THE FRENCH LEASEBACK BUYING PROCESS

In the initial stages of the buying process of a leaseback property you have to decide on the location and size of the property. You also have to establish the budget and have a preliminary mortgage assessment done to find out how much you would be able to borrow if you were to finance your purchase this way . Once you have decided on your French leaseback property, the procedure is the same whether you have decided to acquire a leaseback apartment, ski-chalet, villa or house.

To start the French leaseback buying process, you should put an option on the leaseback property you selected. At most leaseback developers, these options have a maximum duration of 72 hours. Within this time slot you have to transfer your deposit into the escrow account of the notary in order to reserve the property. The deposit is usually 5% of the purchase price TTC (including VAT).

Then the contracts should be signed: the ‘contrat de réservation’ (reservation contract) and the ‘bail commercial’ (commercial lease agreement). At most developers these documents are in French; however, some of the major French leaseback developers also have English translations available. Depending on the developer, the amount of documents you have to sign can be daunting; often floor plans, site plans, furniture agreements, descriptions of fixtures and fittings have to be signed as part of the reservation contract. The ‘bail commercial’ usually contains details such as the length of the lease and the guaranteed income of your French leaseback property. At this time the mortgage application for your leaseback should also be completed. Additionally, a French bank account should be opened in which you will receive your guaranteed income and mortgage.

Once the ‘contrat de réservation’ is also signed by the developer, the 7-day cooling-off period begins in which you can still decide to cancel the purchase of your French leaseback property. In this case, the deposit would be returned to you. All those owning a French leaseback have to deal with the ‘Centre des Impôts’ (the French tax office). Therefore each leaseback purchaser has to fill out a ‘Kit Fiscal’.

After the mortgage offer has been signed and has been sent back to the bank, the final contract will be prepared. This ‘Acte de Vente’ (title deeds) does not necessary have to be signed in France but can also be signed by power of attorney at the French embassy. At this time, you will usually have to pay another stage payment. Having done this, you now own your own French leaseback property!