We had some friends over for supper the other evening who brought along an old friend who was helping them finish off their newly built house. The friend has recently sold a house in Brittany...the sale in itself was unusual...the buyer from Paris, a retired banker...didnt want to see the property...he offered full price and the sale went through quickly and without problems. However, at the 11th hour, he was presented with a bill for an insurance policy...to cover costs in case he didnt settle any of the bills of sale in full, or if any bills for electricity, water etc were left outstanding. The agent said its to make sure that if anyone sold then skipped back to the UK or wherever they come from, no one else is left out of pocket. The cost is apparently the same for all houses, and was pretty hefty I think....Ive never heard of this before...can anyone enlighten me please?
sounds like the buyer is just passing on the cost of insurance he has taken out, afterall it's him who is taking the risk
Thank you so much for the info and advice Hilary. Luckily we have an apartment in the Languedoc, that we rent out part of the time. When we sell up here...we will stop renting it out and make that our main residence. At some stage we will sell that...and no doubt will have to accept a representant legal. Many thanks for your help with this.
You can use a tax paying friend as a guarantor ...
Just a word of warning of what happened to a colleague of mine. She had a business and home here in France and returned to the UK. The home was put up for sale long before she left France and sold a few months after she had definitively left and closed down her business. Her last tax declaration was a French one but the notaire considered her non-resident and, although she was selling at a loss so CGT (plus-value) didn't apply, tried to force her to have a représentant légal as the sale was over 150,000 €. She had to fight tooth and nail not to have one. She avoided having to pay the SARF, but only because she stood her ground and having just fought a long battle with the RSI, she was hardened to French bureaucracy and up for a fight!
I now advise any customers wanting to sell and return to the UK not to inform the notaire they are returning to the UK and to give a French address for correspondence if at all possible. It's not lying, it's being economical with the truth. Apparently there's a difference ;)
Thank you Wendy...you have found the answer....it was a second home... Its just something I had never heard of before....from the answers on this thread...seems most others were not aware of it either. It wont affect us as its not a second home...
ah..thankyou Hilary and James...I think this is the most likely explanation. If said chap was still down the hill I would have asked more..but he is now back in the UK. But it was a holiday home...and he was domiciled in the UK. That wont apply to us. Many thanks...all is now clear.
Are you sure that it was not the charges of the représentant légal, which is a percentage of the sale price for non-residents on the sale of a property over 150,000 €. This is, indeed, used against any possible outstanding liabilities. The body in question also has the right to retain some of the sale price until satisfied that there is nothing outstanding.
I have to say, though, that if this is the case, the vendors should have been advised beforehand and would have had to sign a document authorising it.
Wendy Boyrie is on the right track. Although this isn't strictly an insurance policy it is a payment to a "Representant Fiscal" to guarantee that any error in the calculation of the capital gains tax (CGT or plus value) will be paid to the Government even if the vendor is no longer in France. It is applicable on transactions over 150.000€ whereby the vendor is not a French tax resident. It was remiss of the Notaire to not have flagged this up right at the beginning as it is standard practice to employ the services of a Representant Fiscal (alternatively the vendor can appoint a French tax resident to take the responsibility however this rarely happens in practice). There are a large number of firms offering these services, one that we have used in the past (with an English website) is the SARF: http://www.sarf.fr/qui-sommes-nous_EN.php
I am an estate agent in the Languedoc Roussillon where we have many foreign vendors hence we come across this situation regularly: www.real-estates.fr
Hope this helps.
If the agent has explained this insurance correctly, that it's for unpaid bills etc, I've never heard of that either.
However.. owners of houses less than ten years old are, I believe, supposed to take out an insurance covering the property for defects for the first two years, on top of the ten year guarantee supplied by the builder. I was translating for the purchaser of a building site recently and the notaire told him that such insurance was necessary. When questioned the notaire said that my client didn't HAVE to take out the insurance now, since he has no intention of selling the property within ten years. But I think he said that the client would have to if he decided, after all, to sell.
So... could it in fact be insurance for building defects and nothing to do with unpaid bills etc, IF the house in question was under ten years old? If not then I agree it sounds like a scam..
Agreed! And more-over the fee the estate agent gets should cover all the costs involved for him, including insurances (although this one sounds iffy, the only additional insurance I heard of is the one for unpaid rents in case you rent out your property, but that's not the case here). If the next owner wants an insurance it's up to him to pay for it.
But I'd be curious as to the title of the insurance and indeed the amount / percentage
I've worked immo since '07 in paca region, and have not heard this one!
It hasn't changed. My friend works for a notaire and this still applies. Most don't like to do it though because they have to split the fees. It rather depends on the buyers relationship with the notaire as some have used the same one for years.
...what does "pretty hefty" mean, ie what was the sale price and what was the insurance
Unless things have changed over the last 12 months, it's unnecessary. The vendor of my house was already back in the UK so technically the insurance would be to protect me in case she skipped out? Couldn't happen - the money for the purchase was held by the notaire who wouldn't release any of it to her until all the bills were settled.
Sounds like a con indeed. Nobody can be forced to subscribe an insurance !
What did the Notaire say about that ? BTW, also be wary of Notaires ! ;)
There can be 2 Notaires in a sale, yours and the other party's. Same price as haveing just one and it 's better tghat way as they can check each other's work.
That is, if it hasn't changed in the last 10 years.
shouldn't they have discussed it with your friend rather than just present a bill??? I find this most unprofessional on the notaires part and I think they should ask why they weren't advised of it.
We have been in Immo here since 1999 and we feel that this must be a scam...we have never heard of such a case, and before committing to anything, have a word with a friendly and experienced Notaire.
You say "at the 11th hour, he was presented with a bill for an insurance policy..;"
Who gave him this bill? The agent? Then it's a scam. The notaire? Then it's probably serious and above board.
I am a French agent immobilier.