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Completion Dates in French Property Sale Contracts

Wednesday 06 January 2016

When the scheduled date for completion on a sale passes with completion not having taken place it does not normally mean the contract is null and void.

The legal process for purchase of a property in France is in two stages.

In the first stage buyer and seller sign the sale and purchase contract, either a compromise de vente or a promesse de vente. These contracts types are broadly similar, although the former is normally used.

Within the contract two dates are normally specified, the first a date by when any conditional clauses must be fulfilled, and a second later date, when the deed of sale (acte authentique) is signed and the keys and monies exchanged.

The legal status of these two dates is normally very different.

In the case of conditional clauses, buyer (and sometimes seller) are required to fulfil certain conditions by a final date, such as obtaining a mortgage or planning permission.

Where the date passes without one or more of the conditions having been fulfilled the sale and purchase process ends. The deposit is refunded to the buyer by the notaire, subject to them having properly fulfilled their obligations concerning any conditional clauses.

However, the nature of the date for signing the deed of sale is completely different, for unless specified to the contrary it is merely an indicative date for completion, not one by which, if completion does not take place, the sale cannot proceed.

Accordingly, provided any conditional clauses are met by the final date stated in the contract, if the date for signing the deed of sale passes with completion not having taking place a new date is arranged. In such contracts the date for completion is stated to be 'suspensif'.

The date for completion may well be delayed as searches have not been completed by the notaire, or the date indicated in the sale contract is no longer convenient to one of the parties.

The parties can also agree to extend the date to allow more time for the conditional clauses to be fulfilled, although in such circumstances, strictly speaking, such a change to the contract does require to be agreed in writing.

In the event that one of the parties no longer wishes to proceed with the sale, then, depending on the precise terms on the sale contract, the other party can either oblige them to sign, if necessary by court order, or obtain damages for breach of contract.

In some rare cases it is possible to sign a sale contract in which the date for completion is stated to be final. In these circumstances the date for completion is said to be 'extinctif'.

Where the date is extinctif if completion does not take place before or on the date stated in the contract the sale does not proceed.

In such circumstances the facts would need to be examined to determine which of the parties might then be entitled to sue for damages.

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