The Gazette 1967/71

England

The registers of the Bureau des Hypotheques cannot be "frozen" by search, and the French system is therefore to make searches after "com– pletion". The purchase money is normally paid to the notary, and he holds it until a clear search, made at the same time as registration of the acte de vente, is obtained. If outstanding charges are disclosed, the notary pays them off, and pays over the balance to the vendor. If the charges disclosed exceed the purchase price, there is an elaborate procedure called purge whereby the charges have the option of accepting the purchase price, discharging the property and pursuing the vendor for the balance, or of requiring the prop– erty to be resold by auction. Cost to Parties What then is the cost of all this to the parties? To the vendor, the surprising answer is, nothing at all. In the absence of special agreement to the contrary, the notary's fees and disbursements are paid by the purchaser; even if two notaries are instructed, one by each party, the purchaser normally pays both, but the amount of the fee is the same, and is divided between the two notaries in a manner laid down by their professional body. The expenses paid by the purchaser must be divided into two classes : the fees of the notary, corresponding to profit costs, and the timbre, droits d'enregistrement, and droits de publicite fonciere, corresponding to stamp duty, Land Reg– istry fees, and search fees. The heaviest burden is that of the droits d'enregistrement, for which the normal scale is 15 per cent of the purchase price; for dealings with private dwelling-houses, and various other favoured transactions, this reduced to 4.2 per cent of the price. The other disburse– ments are comparatively small. The notary's own fees are on a sliding scale : 4.5 per cent on the first 6,000 fr., 3 per cent on the next 14,000 fr., 1.5 per cent on the next 40,000 fr., and 0.75 per cent thereafter. If there is a mortgage involved also, the notary is entitled to a further fee on a slightly lower scale, varying from 3 per cent to 0.5 per cent of the loan. Two examples may make a comparison pos– sible; the first is the purchase of a dwelling- house at £3,000 with a mortgage of £2,000, on the assumption that the English title is not regis– tered at H.M. Land Registry; the second is the purchase of a dwelling house which is registered land at a price of £7,000 without a mortgage. Example 1 : Purchase for £3,000 (i.e., 40,500 fr. approx.) and mortgage for £3,000 (i.e., 27,000 fr. approx.).

d 0

s

£

d

s

£

52 10

Vendor's solicitor's scale fee Purchaser's scale fee on purchase ............ 52 10 solicitor's

0

scale

solicitor's

Purchaser's

0 0 0

0

......... 14

fee on mortgage

2 10 2 10

Stamp duty on mortgage ...

............

Search fees (say)

0

71 10

0

0

£124

France

d 0 0 0

s

£

Notary's fees on acte de vente Notary's fees on hypotheque ............ Timbre (duty on paper used) (say) ... Enregistrement, at 4.2 per cent on acte de vente Enregistrement, fixed rate on hypo theque .................................... Fees for publicite fonciere ............... .........

73 18

0

31

10

1

................................. 126

0

0

6 0

17

0

21

6

5

£254

Example 2 : Purchase for £7,000 (i.e., 94,500 fr. approx.) registered land. England £ s d £ s d Vendor's solicitor's scale fee 51 5 0 Purchaser's solicitor's scale fee ........................ 51 5 0 Stamp duty .................. 70 0 0 H.M. Land Registry fees ... 17 10 0 Searches (say) ............ 2 10 0 141 5 0

0

£192 10

France

d 0 0

s

£

......... 104

Notary's fee on acte de vente

0

Timbre

10

1

..............................

(say)

Enregistrement at 4.2 per cent ......... 294 0 0 Publicite fonciere ........................ 45 0 0 £444 10 0 Conclusion The conclusion which these examples suggest is that buying land in France is more expensive than in England, but that this is largely as a result of the extremely high rate of taxation represented by the droits d'enregistrement. The amount which 31