decree no. 97-532 of 23 May 1997. Cellars, garages and parking spaces are excluded from this measurement.
Rent
Monthly or quarterly sum paid to the landlord by the tenant. The amount is stipulated in the lease agreement. The sum of the rents received by a landlord constitutes the landlord's income.
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Mandate
An act by which a person (the principal) gives another person (the agent) the power to carry out one or more legal acts on his behalf (a sale, a rental, a purchase, etc.). The Hoguet Act requires professionals to have a written mandate to offer properties for sale or rental.
Merchant of goods
A trader whose business consists of buying property on his own account and then selling it with the intention of making a profit.
List seller
Person who collects listings from sellers or lessors and sells these listings to prospective buyers or tenants.
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Notary
A ministerial officer appointed and supervised by the Ministry of Justice, whose primary function is to draw up authentic instruments relating to family, company or property law. As such, they have a monopoly on drawing up civil deeds such as property transactions.
Bare ownership
This is the real right to own a property, as opposed to the usufructuary, who has the right to use and enjoy it.
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Individual
In contrast to an estate agent, a property owner may sell or let the property he or she owns himself or herself. Of course, in this case, there is no financial, legal or advisory guarantee for the management, the funds involved, the drafting of deeds or the proper execution of contracts. What's more, the resources available to an estate agent to carry out a transaction are far greater than those available to a private individual.
Planning permission
Planning permission is a compulsory document that certifies that a construction project (new build or work on an existing building) complies with the planning regulations in force.
Capital gains
Capital gains are the positive difference between the purchase value and the resale value of a property. The seller of a property will therefore make a capital gain if he sells it for more than he bought it for. This capital gain is taxed at 34.5% (sale of a second home owned for less than 30 years). In the case of a capital gain realised on the sale of a principal residence, the latter is completely tax-exempt.
Promise to sell
Preliminary contract signed by the vendor and the purchaser of a property. Only a professional can draw it up in a way that does not cause concern for either party. In practice, there are two types of promise to sell:
- The unilateral undertaking to sell, which does not commit the buyer, while the seller undertakes to reserve the sale of the property for the buyer for a limited period clearly specified in the contract.
- The bilateral promise to sell (synallagmatic contract), which commits the buyer in the same way as the seller. This commitment becomes firm when the two parties give their mutual consent to the "thing" and the "price".
Property developer
A property developer is a real estate construction professional. Whether they are natural persons or legal entities, their role is to find land, construct buildings and occupy them in order to finance the construction. They may also entrust the sale of their buildings to estate agents.
Owner
A natural or legal person who has received or acquired possession of a property. In France, the owner has full ownership of a property, including the land, subsoil and airspace required to erect the building, in accordance with the town planning regulations specific to each building zone. Waterways and the sea cannot be private property. Riverbanks and beaches are the property of the local authority.
Land registration
Land registration is a set of administrative formalities designed to provide information about property transactions (sales, gifts, leases, dismemberments of ownership, etc.). Anyone who so requests can have access to these documents; the Service de la publicité foncière is responsible for this.
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Rent receipt
When renting, the rent receipt is sent to the tenant as proof that the landlord has received payment of the rent and service charges due. The tenant can find details of the sums paid on the receipt.
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Co-ownership regulations
This is a document that sets out the rules governing the operation of a co-ownership, and the rights and obligations of co-owners. It specifies the common areas and private areas and defines the conditions under which they must be respected by both co-owners and tenants.
Profitability
The profitability of a rental investment measures its performance (the annual rent paid to you by your tenant compared with the purchase price of the property). This is also known as the "rental yield". Gross profitability is therefore expressed as a rate calculated as follows:
[ Annual rent / Purchase price ] x 100
Property income
Property income is income generated by the rental of a property, for example. It is subject to property income tax (see definition above).
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Easements
An easement is a constraint imposed on a property. Its effect is either to limit or prohibit the owner's rights over the property (building or land) or to impose works. There are several categories of easement.
Property investment company (SCPI)
An SCPI is a company whose purpose is to acquire and manage rental property with a view to generating a return.
Non-trading property company (SCI)
An SCI is a company in which several people (the partners) pool one or more properties in order to share the profits and/or enjoyment. An SCI is therefore a legal entity made up of several individuals.
Living area
The habitable surface area is the sum of the floor areas of each room in a dwelling, minus the areas occupied by walls, partitions, stair treads and window and door openings. In addition, you need to subtract living areas with a height of less than 1.80 metres.
Co-ownership trustee
Natural or legal person entrusted with carrying out the decisions of the syndicate of co-owners. The general meeting of co-owners appoints the syndic by an absolute majority. The syndic is generally a professional who takes out insurance policies, hires the building's staff, carries out the decisions of the general meeting of co-owners, ensures that the co-ownership regulations are complied with and enforced, initiates legal proceedings, and generally oversees the day-to-day management of the building.
Syndicate of co-owners
The group of co-owners of a building responsible for administering the common areas, ensuring the conservation of the building and defending the common interests. Decisions are taken by the general meeting of co-owners. When you buy a co-owned flat, you automatically become a member of the syndicat des copropriétaires.
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Annual Percentage Rate (APR)
The APR is the interest rate set by the bank, taking into account all the costs of a loan: nominal interest rate, administration costs, cost of insurance, etc. This rate is therefore expressed as an annual percentage of the total amount of the loan.
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Usufruct
Right resulting from the dismemberment of ownership, which separates bare ownership from usufruct. Bare ownership is the real right of ownership, while usufruct is the right to enjoy the property. This right is temporary and ends with the death of the usufructuary.
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Market value
Market value of a property. It is obtained by reference to previous values or by comparison with selling prices on the property market at a given time and under the free conditions of the law of supply and demand.
Sale before completion (VEFA)
VEFA is the sale of a building to be constructed: the property has not yet been built, but the buyer is the immediate owner of the land on which it will be built. The buyer becomes the owner of the property as the building work progresses, and therefore pays the sale price in instalments, depending on the state of construction of the property. The developer (the seller) undertakes to build the property within an agreed timeframe.
Property for sale
It must always be notarised and signify the transfer of ownership. In practice, it is always preceded by a preliminary contract (promesse unilatérale or compromis), usually drawn up by a professional.
Life annuity
A contract for the sale of a property under which the buyer (called the "débirentier") pays the owner (called the "crédirentier") an annuity (called arrérage) for the lifetime of the latter. In addition to this life annuity, the debirentier also pays an initial down payment, known as the bouquet, which is much lower than the actual price of the property. This initial payment is not compulsory. The amount of the annuity and the bouquet depends on a number of factors: the market value of the property, the life expectancy of the annuitant, and the assumed rate of return on the capital invested. It is strongly recommended that you use the services of a professional for a life annuity sale.
