Understanding the Compromise of Sale

The compromise of sale is a preliminary contract acting as the first agreement between the buyer and seller during a real estate transaction. It serves as a legally binding document, outlining the terms and conditions for the sale. According to Article 1589 of the Civil Code, once both parties agree on the property and its price, the compromise of sale becomes equivalent to an actual sale.

Significance of Signing the Compromise of Sale

The signing of the compromise of sale takes place at a predetermined date and usually involves the presence of one or more notaries. Although not compulsory, it is often considered assuring for both parties when the document is drafted by a notary. Upon signing, no administrative fees will be levied on the parties due to the absence of fiscal registration for compromises of sale. However, the seller must furnish all required documents while the buyer must adhere to any outlined deadlines.

Key Details to Include in the Compromise of Sale

It is crucial to incorporate all necessary details into the compromise of sale document to prevent disputes and ensure smooth transactions. Some of the obligatory mentions include:

• Buyer(s)’ and seller(s)’ contact information;
• Exact address of the property;
• Property origin;
• Detailed description of the property and equipment>
• Existing mortgages or servitudes;
• Technical diagnostic reports;
• Total amounts payable including selling price and agent fees;
• Validity period for promise of sale and deadline for definitive deed of sale;
• Indemnity amount and suspensive conditions.

If the property is part of a condominium, further documents and information must be provided. To ensure comprehensiveness, it is advised to seek assistance from professionals like notaries or real estate agents.

Suspensive Clauses in Compromise of Sale

In most cases, buyers rely on mortgage loans to finance their purchase. The compromise of sale thus includes a suspensive condition stipulating that if the loan is not secured, the buyer can withdraw without any obligations. Other common suspensive clauses encompass:

• Absence of urban planning servitude;
• Renunciation by public authorities’ pre-emptive rights;
• Cleared mortgage situation at the time of sale.

Process After Signing the Compromise of Sale

After signing the compromise of sale, there will be several months before the final deed (acte de vente) is drawn up. This period permits verification of all suspensive clauses, allowing purchasers to secure their mortgage loan needed for financing the transaction. In the meantime, the notary will handle necessary formalities prior to signing the deed.

Drafting Options for Compromise of Sale

Both parties have several options when drafting the compromise of sale document. While a notary can prepare it, they also have the choice to create a privately-signed compromise of sale by themselves. However, an expert’s help is highly recommended to address any legal intricacies or possible suspensive clauses.

Final Thoughts

The compromise of sale serves as a crucial foundational agreement between the buyer and seller during a real estate transaction, encompassing essential details and conditions. Ensuring this contract’s accuracy and comprehensiveness is vital for smooth transactions and reducing the chances of disputes. Seeking professional assistance to draft and ensure the validity of this document is thus highly advised.