"In the sales agreement, I would like you to insert a suspensive clause stating that I must first sell my current property."
This is a recurring request and also the typical example of a "potestative" clause.
A so-called potestative clause depends solely on the will of one of the contracting parties, in this case the buyer.
Why that ?
The other party, the seller, has no power over the means you will use to put your current property up for sale, or the price at which you will agree to sell it. You can therefore withdraw from the sales agreement (by putting in few resources, by selling too high).
Consequences?
In court, the clause has a very high chance of being considered null and void. What you thought in good faith was a way out becomes a trap that can close in on you.
The “administration de l’enregistrement” refuses to consider this clause as a valid suspensive clause. The impact can be significant here too. In the absence of a valid suspensive clause, the registration fees (6%) are payable as soon as the agreement is registered. When a real estate agent is involved in the transaction, the sales agreement must be registered within 10 days of its signing.
In other words, if you do not have any other valid suspensive clause in your sales agreement, you will have to pay 6% of the property price before the notarial deed.
What to do if your purchase depends on the sale of another property?
There are two possibilities, each with their advantages and disadvantages.
You sell your property before you buy, so you know exactly how much you have in hands. The disadvantage is that it may be necessary to rent a few months before being in your new property.
You buy your new home and the bank grants you a bridge loan to cover the entire purchase while waiting for the funds from the sale of your current property. The disadvantage is that you do not know how quickly and at what price you will sell.
In any case, before starting a purchase process, if it has to go through a loan, the number one advice is to go see one or more credit broker(s)/bank(s) to find out your borrowing capacity.
We will be happy to help you with this!
Written on 30 Aug 24
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