As part of a unilateral promise to sell real estate (apartment, house, business or commercial premises), the buyer has an option called “option waiver”. As long as this option is activated, the beneficiary of the promise to sell reserves the right, at any time, to decide whether to buy the real estate in question or not. So in this article, we will go into the details of the operation of the lifting of purchase option .
Plan de l'article
- In what type of sale is the option waiver used?
- How does the option lift take place?
- How important is the unilateral promise to sell?
- Why sign a sales agreement?
In what type of sale is the option waiver used?
It should be noted that a waiver of option is an act that applies as part of a unilateral promise to sell. Indeed, it should be noted that the process of selling real estate consists of two stages:
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- the first step is for the seller and the buyer to sign a promise to
- sale the second stage of the sale of real estate is the signature of the final deed of sale.
Moreover, this promise to sell can take two different forms: a one-sided form and a synallagmatic form. The latter is more like a sales compromise.
Thus, the course of the sale of real estate will not be the same depending on the type of promise.
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Sign the promise to sell
In connection with the signing of a unilateral promise to sell, the seller is obliged to keep a commitment to sell against a buyer. The latter, on the other hand, is not obliged to undertake to acquire the property. Thus, from the moment the signing of the unilateral promise to sell is enacted, the buyer has two choices: either he lifts the option and finally buys the property, either he does not lift the option and waives the purchase . This freedom of the buyer is limited by a time limit set upstream by both parties.
Sign the final deed of sale
Second, when the promise to sell is synallagmatic, the seller and the buyer agree to each other. Thus, the seller undertakes to sell his property to the buyer; and the buyer undertakes to purchase the property in question . Here, there is no room for an option waiver since both parties have committed each other.
Regardless of the promise chosen, the buyer is required to pay a certain amount of up to 10% of the final sale price to the seller . This is for the purpose of sealing the sale pending the signing of the deed of sale. This amount will be used as a capital allowance for seller.
How does the option lift take place?
For the buyer, it is imperative to make a decision within the time limit set in the terms of the promise to sell. Furthermore, the buyer has complete freedom to decide whether to lift the option or not.
In the terms contained in the unilateral promise to sell, the conditions governing the waiver of the option should be stipulated . In particular, it should be clarified whether the waiver of the option is tacit or express. In the majority of cases, the buyer and seller agree to an express waiver of option; that is, the option waiver will be activated by the buyer via registered mail with acknowledgement of receipt from the seller.
If the buyer lifts the option
In the event that the buyer finally decides to buy the real estate, he must “lift the option”, making sure to prior to the fact that it is always on time. By this act, the buyer informs the seller that he wants to conclude the deal. In addition, through the lifting of the purchase option, the seller and the buyer become reciprocally engaged . Thus, the seller will sell his property well and the buyer will buy it well. From there, the buyer can no longer reverse and must absolutely sign the deed of sale.
If the buyer does not lift the option
If he is still on time, the buyer is entitled not to lift the option. Depending on the terms agreed in the promise to sell, the buyer may refuse to waive the option to purchase either expressly or tacitly.
- Expressly, the buyer simply informs the seller of his intention not to lift the option before the deadline has arrived.
- The buyer may also waive the waiver of the purchase option tacitly. This means that he will not say anything until the deadline and even after. Thereafter, the unilateral promise to sell will lapse. In addition, the seller will retain the amount paid to him by the buyer in respect of the capital compensation, if and only if the suspensive conditions are all waived.
It is clear that the one-sided promise to sell is a better compromise for the seller. Indeed, in the event that the buyer refuses to lift the purchase option, he will be able to return his property for sale to other potential buyers while benefiting from the capital compensation. In fact, a seller has an interest in signing a unilateral promise to sell, because he will still earn money. The reservation or immobilization of the property is accompanied by a financial consideration . Thus, refusing to lift the option of purchase, the buyer will lose the amount he has deposited.
Right of withdrawal and loan clause
When buying a property by a private individual, the buyer takes advantage of two types of deadlines. The first is a right of withdrawal which lasts 10 days and the second is the time required to obtain the real estate loan if he requests one from a financial institution; this is called in jargon “a suspensive condition for obtaining credit”. Thus, the deadline for the lifting of the option should be fixed only after the end of these two deadlines. Indeed, French law protects buyers against financial penalties. Thus, the buyer has the right to refuse to purchase a property if he respects the ten days of withdrawal or if the bank refuses his loan.
How important is the unilateral promise to sell?
It should be noted that prior to 1 June 2001, individuals who were embarking on a project to purchase real estate were not entitled to withdraw. Indeed, by affixing their signature on a promise to sell, they had only a very short time to choose whether to buy the real estate in question permanently or not. Today, and since June 1, 2001, once the signing of a unilateral promise to sell or a synallagmatic promise has been signed, a purchaser who buys real estate intended for housing benefits from the right of withdrawal which lasts ten days after the signing of the promise to sell.
Indeed, it is important to know that buying real estate is a decision that should not be taken lightly. Moreover, this process can be a serious commitment for those who make a long-term loan. Thus, it is at the time of signing the promise to sell that the importance of investment is emerging. It is for this reason that the right of withdrawal and the withdrawal of the purchase option are important . They allow to pass the favorite effect to return to something more reasoned. Indeed, if the decision to buy real estate is the result of a good first impression, it is always possible to obtain a delay for further reflection and to weigh better the pros and cons.
Why sign a sales agreement?
If you are a real estate owner, you should know that signing a deed of sale of real estate must always be preceded by a sale agreement . This is used to lay down in writing all the conditions of the sale.
The sales agreement:
This sales compromise is actually a a pre-contract in which you agree to sell your property to a particular buyer, and that buyer undertakes in turn to purchase your property from you. The sales agreement also sets the agreed selling price. It contains various information concerning the general and special conditions of the sale, the suspensive conditions and the deadline for signing the final deed of sale.
Annexes to the sales agreement
- Technical Diagnostics File: As a real estate owner, before selling your property, you must establish a technical diagnostics file. For this you need to hire a professional diagnostics. It is important to know that this file brings together all the diagnoses concerning housing. The buyer is entitled to request consultation of this file in order to enable him to make a purchase with full knowledge of the facts. Among the important diagnoses that must appear in this folder, there is the diagnosis of energy performance. In the case of a detached house, the technical diagnostics file must include a sanitation diagnosis.
- Documents for the sale of condominium lot: Under the Alur law, you, the owner of a condominium apartment, must attach to the sale agreement a set of documents aimed at informing the buyer about the conduct of the condominium and the financial situation of the condominium lot. You can also hand all these documents directly to the buyer. Among the necessary documents is the condominium regulation and the descriptive state of division. These are two documents that distribute the charges and organize life in condominium. We must also find the minutes of the general meetings, and finally a summary of the condominium. A document indicating the condition of the building must also be present. In fact, it is a housing health book.
It should be noted that certain types of sellers can be exempted from the provision of certain types of documents. In fact, regardless of the type of sale, an order dated August 29, 2015 alleviates the amount of information that the seller must provide to the buyer. This relief occurs in two possible cases:
- The buyer is already co-owner in the condominium: in this particular case, you, as the seller owner, do not have the obligation to hand over all of these documents to the buyer; because, in principle, he already owns them. These non-mandatory documents are the condominium by-laws, the minutes, the descriptive state of division and the maintenance log. By the way, you must always give him the information concerning its financial situation .
- When the buyer buys an ancillary lot: the number of documents to be provided to the buyer is significantly reduced if the sale concerns an ancillary room (a car park, a storage room, a shed, a garage, a cellar, an attic or even a storeroom). In this case, your obligation relates only to financial information.
The role of the notary in a sales agreement
It is strongly advisable to call a notary when signing a sales agreement. It should be noted that both parties can directly make the signature. In addition, all aspects relating to the drafting of the document and the full audit of the file must be handled by a professional. The notary, as a legal professional, will be useful to advise you and help you in the collection of all documents to be annexed to the compromise of sale. The presence of a notary when signing a sales agreement is also a guarantee of security when drafting the general and special conditions of the sale.
It should be noted that the deed of sale must be signed before a notary. In many cases, both the buyer and the seller call on their own notary.
As a seller owner, you should pay close attention to the content of the promise to sell or the sale agreement. You need to choose what will suit you best, while keeping in mind that the buyer has the right to waiver the option. In the majority of cases, the non-realization of a sale comes from the buyer, but it can also be your fault . Thus, it is strongly recommended to always seek the advice of a notary or any other real estate law professional in order to be well accompanied in the sale to a promoter.