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When purchasing an off plan property in France,
the reservation deposit is fully refundable. The
buying procedure is simple and straightforward and
contracts are government regulated.
How much is the deposit?
When purchasing an off plan property, French law
clearly states that the deposit required for the
reservation of the property cannot exceed 5% of the
purchase price.
This is an attractive benefit which reduces the
purchaser’s initial outlay. In the case of
other property transactions the deposit required is
10%.
If the time limit for the completion of the sale
(signing of the Deeds) exceeds two years the deposit
required is reduced to 2%.
The law (article R.261-29 of the Construction and
Dwellings Code) also requires the deposit to be paid
into an escrow account (compte
sequestre) “where the sum
shall remain unavailable, non transferable and
unattainable until the signature of the Deed of
sale.”
When is the deposit refunded?
The deposit is returned to the purchaser, without
retention or penalty, under clearly laid down terms
in the contract, amongst which:
- If the purchaser decides to cancel his or her
reservation during the 7 day statutory cooling off
period which follows the signing of the French
reservation contract.
- If the mortgage applied for to finance the purchase
is not granted within the stated time for the
mortgage application (usually one month from signing
the French reservation contract) and the buyer is
unable to proceed.
- If, due to an act of the vendor, the sale agreement
is not concluded within the time limit provided for
in the French reservation contract.
- If any of the items of equipment provided for in
the reservation contract is not completed.
How is the deposit paid?
The securing deposit is paid in Euros and usually by
bank transfer as it is lodged directly into the
designated escrow account.
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