Property auctions in France: rules and deadlines

Where properties sold at court come from

A court sale is the most common outcome of a saisie immobilière (property repossession). The creditor holding an enforceable title has a formal demand for payment served, which constitutes the seizure; at the audience d’orientation (directions hearing), the juge de l’exécution (enforcement judge) decides whether to authorise a private sale or to order a forced sale (vente forcée) (service-public.gouv.fr). The judge then sets the audience d’adjudication (auction hearing) within 2 to 4 months (service-public.gouv.fr).

Before the hearing, the sale is advertised (legal notices newspapers, a notice posted outside the property) and the judge sets the rules for viewings. It is the creditor who sets the reserve price (mise à prix); if no bid is made, the creditor is declared the successful bidder at that amount (service-public.gouv.fr).

Bidding at court: lawyer and guarantee

“Bids are made through a lawyer registered with the bar of the tribunal judiciaire before which the sale is being conducted. The lawyer may hold only one mandate” (CPCE — code des procédures civiles d’exécution, Code of Civil Enforcement Procedures — art. R322-40). You therefore cannot bid yourself. Those who may not bid include the debtor whose property has been seized, the officers of the court involved in the proceedings and the judges of the court (art. R322-39).

Before bidding, the lawyer obtains from you an irrevocable bank guarantee or a banker’s draft, payable to the escrow holder or to the Caisse des dépôts et consignations (the state deposit institution) as specified in the cahier des conditions de vente (conditions of sale), representing 10% of the reserve price, and which may not be less than €3,000 (art. R322-41). This sum is returned as soon as the hearing ends if you are not the successful bidder; if the successful bidder defaults, it goes to the creditors (art. R322-41).

Calculation: 10% of the reserve price, with a minimum of €3,000 (art. R322-41).

After the award: overbid, price and costs

The one-tenth overbid. “Any person may make an overbid of at least one tenth of the principal price of the sale” (art. R322-50). It is lodged by a lawyer’s instrument and filed with the enforcement judge’s registry within ten days of the award, failing which it is inadmissible (art. R322-51). The judge sets a new hearing 2 to 4 months later; bidding resumes at the amount of the overbid and, if there is no higher bid, the overbidder is declared the successful bidder (service-public.gouv.fr).

Paying the price. The price is paid to the escrow holder or deposited with the Caisse des dépôts within 2 months of the final award (art. R322-56).

The costs. The costs of the sale are borne by the successful bidder, on top of the price (art. R322-58; service-public.gouv.fr).

The occupant. The award judgment serves as an eviction order against the debtor; if the property is occupied by someone else, the successful bidder may have them evicted, unless the conditions of sale provide for them to remain in the property (service-public.gouv.fr). So read the conditions of sale before bidding.

Notarial auctions

Notaries organise “candle” auctions (à la bougie), which are either amicable (voluntary) or court-originated (Notaires de France). Their rules differ significantly:

• no lawyer required: “You do not need to be represented by either a lawyer or a notary” (Notaires de France);
• deposit of 20% of the reserve price, by banker’s draft or certified cheque, an amount stated in all advertising;
• reserve price set with “a minimum discount of 30% on the market value of the property”;
• overbid of at least 10% within 10 days, open to anyone except the successful bidder;
• payment of the price within 45 days, plus any overbid period; after that, late-payment interest accrues.

Notaries advise you to consult the cahier des charges (specifications) available at the notary’s office and to attend the viewings organised before the sale (Notaires de France).

Which professional to consult

For a court sale, a lawyer registered with the bar of the tribunal judiciaire is essential to place bids. For a notarial sale, the notaire (notary) in charge of the sale holds the specifications and organises the viewings. Have the property valued by an agent immobilier (estate agent) before setting your maximum bid, and have your financing approved by a courtier en crédit (mortgage broker) before the hearing: the price is due within 2 months (art. R322-56) or 45 days (Notaires de France).