Just because you've signed a compromis de vente with your buyer doesn't mean the sale has been finalized. Beware of suspensive conditions!
What is a suspensive condition?
A compromis de vente may include conditions under which the sale will only become final once these have been met. The completion of the sale is therefore subject to the fulfillment of the suspensive conditions. The effects of the sale are then suspended until the occurrence of a future and uncertain event, set up as a condition(new article 1304 of the French Civil Code) and not dependent on the will of the parties.
The contract is therefore formed as soon as the parties agree on the essential points of the sale (e.g.: thing sold, sale price), but it does not immediately produce all its effects.
What are the most common conditions precedent?
In most cases, a compromis de vente includes one or more suspensive conditions. Most often, these are :
- The suspensive condition of obtaining a loan: a compromis de vente must always mention whether or not the price will be paid by means of a loan. If this is the case, the buyer's commitment is conditional on obtaining a mortgage. With this condition, if the buyer does not obtain financing within the allotted time (production of the loan offer), he will not be committed and the sale will not take place.
- The suspensive condition of the sale of another property: in this case, the compromis must specify that the sale can only take place once the buyer has sold his property, which he will use to finance his new acquisition in whole or in part.
- The sale may be subject to administrative authorization: if the buyer is purchasing a plot of land with a view to building a house, the compromis should include the suspensive condition of obtaining a building permit. Without such authorization, the land would lose all interest.
For example, the clause might read: "If the aforementioned condition is not fulfilled within three months, the present agreement will be considered null and void. "
If the suspensive condition is not fulfilled
can I get my deposit back?
When signing a compromis de vente, the buyer often pays a sum, known as a deposit, corresponding to 5 or 10% of the price. Once the withdrawal period has expired, the buyer has the right to recover the deposit if one of the conditions precedent has not been fulfilled. For example, if he fails to obtain financing, he can recover the amount paid. To do so, he or she must provide the seller with a loan refusal certificate. It is up to the buyer to prove that the condition has not been fulfilled.
Stéphanie Swiklinski