The notaires’ tariff - A storm is coming?

It is this time of the year where scorching days can turn into violent downpours filled with lightning, rumbles and warm winds. Something of the sort may be coming from the Council of Europe.


Flashback


On 24th May 2011, the Court of Justice of the European Union (ECJ) ruled that the status of the notaire in France is inconsistent with the rules of free competition set by European law.


In ruling that the nationality requirement imposed by France to become a notaire was irregular, the ECJ confirmed that the function performed by the notaire falls within the scope of free movement of persons, services and capital and in particular free right of establishment as defined in Article 49 EC (then Article 43 EC).


France was supporting the view that Article 51 EC (then Article 45 EC) allowed notaires to be excluded from the application of Article 49 EC since the latter article does not apply “to activities which in that State are connected, even occasionally, with the exercise of official authority”.


But ECJ stated that “the activities of a notary, as they are defined currently in the French legal system, are not connected with the exercise of official authority within the meaning of the first paragraph of Article 45 EC.


It must consequently be declared that the nationality requirement imposed by the French legislation as a requirement for access to the profession of notary constitutes discrimination on grounds of nationality prohibited by Article 43 EC”.


The Court was careful to note that beyond the mere question of nationality it is the whole of the current status of notaires in France which is inconsistent with the provisions of Article 43 EC.
As a result of the judgment of 24th May 2011 it belonged to France to make the necessary changes to the status of notaires in accordance with principles of European competition law.


Since then, not much has actually happened as French notaires benefited from the unconditional support of the French government to delay the inevitable reform of its status.


Indeed, in the aftermath of the judgment of the ECJ, a written statement was issued by la Chancellerie mentioning that “the removal of the condition of nationality will not alter the status of notaires”.


However, on 30th May 2012, the European Commission took once again the initiative to push this change forward, and this time, the French Ministry of Justice (la Chancellerie) could well decide to follow this lead and modify the status of 9000 notaires.



(Lord) Flashheart


One of the characteristic elements of the notaires’ status is their legal tariff. As a result, the registration of the same deed by a notaire in Lille, Bordeaux or Marseille should roughly cost the same. Beyond the fact that notaires’ fees are sometimes not complying with their legal tariff (which has been increased in March last year) such measure impedes the rules of free competition set by European law.


After a year waiting in vain for France to automatically recognise the legal need of a reform of the status of notaires, the European Commission, on 30th May 2012, sent a recommendation to the Council of Europe.


Point 15 of this recommendation explicitly considers that “while a number of reforms have been adopted to simplify the business environment and to remove restrictions on some regulated trades and professions, they fall short of addressing barriers to entry and restrictive conduct conditions in many others (e.g. veterinarians, taxis, health sector, legal professions including notaries)”.


This time, it is no longer possible to argue that the decision of the ECJ on 24th May 2011 was confined to the question of the nationality clause.



Flash flood?


It seems that now, things could move quickly. Indeed, there are rumours that under the impetus of the new Minister of Justice, la Chancellerie is considering as a priority to remove the notaires’ tariff.


The end of this tariff would obviously be a major reform of the status of notaires. In the first instance, the cost of transactions would be significantly reduced for clients but the removal of the tariff, by a “domino effect”, would result in opening a window to challenge the other aspects of this status inherited from bygone age.


Indeed, since the tariff is, according to French notaires, the necessary consequence of their monopoly (in particular for the transfer of ownership of property), the removal of the former must, logically, trigger the disappearance of the latter.



Flashlights


Please find below some practical advice and pointers regarding notaire’s “fees”:


1. It is always preferable to ask different notaires for a quote detailing each costs, taxes and fees before any confirmation to carry out the work. In case of doubt, it is always possible to seek independent advice and have the quote checked by a specialist.


2. If once a deed is signed with the notaire, additional fees and costs are due, the notaire should not request them and should bear the discrepancy. In effect, the notaire should always make sure that a sufficient provision to pay all fees, costs and taxes have been requested in anticipation.


3. It is always possible (although quite tricky) through a specific procedure to challenge the level of notaire’s fees paid after a transaction has been carried out.


Cameron will never live G20 down after that jibe.

I note of course that Guillaume has also "decamped" to London! (see Linked In). Did he walk the walk on that red carpet acress the Channel?

Brittany has had numerous problems over the years with notaires, ranging from blatant lies, lack of impartiality, disappearance with deposits, failure to deal with instructions etc, often as Brian opines coupled with the lack of any viable alternative. Also yes, Guillaume, I was once paid several thousand pounds in compensation (over two decades ago) following an investigation by Parisien avocats I funded of a local notaire's methods. We love France of course (in the round) but her absurd protection of vested interests is unparalleled. Just wish my own profession had enjoyed such munificence in the UK. As ever there are so many lawyers in government it's rather unsurprising that such cosy cartels are given scant priority. Incidentally I asked our last remaining very local notaire for advice last year (meeting and several reminders all unanswered) on an inheritance matter that I have now given up and now the law is changing anyway and a suitably qualified London solicitor has given me advice the week I asked for it (at a cost of course).

Finn, even stranger that when I tried to respond to your message it would only bring me here.

An interesting piece Guillaume, but . . . . Why would the cost of transactions come down if the tarrif is removed? They might just as easily rise particularly where there is a virtual monopoly. Time will tell.

I agree that the chambre des notaires is very protective of notaires and the proc' is not necessarily responding satisfyingly or at all! Hence my suggestion to just drive a bit further.

Approval of comments: as I am not always around, it is just a way to have some assurance that there will not be any which would be misleading or other for such technical subject. So far I am happy to report that I have never rejected any!

The word 'miracles' said it all for me Finn. The words following put my response in better words than I could have chosen myself. As for the approval of comments????

Thanks Finn, you summed one point up very well with the word 'miracles'. The words thereafter I my ideal response. As for the approval of each comment, strange!

In this case, technically, you should write (LRAR LRAR LRAR) to (in this order):

- the notaire,

- the local chambre des notaires,

- procureur de la République.

In practice, it may be easier to just drive a bit further and find a notaire that will not protect his/her territory at the expense of the client's interest.

Understood, but I was looking at the monopoly in terms of seeking Flashlight 1 when notaire X looks at where I live and knows it is in notaire A's territory so he/she can/will not offer me an alternative quote and has several excuses rather than the truth ready to offer me.

The monopoly I mention is not geographical but legal. Notaires have a monopoly to confer authenticity to legal documents.
Under Article 1 of Ordinance N° 45-2590 of 2nd November 1945, notaires are “established to receive all deeds and contracts to which the parties have or want to give the character of authenticity attached to acts of official authority”. Pursuant to Decree N° 55-22 of 4 January 1955 on land registration, to be published in the mortgage office, a deed of sale or exchange of property must be conferred authenticity.

The monopoly enjoyed by notaires is not devoid of certain obligations in return. Thus, unlike other legal practitioners, public and ministerial officers (such as notaires) are required to provide the service client may require. This obviously provided that the officer is required under normal conditions. The notaire has the obligation to refuse to instrument if the act sought appeared illegal or immoral. The transaction you request seems neither illegal nor unusual.

It may be useful to officially (by LRAR) require the notaire to prepare the deed, mentioning your previous steps and communications in that respect. If you receive no satisfying response, send your request and claims to the procureur de la République.

Moreover, the notaire’s could be legally liable if the delay had resulted in a loss for you.

Well Guillaume, you do like to set the cat amongst the pigeons don't you? Yes, absolutely, we live in an area where one woman has a virtual monopoly for lack of any other notaire within easy reach or wishing to put a metaphorical foot in her territory. We have heard that the lady (hm, hm) herslef has been ill and hospitalised for several months and her junior assistant notaire is guarding her domain. We do not need a notaire ourselves, but my wife is selling houses part-time and thus needs to get buyers and sellers to a notaire hastily, in a flash as you would say, but nobody outside this territory will take on clients who belong to their friend. The monopoly is absolute. Its back must be broken. However, the new government seems to be not looking at that as a priority.