Fernand and Jacqueline own a pretty house with a small garden. With a small pension, they'd like to supplement their income without changing their habits. They've heard about life annuities, but are still reluctant. Stéphanie Swiklinski, a qualified notary, helps them sort out their preconceived ideas about life annuities.
Fernand
Does life annuity selling only benefit buyers?
Stéphanie Swiklinski: Life annuity sales are definitely a solution worth considering. For the seller, it goes without saying that there's a certain "psychological hurdle" to overcome. But for those who wish to remain in their home despite advanced age, while at the same time earning a supplementary income, life annuity sales can be a good option. With an occupied life annuity, for example, you can pocket a substantial capital sum while remaining in your home, and above all receive an annuity for life to supplement your income. This will enable you to finance home care (which is often very costly). It's a particularly attractive option for people who have no children of their own, and whose children could help out.
Jacqueline
So it is possible to sell an occupied life annuity?
Stéphanie Swiklinski: It is indeed possible to sell your home as a life annuity while continuing to live in it. In this case, you reserve the right to use and live in the property for the rest of your life. This is an occupied life annuity, unlike a free life annuity. This right of habitation can be reserved until the death of the seller's spouse. In this case, the annuity paid will be reversible, meaning that on the death of one spouse, it will continue to be paid in full to the survivor. Each clause has its importance! The deed of sale must provide for the distribution of charges relating to the property. Very often, it is stipulated that rental repairs and council tax are to be paid by the vendor, and property tax by the purchaser. However, a different breakdown of charges can be agreed by contract.
Fernand
What happens if the buyer can no longer pay?
Stéphanie Swiklinski: This is the main risk to which you may be exposed: non-payment of the annuity by the buyer. You need to choose your buyer with the utmost care! If payments are irregular or stop abruptly, you could find yourself in a delicate financial situation. Fortunately, there is a resolutory clause. Always included in the deed of sale, it allows you to have the sale annulled by the tribunal de grande instance. But this can take time, and time is money that doesn't come in! Ask your notaire for advice before making a viager sale, as he or she will be able to advise you on all the precautions you need to take.
Stéphanie Swiklinski