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Changes to French property law
New changes to French property law will affect overseas property buyers, writes Jo-ann Hodgson
Various changes to French property law, affecting renovation, inheritance and swimming pools will need to be taken into consideration by overseas buyers when looking to purchase French property.
A new law affecting the renovation of properties in France is due to come into force this month affecting insurance. "The British are fond of buying derelict properties in France with a view to 'doing them up', says Keith Baker from Croft Baker Solicitors.
"However, this may have to change with the new French property law which contains a requirement to obtain an insurance-backed ten year defects guarantee. My view is that if UK buyers do the repairs themselves they will not be able to supply guarantees of the work carried out and this could adversely impact on market value when they wish to sell the property.
"This in turn will have an adverse impact on the British buying such properties in the first place and ultimately trickle down to the value of properties bought with refurbishment in mind."
Whilst there is nothing to say that private owners cannot carry out the work it will have a commercial and legal impact as they will not be able to supply the insurance policy upon resale. "It is a narrow market for insurers to guarantee the renovation work which cannot be backdated and insurance companies are not scrambling over themselves to write this sort of business."
In future, overseas property buyers must take into account the cost of employing local craftsmen and builders who can supply the defects insurance. However, property prices could be reduced if owners have difficulty selling so the cost of this employment could be off-set by lower asking prices.
Other new French property laws cover the rights to inherit and safety regulations affecting swimming pools and septic tanks.
In France, the general rule when you die is that you can't disinherit your children who are entitled to a specified portion of your estate. This could be a stumbling block for a surviving spouse – but since January of this year children can waive their rights to their parents' estate.
Practical measures to protect a surviving owner include buying 'en tontine' – where the property passes automatically to the surviving co-owner – and for married couples, entering into a French matrimonial contract ensuring the surviving spouse inherits the property free from any rights of children. In this situation children would only inherit on the surviving spouse's death.
Overseas property purchasers buying a property with a swimming pool in France must now also make sure they ask for a safety certificate – or face a fine of 45,000 euros – and double-check that their septic tank has been upgraded to comply with new specifications as the work involved is costly.
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