When buying a property, the signature of the preliminary contract is often accompanied by the payment of a deposit by the future buyer. This widespread practice reassures the seller of the buyer's solvency and "seriousness". It's a guarantee that the sale will be carried through to completion.
A guarantee for the seller
When a compromis de vente is signed with a notary, a deposit is often required. This is a sort of deposit or advance on the sale price, which is deducted from the outstanding balance. This payment is a custom, not an obligation. It is left to the discretion of the parties. But this gesture is not without importance. It seals the "pre-agreement" on the sale of a property. It reassures the seller. It's proof of the buyer's seriousness, commitment and solvency. The buyer, for his part, will feel committed.
Just as the obligation to pay a deposit is not set down in any legislation, neither is its amount. Generally speaking, it is between 5 and 10% of the sale price. This sum will be deposited by the notary in a special account, pending completion of the final deed.
The pre-contract: an important act
Whether the preliminary contract takes the form of a compromis or a promesse de vente, it is a precise and informative document. No element should be overlooked, as the deed of sale will be based on this document. In particular, it must specify the description of the property to be sold (description, surface area, etc.), existing encumbrances (mortgage, easements, etc.), the sale price, conditions precedent, etc. Given the complexity of legal terms and the multiplicity of existing laws, drafting the preliminary contract is not something you can improvise. Hence the usefulness of consulting a notary.
But not irreversible
Logically, it is impossible to go back on a commitment. But in the case of a deposit, things are a little different. Once the preliminary contract has been signed, the potential buyer has 10 days from the day following receipt of the compromis or promesse de vente to withdraw by registered letter with acknowledgement of receipt. During this period, he/she can reverse his/her decision, without having to justify it. The most frequent case is the non-fulfillment of a suspensive clause (failure to obtain planning permission or a loan to finance the purchase, etc.). In this case, the security deposit is returned. Conversely, the seller may keep the deposit if the buyer does not honor his commitments and the withdrawal period has passed. In this case, the deposit is considered compensation for the loss suffered. The property has been "immobilized", preventing other potential sales.
Security deposit and VEFA
Thepurchase of a property in a future state of completion (VEFA) is a special transaction. The purchaser buys a property that has not yet been built, and that he or she has only seen on a floor plan or advertising brochures. The purchase procedure is also different from a conventional purchase. It takes place in 3 stages. The actual sale is preceded by a pre-contract by which the developer reserves a specific lot in the construction program for the buyer. This is the reservation contract. This is followed by the final notarized sale and delivery of the home. When the reservation contract is signed, the buyer pays the security deposit. The amount of the deposit is capped, depending on the expected date of the final sales contract: 5% maximum if signed within 1 year, or 2% if signed within 2 years. No deposit is required if the delay exceeds 2 years.
As with a conventional sale, VEFA buyers have 10 days in which to withdraw from the contract. Under certain conditions, they can also request reimbursement of the deposit even if the deadline has passed. This is particularly the case if, on delivery, the property does not correspond to the description in the reservation contract. Other possible reasons include the quality of the property being below expectations, leading to a reduction in its value, or the seller's failure to meet the signing date for the deed of sale.
Marie-Christine Ménoire