GLOSSARY OF REAL ESTATE TERMS
A
Acte authentique de vente (Authenticated deed of sale)
A deed drawn up by a solicitor (notaire) or bailiff (huissier de justice) defining the rights and obligations of the contracting parties and formalising the real estate sale. Contrast this with a private agreement.
Achèvement de l'immeuble (Completion of construction)
A building is said to be completed when it can be lived in, even if some finishing work or minor developments remain to be done.
Appel de fonds (Call for funds)
These are the sums requested from co-owners by the Condominium Management Agent, to pay charges, to pay for work or to cover any other expenditure incurred for the upkeep of an apartment block or group of houses within a condominium.
Apport personnel (Personal contribution)
The sum provided by the purchaser to fund part of his/her purchase. The higher the personal contribution, the more advantageous the property loan conditions.
Avantage fiscal (Tax advantage)
Tax reduction or deduction from taxable income, as authorised by certain types of purchase (under the conditions of the “Besson” law) or allowed for certain work on the property. Ask your Tax Office for information.
Avenant (Rider)
An instrument appended to the initial contract in which the parties modify or complete the clauses in the initial contract.
B
Bail (Lease)
A lease is a contract for the rental or hire of premises under the terms of which one of the parties (the “lessor”) agrees to allow the other party (the “tenant” or “lessee”) peaceful, normal enjoyment of the property rented or hired for a fixed period in return at a fixed price called the “rent”.
Bien immobilier (Property)
An apartment block, house, business premises, commercial premises, land and, more generally, any asset which cannot be displaced.
C
Cadastre (Land Register)
A map listing all the property and land assets in a town and indicating their surface areas. It can be consulted at the Town Hall and it is used as a reference for the calculation of the land and property tax (“taxe foncière”).
Caution (Guarantee)
An instrument through which a third party makes a commitment to the creditor to pay a certain sum if the debtor fails to do so. In particular, a bank may require a guarantee to ensure the repayment of a mortgage or it may be requested by the owner of a property to guarantee the payment of rents if the tenants defaults on his/her financial obligation.
Compte d’Epargne Logement (“C.E.L.”, property savings account)
This is a savings account, with a pass book, which produces interest and entitles the holder to seek a loan at a special low rate.
Certificat de conformité (Certificate of Compliance)
An administrative document certifying that the work has been carried out in accordance with the building permit. It is issued by the Mayor or Prefect within 3 (three) months of filing the declaration of completion of work.
Certificat d'urbanisme (Town Planning Certificate)
An administrative document indicating whether or not a plot is considered as building land and whether it complies with all the town planning rules applicable to it.
Charges de copropriété (Condominium charges)
The term refers to all the costs incurred in the upkeep or repair of communal areas and to the operation of collective services and communal amenities within a jointly-owned condominium.
Conditions suspensives (Suspensive conditions)
Clauses in pre-sale contracts. The aim of a suspensive condition is to suspend the effects of a preliminary contract until the end of an unspecified period in the future. The most frequent clauses of this type relate to the obtaining of funding by the purchaser or to the non-exercise of a right of pre-emption by the town.
Contrat de réservation (Contract of Reservation)
Also known as a “Preliminary Contract”. Under the terms of this agreement, a vendor undertakes to reserve for the purchaser all or some of the future construction. In return, the purchaser deposits a sum in the form of a guarantee.
Contrat de vente (Deed of Sale)
A contract under the terms of which one of the parties, the vendor, transfers ownership of property and undertakes to provide it to the other party, known as the “purchaser”, who shall pay the price in cash.
Copropriété (Condominium)
The division of ownership of an existing apartment block or group of constructions between several people in the form of lots, with each lot including a private area (apartment, cellar etc.) and a percentage of the communal areas (staircase, lift, courtyard, garden etc.). Condominium ownership is subject to a set of Condominium Administrative Rules.
Crédit d'impôt (Tax credit)
A tax advantage in the form of a tax reduction granted in certain circumstances, as defined by the current year’s State budget.
Crédit immobilier (Mortgage or property loan)
A sum granted by a financial institution to fund the purchase of real estate.
D
Déclaration d'achèvement des travaux (Declaration of Completion of Work)
This is a mandatory declaration that the holder of a building permit must fill in within 30 (thirty) days following the completion of work. The declaration must be filed in triplicate at the Town Hall of the village, town or city in which the construction is located.
Délai de réflexion (Cooling-off period)
Where mortgages are concerned, this is the period given to the borrower before he/she can accept the loan being offered. In practice, this means that a borrower has to wait for 10 (ten) days before agreeing to the mortgage, which leaves time to consider it fully. The time limit runs from the date of receipt of the mortgage offer.
Délai de rétractation (Retraction period)
A 7-day (seven-day) period during which the purchasers of new property can cancel the contract (Article 20 of the law of 31st December 1989, the “Neiertz” law). Such retraction can only apply to contracts reserving apartments, construction contracts for private houses, and, more generally, any preliminary private contract referring to the purchase of a new property. The time limit runs from the date of the purchaser’s receipt of the contract.
Devis (Estimate)
A detailed estimate of the work required and/or service to be provided, with the corresponding costs. An estimate drawn up by a company or service provider is submitted to the client for approval.
Droit de préemption (Right of pre-emption)
A priority right of purchase enabling a private individual or public agency to purchase a piece of real estate at the price and under the conditions laid down when placed on the market by its owner, with preference over any other purchaser.
Droits de mutation (Transfer tax)
During a real estate transaction, all the taxes and duties received by the solicitor on behalf of the State and local authorities. This tax forms part of the legal expenses.
Droits d'enregistrement (Registration fees)
A tax levied when a deed referring to the transfer of property or real estate rights is registered i.e. when there is a change of ownership for the property either for valuable consideration (particularly through a sale) or free of charge (donation or legacy).
E
Echéancier (Timetable)
A mandatory document issued when a loan is granted, indicating the exact amount of each instalment, the dates on which they are due and the total duration of the loan.
Emoluments notariés (Solicitor’s emoluments)
The fees paid to a solicitor for each deed drawn up and signed. His/her remuneration consists of fixed or proportional emoluments, which may or may not be subject to an official tariff (if not subject to such a tariff, they are agreed between the solicitor and the client).
Epargne Logement (Property savings)
A property savings plan has two phases: firstly a period of saving (the account holder pays money into an account (called “Plan d’Epargne Logement” (PEL) or “Compte d’Epargne Logement” (CEL)) and receives interest on it. There is then a phase during which a loan may be granted on a pro rata basis, depending on the amount already saved.
Etat des lieux (Property Inventory)
A document describing the condition of a property and its constituent parts. It must be drawn up by the tenant and owner when the tenant takes possession of the property. It can also be drawn up by a bailiff (a “huissier de justice”). The document, which is signed by both parties, constitutes proof of the obligations incumbent upon lessor and tenant respectively as regards payment of repairs by one or other party.
F
Frais de notaire (Legal fees)
The expenses payable by the purchaser of a property. These expenses correspond to approximately 8% of the sale price of an existing property and approximately 3% of the sale price of new real estate. The expenses include taxes (mainly the “property publication tax” or “taxe de publicité foncière”), the solicitor’s emolument (his/her remuneration), miscellaneous expenditure and the cost of formalities.
G
Garantie d’achèvement ou de bonne fin (Guarantee of completion)
A mandatory guarantee (also known as a “refund guarantee”, or “garantie de remboursement”) binding upon the builder. It guarantees the purchasers of a property off the plan that their payments will be refunded if the construction is not completed. This guarantee may be "extrinsic" or "intrinsic".
Garantie décennale (Ten-year guarantee)
A mandatory guarantee binding upon all parties to the construction. It covers building defects that compromise the solidity of the building or render it unfit for the purpose for which it was built. The guarantee has a 10-year lifespan as of the date on which the property was accepted by the purchaser.
H
Habitation principale (Main residence)
The property that you occupy on a permanent basis (i.e. at least 8 months a year) and, by extension, the property that constitutes your address for taxation purposes, as opposed to a holiday home.
Hypothèque (Mortgage)
An entitlement encumbering a property, signed to the benefit of a creditor, to guarantee the payment of a debt contracted. The property is used as collateral. This guarantee entitles the bank to resell the property that you have purchased if you are unable to pay your monthly instalments.
I
Impôt foncier (Property ownership tax)
A tax payable by all owners of property. Also referred to the “taxe foncière”, the amount varies depending on the location and surface area of the property.
Impôts locaux (Local taxes)
Taxes levied not by central government but by regional, county and local authorities. They include the “taxe foncière” on buildings, the “taxe foncière” on vacant land, rates (“taxe d'habitation”) and a local business tax (“taxe professionnelle”).
Indice du coût de la construction (Construction price index)
A figure calculated quarterly by the Institut National de la Statistique et des Etudes Economiques (INSEE) and published in France’s Official Journal (“Journal official”). For rental properties, the index is used as the basis for a review of the rent on the anniversary of the signature of the rental agreement each year.
Inscription hypothécaire (Mortgages Register Entry)
A formality specific to mortgages and property collateral. It requires the filing of a form, in duplicate, at the Mortgages Register.
M
Maître d'œuvre (Project manager)
Person or company (architect, builder, engineer etc.) commissioned by the client to monitor, oversee or carry out the construction of a building.
Maître de l’ouvrage (Client)
A person or company for whom a property is being built. The client funds the operation and selects a project manager.
Millième (Thousandth)
In condominiums, the thousandths represent the portion of communal areas included in each lot. The number of thousandths is indicated in the Condominium Administrative Rules and is used to calculate the number of votes to which each co-owner is entitled. It is also used to calculate the percentage of each co-owner’s contribution to expenditure incurred for the upkeep of the property.
N
Notaire (Solicitor)
A licensed, public official responsible for authenticating certain deeds and documents and advising private individuals.
P
Parties communes (Communal areas)
The areas of property, land or buildings used by all or some of the co-owners and occupiers e.g. staircase, courtyard, garden and access roads.
Partie privative (Private area)
The areas of buildings or land reserved solely for the use of one particular co-owner.
Partie commune à jouissance privative (Communal area for private use)
Areas of land or buildings allocated for use by all the co-owners but of which a single co-owner has sole enjoyment. This is often the case when there is a rooftop patio or a garden adjacent to an apartment on the ground floor.
Plan d'Epargne Logement (P.E.L, property savings plan)
A savings plan opened with a view to purchasing property. A property savings plan has two phases: firstly a period of saving followed by a loan at a special low rate. The amount of money loaned depends on the amount of money already saved.
Permis de construire (Building permit)
An administrative authorisation issued with a view to a construction and related work. The main aim of the permit is to ensure that the building will comply with the current town planning regulations and building regulations.
Prêt conventionné (Loan at an agreed rate)
A loan granted without any conditions as regards income. It can fund up to 90% of your property purchase. It also entitles the holder to apply for further assistance in the form of the APL (Aide Personnalisée au Logement). The PAS (Prêt d'Accession Sociale, property loan for low-income families) in one type of “Prêt Conventionné” but is subject to conditions relating to income.
Prêt à taux zéro (Zero-rated loan)
An interest-free property loan granted subject to certain conditions relating to income. The loan cannot exceed a ceiling based on the number of people in the family and the place of residence.
Prêt amortissable (Amortisable loan)
Most bank loans are amortisable. Unlike interest-only loans, the capital is repaid over time rather than repaid in a single lump sum payment. During the life of the loan, the lender repays both the capital and the interest.
Prêt in fine (Interest-only loan)
Contrary to the amortisable loan, this is a loan on which you repay only the interest during the life of the loan. The capital is not amortised but is repaid in a single lump sum payment when the loan reaches maturity.
Prêt 1 % logement (1% property loan)
An additional property loan reserved for the staff of private corporations with more than 10 (ten) staff, paying into the 1% corporate staff loan fund. This loan is particularly worthwhile for future borrowers since it is granted without regard for income and the interest rates offered stand at around 1.5%. The loan can only be used to fund the purchase of the borrower’s main place of residence.
R
Règlement de copropriété (Condominium Administrative Rules)
A written document that must be drafted for all condominium property. Its aim is to establish the purpose of both private and communal areas, to define the conditions of enjoyment of these areas and to indicate the rules relating to the administration of the communal areas. It lays down the rights and obligations of the co-owners and the operating rules for the condominium.
Revenus fonciers (Income from property)
This revenue is produced by the rental of all types of property, whether in the form of buildings or vacant land (housing, shops, offices, production plants, stores, garages, storage units, land etc.).
S
Société Civile Immobilière (S.C.I, property company)
This is a civil company formed for the purposes of the management, sale or construction of real estate.
Surface Hors Oeuvre Brute (S.H.O.B, Gross floor area)
The sum of all the floor areas on each level of the building, including attics and basements, balconies, loggias and roof terraces.
Surface Hors Oeuvre Nette (S.H.O.N, Net floor area)
The net floor area of a building is equal to the S.H.O.B. less the surface areas of premises and subsidiary constructions as listed in law e.g. attics and basements not suitable for conversion, roof terraces, balconies and loggias.
Syndic de copropriété (Condominium Administrative Agent)
The representative of the condominium owners’ association. The Condominium Administrative Agent implements the decisions made at a general meeting and administers the property on a day-to-day basis in the name of the association.
Syndicat de copropriétaire (Condominium owners’ association)
All the owners within a condominium. The association is responsible for maintaining the property in good condition, defending it and administering the communal areas.
T
Taux d'intérêt (Interest rates)
The rate of remuneration of a loan (i.e. the amount that your loan costs you). Interest rates can be fixed or variable.
Taux fixe (Fixed rate)
The rate is fixed when the contract is signed and remains constant throughout the duration of the loan.
Taux revisable, Taux variable (Variable rate)
The interest rate is not fixed when the contract is signed but rises or falls depending on changes in a baseline index, usually the Euribor.
Taux révisable capé (Capped variable rate)
A variable-rate loan with an interest rate that cannot exceed a ceiling, or cap, laid down at the beginning of the loan.
Taux Effectif Global (T.E.G, Annual percentage rate)
This rate includes all the expenses linked to credit i.e. interest rates, bank commissions, life insurance and miscellaneous expenses. It is this rate which measures the real cost of a loan and enables borrowers to compare the various loan offers available. By law, this figure must be indicated on a loan offer.
U
Urbanisme (Town planning)
All the legal measures and actual operations involved in the organisation and layout of every aspect of urban communities i.e. cities, towns, villages etc.
V
Vacant
Describes a property that is not occupied.
Valeur locative (Rental value)
This is the amount for which a property could be rented, given market conditions. This sum is used as the basis for the calculation of certain taxes (“taxes d'habitation” and “taxe foncière”).
Vice caché (Hidden defect)
A hidden defect is one that cannot be seen when the property (i.e. an object or real estate) is carefully inspected without having recourse to the services of an expert.
