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A little while ago, the then president of the Paris chambre de notaires told me that given the way things were changing in French property sales, they may as well adopt the English system of conveyancing. He was referring not to the whole contractual process but to the question of surveys and inspections. The number and procedures of these searches have changed substantially over recent years, affected also by environmental considerations.
Searches for the presence of termites or lead paint in some properties have long been a standard requirement, so have inspections for asbestos. Whether such pre-completion inspections are required on each property depends on issues such as age of property and location.
The notaire’s comments referred in part to these long-standing inspections, though they themselves have been subject to change. Previously, the searches were carried out prior to completion of the final purchase deed, but following the initial purchase contract (normally called the compromis de vente). While the termite search would allow a buyer to withdraw if it were not clear, the other searches were in general for information purposes only.
Now, though, the searches are to be annexed to the initial contract, and the seller can consider them as part of the process of deciding whether to buy. This resembles very closely the English experience where a buyer can assess all aspects of a property before being bound to buy.
The English system has itself, of course, changed dramatically in the recent months. The much heralded home information packs have finally been introduced, albeit in a greatly limited format from that originally anticipated. The main component of the new packs is the energy efficiency report. Since France had instituted such surveys a good while before, my notaire was ironically misguided in this aspect: the UK was following where France had already been.
It is true, though, that the buyer now has a much better picture of the property he is buying. Moreover, in these times when climate change – and its effects – are a concern for us all, the buyer knows more about the region where the property is situated. More recent pre-contractual reporting requirements include a declaration of the existence of any known local geological or geographical risks, such as landslip, flood, avalanche or forest fire.
While the risk of such threats can be self-evident from the location (avalanche must be recognised as a risk in Alpine ski resorts, and low-lying areas near rivers must have a potential for flooding), the report will set out a list of previous incidences registered in the commune, so that their frequency and extent can be taken into account.
Concentrating again on the property to be bought, there are now inspections for gas and electricity installations.
The gas inspection is now compulsory where there is a gas appliance in a property, depending on when it was installed. There are new powers endowed upon the inspectors relating to the gas inspections: where an inspector deems the installation to be unsafe, he can disconnect it straightaway, with a requirement that any corrective works be carried out, such as improvements to ventilation. The electrical installation search will be compulsory commencing 1 January 2009, for sales of all houses more than 15 years old. It will be intended for information purposes only, although it will establish where any of the electrical installation is aged or not sufficiently protected. Inspections will not involve breaking down of the electrical system, nor movement of furniture. The gas and electric inspections will be valid for three years.
Gas and electrical installation surveys can, of course, help to ensure that a property complies with current regulations in such matters. The energy efficiency survey though will steer a property owner – or a new buyer – towards improvements that can be made to the property. Using the now generally recognised energy efficiency table, a survey report is produced to assess the overall energy performance of a property and the level of its annual greenhouse gas production. This will produce an insight for the buyer.
As well as this, the report sets out a list of various improvements that could be made to the property. More importantly, this report sets out the likely cost of any such improvements and their relative value, that is to say the effective savings mark and the probable time period that would be required to recoup the original expenditure. A full cost benefit analysis can thus be made for all proposed improvements.
It is important to note that this energy efficiency search is not limited in scope to property transfers only. People looking to rent out properties are also obliged to produce such a report. This obligation applies to landlords selling up or renewing long-term leases. However, season lets can also be affected, and as such, all property owners who let out gîtes or other holiday cottages should check whether they would need to provide an inspection. Such inspections are simplified for rental properties.
The benefits of such inspections are apparent in that they can help to guide property owners towards more efficient and environmentally friendly property. The Parisian notaire may have had a point – all of these searches do mean that there is some proximity to the English conveyancing system, at least insofar as pre-contract enquiries are concerned. The benefits on all sides must be acknowledged however, since everyone is fully aware of the state of the property.
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