In many cases the French town hall has the right to preempt the sale of a property within its commune’s boundaries, known as the “droit de préemption urbain” in French. There are various rules about how they declare which areas of the commune are subject to this right, but suffice to say that the notaire will know and will tell you if it applies to the property that you are buying or selling.
The law only applies to houses, blocks of flats older than 10 years and land, although it has recently been extended to take in businesses as well in certain circumstances. It does not apply to individual flats in a block and cannot be invoked for inheritances, the purchase of the whole property by one member of a shared ownership, gifts between parents/grandparents and children or relatives up to the 6th degree, gifts between spouses or a couple in a civil union (PACS).
There must be a good reason for the purchase which will benefit the community: to achieve some public project, safeguard the heritage of the commune, public hygiene etc.
The Preemption Process
In practice the notaire informs the town hall of the intention to sell the property on the signing of the compromis and the town hall must reply within the stipulated time period of 2 months if they wish to purchase the property instead of the buyer.
Where they wish to preempt the procedure is as follows:
- The commune informs the seller of its wish to preempt and accepts the price and conditions, so the sale proceeds and the acte authentique de cession is signed by both parties.
- The commune informs the seller of its wish to preempt but at a lower price. The seller has two months to accept or reject the offer. If he rejects it, one of the following takes place:
- The seller withdraws the property from sale.
- The seller rejects the price but wants to continue with the sale. The commune has 2 weeks to go before the “juge d’expropation” (the judge who rules on compulsory purchase) in the “tribunal de grande instance” (high court) and ask for a judgement date. Within a week the judge will fix a date to visit the property and inform all parties to the sale at least 2 weeks in advance. He will then fix a price in court. Interested parties will have 2 weeks to appeal. After that they will 3 months to complete the sale and 6 months to pay the total price, but the seller keeps possession of the property until he has received the total sum due.
The seller can withdraw from selling the property at any time during this process.
If the town hall does not like the price decided, they can withdraw from the purchase and the seller is free to sell his property at the price decided by the tribunal at any time within the next 5 years.
Right to Retrocession (Reassignment)
If the town hall do not carry out the activity cited as the reason for preemption within 5 years of the purchase, or want to use it for another purpose, they must contact the original seller and offer them the property for the original price. He has two months to decide. If he does not want it they must then contact the person who was originally going to purchase it, if they were named in the original paperwork and offer them the chance to buy it as well.