Moving in before the deed of sale in France: the risks

The rule: ownership and keys on signing

The buyer becomes the owner on signing the deed of sale (service-public.gouv.fr, F2962). Until then, the seller remains the owner, with all that this implies: they remain insured as owner (F37190) and they owe the taxe foncière (property tax) if they were the owner on 1 January (F59).

The obligation to deliver a building “is fulfilled by the seller when they have handed over the keys, in the case of a building, or when they have handed over the title deeds” (Civil Code, art. 1605) (our translation). Service-public.gouv.fr describes the usual order: the keys are given to you after the signing of the final deed (F37190). The complete timetable is in les étapes de la vente immobilière (the steps of a property sale).

Moving in early is therefore a negotiated exception, not a right of the buyer.

The precarious occupancy agreement

ANIL defines it as the contract by which the parties grant the occupier only a precarious right of enjoyment, in return for a modest financial consideration. “As no specific text governs it”, case law accepts it on two conditions:

• the precariousness must rest on particular circumstances, independent of the will of the parties alone, which exist at the time of signing;
• the agreement must not be used to circumvent the Act of 6 July 1989 on residential leases.

Without an objective cause of precariousness, the court requalifies it as a lease (Cass. civ. III, 29 June 1994, cited by ANIL), with the protection a tenant enjoys.

The buyer’s case. In the judgment of 31 January 2012, a seller had authorised their future buyer to occupy the house while waiting for the deed, in return for a payment provided for in the compromis (preliminary sale contract). The sale depended on obtaining a loan. For the Cour de cassation, this condition precedent is an objective cause of precariousness: the occupier could not claim a lease governed by the 1989 Act (ANIL).

In that case, the authorisation was included in the compromis. ANIL points out that such an agreement is characterised by a term “whose end is marked by a cause other than the will of the parties alone” (Cass. civ. III, 19 November 2003): here, the signing of the deed or the failure of the condition. See compromis ou promesse de vente (preliminary sale contract or promise to sell).

The occupancy payment

Precarious occupation does not rule out a consideration, but the modest level of the payment is a characteristic indication of this classification (Cass. civ. 3e, 29 June 1994, cited by ANIL). A payment set by mutual agreement cannot be changed by the court (Cass. civ. III, 12 June 1985, cited by ANIL).

Points to put in writing in the agreement:

Insurance and liability

The seller’s home insurance contract is automatically transferred to the buyer only at the time of the sale (service-public.gouv.fr, F37190). Before the deed, the seller remains the insured party as owner.

The occupier, for their part, is not a third party free of liability: the Cour de cassation holds that in the event of fire, the precarious occupier is presumed liable (Cass. civ. III, 23 January 2008, cited by ANIL). It is therefore in their interest to insure their liability as occupier from the moment the keys are handed over, and in the seller’s interest to inform their own insurer of the occupation. Our guide assurance habitation (home insurance) details the cover.

If the sale falls through

This is the scenario the agreement must provide for. In the judgment of 31 January 2012, the buyer had not obtained their loan nor shown that they had applied for it; the notary drew up a procès-verbal de difficultés (formal record of disagreement) and the seller sued the buyer for eviction and an occupancy payment. The Cour de cassation held that the precarious occupancy agreement had ceased to have effect on the day of the record; the payment due afterwards could therefore no longer be the one agreed in the compromis (ANIL).

Consequences for the buyer:

• they must leave the premises; if they stay, they face eviction proceedings and a payment set by the court;
• works carried out in a home that still belongs to the seller raise the question of their reimbursement: the agreement must settle it in writing;
• what happens to the sum paid under the compromis depends on the conditions precedent: see condition suspensive de prêt (mortgage condition precedent).

For the seller, the risk is court proceedings if the occupier refuses to leave, as in the 2012 case.

Which professional to consult

The notaire (notary) drafts the occupancy agreement, attaches it to the compromis and draws up the formal record if the sale does not go ahead. The agent immobilier (estate agent) who negotiated the sale can arrange the move-in inventory of condition. The courtier en crédit (mortgage broker) helps you obtain the loan within the period of the condition precedent, the only way to turn precarious occupation into ownership.