The promise to purchase and sell

The promise to purchase or the promise to sell

The promise to purchase or the promise to sell is generally the first legal document signed by the parties in a real estate transaction. It precedes the notarial deed of sale and establishes the main conditions on which the buyer and the seller agree to conclude the transaction.

This document provides, in particular, for the purchase price, the financing conditions, the applicable time limits, the inclusions and exclusions, as well as any other condition the parties consider important. Once accepted, the promise to purchase produces significant legal effects and binds the parties according to its terms.

Before signing a promise to purchase or a promise to sell, it is important to fully understand the scope of the commitments it contains. A notary can advise you on the legal consequences of these documents and ensure that your interests are adequately protected throughout the transaction.

Contrary to what many believe, a promise to purchase is not a mere preliminary document from which it is easy to be released afterwards. By accepting a promise to purchase or a promise to sell, the parties bind themselves legally and assume obligations that may have significant consequences.

Once signed, the promise to purchase generally becomes difficult to amend, and it can be complicated to withdraw from the commitments it sets out. That is why it is essential to fully understand the scope of the conditions, time limits and obligations it contains before signing it.

A prior review by your notary makes it possible to identify the legal issues specific to the transaction, to ensure that your interests are adequately protected and to prevent difficulties whose consequences can sometimes be significant.

The purchase of an immovable is often one of the most important investments of a lifetime. It is therefore prudent to obtain legal advice before making a commitment that could bind you for several years.

Selling is not always a matter of pure choice

In principle, an owner is free to sell their immovable. However, certain situations require that authorizations be obtained beforehand or that specific formalities be complied with before a sale can be validly concluded.

For example, the consent of the spouse may be required in the case of a family residence. In other circumstances, specific authorizations may be necessary when the immovable belongs to a minor or a protected person, when it is a heritage immovable or when specific rules apply to certain immovables or territories.

The validity of a real estate sale may therefore depend on compliance with certain legal requirements specific to the owner’s situation and to the nature of the immovable. A prior verification makes it possible to avoid delays, complications or disputes that may affect the transaction.

Before putting an immovable up for sale or signing a document that binds the parties, it is prudent to consult your notary. The notary can verify the required authorizations, advise you on the steps to take and ensure that the transaction is carried out in accordance with the law.

Sale with legal warranty

The sale of an immovable entails rights and obligations for both the seller and the buyer. The buyer must, in particular, pay the agreed price and take delivery of the immovable, while the seller must deliver it in accordance with the conditions of the transaction.

The seller is also bound by certain warranties provided by law. In particular, the seller must warrant to the buyer the validity of the right of ownership and the absence of defects of title or undisclosed charges that may affect the immovable. The seller must also, within the limits provided by law, warrant against the existence of certain rights or restrictions that may compromise the normal use of the property.

The seller is also bound by the warranty of quality, commonly called the warranty against latent defects. This warranty covers certain major defects that existed at the time of the sale, that were unknown to the buyer and that a prudent and diligent buyer could not have discovered when examining the immovable.

The scope of the legal warranty may, however, vary according to the circumstances and the stipulations agreed upon between the parties. Within certain limits provided by law, the parties may indeed modify its extent or waive it in part or in whole.

Given the significance of the legal consequences attached to these warranties, it is essential that the clauses of the deed of sale be adapted to the particular situation of the seller and the buyer. The notary can explain the scope of the applicable warranties and draft the appropriate clauses so that the transaction faithfully reflects the will of the parties and complies with the requirements of the law.

The title search: a necessity

Before proceeding with the sale of an immovable, the notary carries out the customary verifications to ensure that the title of ownership is valid and that the transaction can be carried out in complete legal security.

The notary verifies, in particular, that the seller is indeed the owner of the immovable, that the seller has the capacity and the right to sell it and that all the required consents have been obtained where the situation so requires.

The examination of the certificate of location also makes it possible to confirm several important elements, in particular the conformity of the occupation of the land, the location of the buildings, the existence of any encroachments, certain restrictions on use or the presence of servitudes that may affect the immovable.

By analyzing the titles of ownership and the entries published in the land register, the notary can also identify the hypothecs, seizures, judgments, servitudes or other rights that may affect the property or limit its use.

These verifications allow the buyer to know precisely the extent of the rights being acquired and help to ensure the legal security of the transaction.

The notary’s involvement is thus intended to prevent difficulties before they arise and to ensure that the buyer can become the owner of the immovable with complete confidence.

The sale price

The notary also plays an important role in managing the financial aspects of the transaction. When the buyer pays cash, the sums may pass through the notary’s trust account. The notary then ensures that the funds are released to the authorized persons only after the required verifications have been completed and the documents necessary for the legal security of the transaction have been obtained.

The sale of an immovable may also raise various questions related to financing. In some cases, an existing hypothec may be repaid at the time of the sale. In others, the parties may consider different financing solutions adapted to their situation. Each of these options has legal, financial and sometimes tax consequences that it is important to fully understand before making a commitment.

The notary can explain the available mechanisms to you, analyze their advantages and disadvantages with you and help you choose the solution best suited to your objectives and your financial situation.

Whether it concerns the secure management of the funds, the repayment of an existing hypothec or the setting up of a particular method of financing, the notary’s role is to see to the legal security of the transaction and the protection of the interests of the parties.

The new house

Buying a new property does not necessarily eliminate all the risks related to construction. In certain circumstances, parties who took part in the construction of the building may benefit from recourses provided by law when they have not been paid for their work or their materials.

Even after the deed of sale is signed, certain verifications remain important in order to adequately protect the buyer. The financial consequences of such claims can sometimes be significant and affect the value of the building or the ability to dispose of it freely.

The notary can advise you on the protective measures available and ensure that the appropriate verifications are carried out before and after the transaction. Depending on the circumstances, certain additional protections may also be considered in order to reduce the risks related to legal construction hypothecs.

The acquisition of a new property therefore deserves particular attention. Adequate legal guidance makes it possible to secure your investment and to prevent difficulties that may arise after the deed of sale is signed.

The notarial deed of sale: a precious document

The notary drafts the deed of sale with the rigour and precision required to protect the rights and interests of each of the parties. The notary sees to it that the transaction faithfully reflects their agreement and complies with all the requirements provided by law.

The notary also receives the complementary acts necessary to carry out the transaction, whether a deed of hypothec, an acquittance, a servitude, an indivision agreement or any other act required in the circumstances.

The notarial act is an authentic act to which the law gives particular probative value. It is proof of its content and benefits from the guarantees associated with the involvement of the public officer.

The original of the act is kept securely in the notarial profession’s technological vault, ensuring its preservation, integrity and permanence. The parties can obtain authentic copies when necessary, even several years after the act is signed.

The notary’s involvement thus makes it possible to ensure the legal security of the transaction, to protect the rights of the parties and to preserve the essential documents related to it.

Buying a property as a couple

More and more couples, whether married, in a civil union or de facto spouses, are choosing to acquire a property together. Very often, people will simply say that the house is “in both names”. Legally, this is generally undivided co-ownership.

Acquiring a building in undivided co-ownership, however, raises several issues that are best anticipated from the outset. What will happen if one of the co-owners wishes to sell their share? How will expenses, work or improvements be divided? What will become of the property in the event of separation, disagreement, incapacity or death of one of the co-owners?

The indivision agreement serves precisely to govern these situations. It may set out the rules relating to the occupancy of the building, the sharing of expenses, maintenance, work, the sale of a share and the mechanisms for settling disputes.

Because every family and financial situation is different, this agreement should be adapted to the particular needs of the co-owners and to their long-term objectives.

The notary can advise you on the protections to put in place and draft an indivision agreement that will ensure the legal security of your investment while preventing a number of difficulties that may arise over time.

The various proposals to purchase

The purchase of a building often begins with an offer to purchase, a counter-offer or a promise to purchase. Although these documents may seem simple at first glance, they produce important legal effects.

When a proposal to purchase is accepted in accordance with its terms, it generally becomes a preliminary contract that binds both the buyer and the seller. Even though the deed of sale will be signed later before a notary, the parties have already made commitments that may be difficult to change or cancel afterwards.

It is therefore essential to fully understand each of the clauses before signing. Some forms may, in particular, provide for strict deadlines, financing conditions, penalties, the payment of a deposit or limitations on certain rights and recourses.

A promise to purchase that is poorly suited to your situation can have significant consequences. A prior analysis by your notary makes it possible to verify that the proposed conditions adequately protect your interests and truly reflect your intentions.

The purchase of a building is often one of the most important financial commitments of a lifetime. Before signing an offer to purchase, a counter-offer or a promise to purchase, take the time to obtain the appropriate advice in order to understand the scope of the obligations you are about to assume.

Can this preliminary contract be cancelled?

Once accepted, the promise to purchase generally constitutes a preliminary contract that legally binds the parties. Except by mutual agreement or in a particular situation provided by law, it is generally not possible to freely put an end to this commitment.

The buyer and the seller are then bound to honour the obligations they have accepted. In the event of default, the aggrieved party may exercise the recourses provided by law, which may include specific performance of the agreement, an action to compel transfer of title or a claim for damages, depending on the circumstances.

Many people wrongly believe that they automatically have a period of a few days to go back on their decision after signing a promise to purchase. In reality, such a right does not necessarily exist. The possibility of withdrawing depends on the conditions set out in the contract or on the particular rules applicable to the situation.

Certain clauses may, however, give the parties particular rights, notably when a financing condition, an inspection condition or any other essential condition is not fulfilled within the time provided.

Before signing a promise to purchase, it is therefore important to fully understand the legal scope of the commitments undertaken. A prior analysis by your notary makes it possible to verify the conditions of the contract, assess the risks and ensure that your interests are adequately protected before you are bound by obligations that may have significant consequences.

The new house, an exception?

There are, however, certain exceptions. In specific circumstances provided by law, the buyer may benefit from a right of resolution allowing them to put an end to their commitment within a set period.

This is notably the case when the building is sold by a builder or a developer to a natural person who intends to acquire it in order to occupy it personally as a residence. In this particular situation, the law gives the buyer a period during which they may, under certain conditions, withdraw from the transaction.

This right is an exception to the general rules applicable to promises to purchase and preliminary contracts. It therefore does not apply to all real estate transactions.

Before assuming that a promise to purchase can be cancelled, it is important to verify whether the conditions provided by law are actually met. The consequences of a resiliation or of a refusal to proceed with the transaction may vary depending on the nature of the building, the clauses of the contract and the circumstances specific to the file.

Your notary will be able to analyze your situation and inform you of the applicable rights, recourses and time limits before you make a decision that may have significant legal consequences.

The content of a good proposal

The promise to purchase is often the decisive step in a real estate transaction. When well drafted, it makes it possible to clearly define the rights, obligations and expectations of each of the parties while reducing the risk of disputes later on.

The notary can assist you in preparing or analyzing this document in order to ensure that all the essential elements of the transaction are adequately provided for in it, in particular:

• the conditions precedent to the sale;
• the precise description of the building;
• the inclusions and exclusions;
• the price and the terms of payment;
• the deposit and the terms on which it is held;
• the warranties granted by the seller;
• the documents to be provided;
• the time limits applicable to the inspection, the financing, the signing of the deed of sale and the occupancy of the building;
• the allocation of costs between the parties.

Every transaction has its particularities. An omitted clause, a poorly drafted condition or a misunderstood deadline can have significant consequences. A prior analysis makes it possible to ensure that the promise to purchase adequately reflects the intentions of the parties and protects their interests.

The acquisition or sale of a building is often one of the most important financial decisions of a lifetime. The notary guides you at every step so that this transaction is carried out within a legal framework that is clear, secure and suited to your situation.