Withdrawal period

You've accepted an offer on your home, but instead of celebrating like most sellers, you're starting to feel some serious regrets. Despite having confidence in your decision to sell before, your deep love for this home — or perhaps a sudden change in circumstances — made you question everything. In this article, we explain under what circumstances a seller can benefit from a withdrawal period. You should know that regardless of the clauses included in the document, you have 14 days to freely review your decision, without having to provide explanations.

The withdrawal period is established by law. This also applies to buyers and sellers. It starts the day after the notification of the promise of sale by a notary or by registered letter with acknowledgement of receipt.

Withdrawal period - The contract includes a review period

As of August 8, 2015, buyers of residential real estate in France will have 10 days after signing the initial purchase contract to withdraw from their purchase without penalty. The withdrawal period, established to offer the buyer a sufficient period of reflection, only applies to non-professional buyers. Previously, the delay was 7 days. The change was part of the Macron law, which was passed on July 10, 2015.

The 10 days are counted from the day after the preliminary agreement was signed, or the day after the signed agreement was received if the buyer was not present when the preliminary agreement was signed. This is common for international buyers who sign through a power of attorney — by proxy. For them, the withdrawal period starts from the day after receiving the agreement issued to them in their country of origin. Thus, their withdrawal period can finally extend up to 2 weeks after signature.

Whether or not they are present at the signature, the notification of withdrawal must be sent by registered letter with acknowledgement of receipt. If the withdrawal period expires on a weekend or a public holiday, the period is extended until the next working day.

There are two types of preliminary agreements that can be signed between the buyer and the seller. A promise to sell binds the seller to sell, but allows the buyer to cancel the transaction for any reason. If he does so after the expiry of the withdrawal period, he will have to pay the seller 10% of the value of the property as compensation.

A sales agreement is a promise not only to sell but also to buy. The seller can accept the 10% compensation but, if he wishes, can instead sue for forced execution requiring the buyer to keep his promise to purchase. This is not always practical, so in this respect, both usually have the same result.

For the seller, the withdrawal period adds uncertainty. The initial agreement is usually signed weeks after the buyer's offer is accepted, and by that time the buyer is generally fairly certain about the purchase. While the addition of three more days doesn't bring much to the buyer, it does set the seller back an additional period of time if the buyer decides to pull out.

The Macron project initially proposed to double the deadline, from 7 to 14 days, but the outcry of real estate brokers and agents cut the proposed extension by four days.

Other changes made by the Macron law concerning real estate include the requirement for all residential homes in France to be equipped with a smoke detector. The application of this law was postponed to January 1, 2016 because manufacturers, while certainly in favor of change, are struggling to meet the surge in demand and to equip the several million households in the country.

Another change made by the law is to limit the right of citizens to request the demolition of a building if it was not built in accordance with the building permit. Developers say that abusive demolition requests over the years have led to a slowdown in the construction of new homes. In the future, demolition requests will only be considered for illegal constructions on floodplains, heritage sites or national parks.

The right to a cooling-off period results from article L 271-1 of the Construction and Housing Code. This is a window for the buyer to opt out of the purchase process, which was previously 7 days.

The withdrawal period starts from the day after receipt of the duly signed contract by registered mail. When you receive your copy of the contract, be sure to sign and write the day of receipt on the pink slip attached to the envelope, and return it to your notary or to the agent who handles the purchase process. Note that if you live in France, the withdrawal period starts from the day after the “presentation” of the acknowledgement of receipt. This means that even if you don't get the delivery, 10 days run.

Note that if the notary personally delivers the entire contract to the purchaser once it is signed, this avoids problems of presentation or receipt, and the withdrawal period of 10 days from the next day. Legal fees are called “notary fees” and are generally around 7% of the net sales price and include stamp duty. You can easily estimate notary fees using our handy legal fees calculator.

How the withdrawal period process works

The right of withdrawal is exercised by registered letter with signature or by any other means offering equivalent guarantees to determine the date of receipt or delivery (bailiff's act for example).

The period of ten days runs: from the day after the first presentation of the registered letter with acknowledgement of receipt notifying the purchaser of the act, when the compromise has been signed privately to the day after the contract was handed over to the purchaser, provided that all mandatory documents have been provided, in particular in the case of a co-owned lot.

If all the mandatory documents have not been provided to the buyer, the withdrawal period for the latter can only start from the day after the communication of all the required documents. Attention, if the tenth day of the withdrawal period falls on a Saturday, Sunday or a public holiday, the end of the withdrawal period is postponed to the first following working day

The consequences of the withdrawal period

Once you have decided to apply your withdrawal period, this cancels the sale. During the withdrawal period, you do not have to pay any money directly to the seller. However, if you paid a deposit when signing the contract through a third party authorized to sell (notary...), it will be returned to you without any penalty within 21 days from the day after the day after the date on which you decided to withdraw.