The unilateral promise of sale (promesse unilaterale de vente, or PUV) is a preliminary contract by which the seller irrevocably commits to selling their property to a buyer (the “beneficiary”), who has a set period to decide whether or not to exercise the purchase option. In return for this reservation, the buyer pays an immobilisation indemnity of 5 to 10% of the sale price, held by the notaire. In Paris, the unilateral promise is used in approximately 20 to 30% of transactions, primarily for prestige properties and purchases requiring additional deliberation time.
The distinction between the unilateral promise and the compromis de vente (preliminary sales agreement) is often poorly understood by buyers. It is however decisive: in a compromis, both parties are committed; in a unilateral promise, only the seller is bound. The buyer retains the freedom to withdraw, but forfeits the immobilisation indemnity if they do so outside the scope of contingency clauses.
Contents
- Unilateral promise vs compromis: the key differences
- The immobilisation indemnity in detail
- The option period: how it works
- Contingency clauses in the promise
- When to choose the promise over the compromis
Unilateral promise vs compromis: the key differences
The compromis de vente and the unilateral promise are the two forms of preliminary contract in French property law. They pursue the same objective, securing the transaction before the final deed, but their legal mechanisms are radically different.
The parties’ commitment
In the compromis (synallagmatic promise), both seller and buyer are committed. The compromis “constitutes a sale” within the meaning of Article 1589 of the Civil Code: if one party refuses to sign the deed, the other can compel them to do so through the courts.
In the unilateral promise, only the seller is committed. The buyer has an option: they can decide to buy (exercise the option) or withdraw (not exercise the option). If the buyer withdraws, they lose the immobilisation indemnity but cannot be compelled to purchase.
The guarantee deposit
The compromis provides for an escrow deposit of 5 to 10% of the price, held by the notaire. This escrow is an advance on the sale price, returned if a contingency clause is not fulfilled.
The promise provides for an immobilisation indemnity of 5 to 10% of the price. This indemnity compensates the seller for immobilising the property during the option period. If the buyer exercises the option, it is applied toward the sale price. If they do not, it is forfeited to the seller, unless the non-exercise results from an unfulfilled contingency clause.
Formalities
The compromis can be signed as a private agreement (between the parties) or in authentic form (at the notaire). The unilateral promise must be registered with the tax office within 10 days of signing if it is a private agreement, on penalty of nullity. This registration requirement explains why, in Paris, virtually all unilateral promises are signed directly at the notaire’s office.
The immobilisation indemnity in detail
The immobilisation indemnity is the price of the buyer’s freedom. Its amount and the conditions under which it is triggered must be clearly defined.
Usual amount
In Paris, the immobilisation indemnity is typically between 5 and 10% of the sale price. For a property at 800,000 euros, the indemnity will be 40,000 to 80,000 euros. The percentage is negotiated between the parties. The longer the option period, the more the indemnity tends toward the upper range: the seller is immobilising the property for longer and demands higher compensation.
Escrow and payment
The indemnity is held by the notaire at the time the promise is signed. It is not paid directly to the seller. In the event of option exercise, it is applied toward the sale price. In the event of non-exercise outside contingency clauses, the notaire pays it to the seller after the challenge period.
Cases of restitution
The indemnity is returned to the buyer in two cases: if a contingency clause is not fulfilled (mortgage refusal, exercise of pre-emption right, etc.) or if the buyer exercises their cooling-off right within the 10 days following notification of the promise. Outside these cases, loss of the indemnity is the automatic consequence of not exercising the option.
The option period: how it works
The option period is the time during which the buyer can decide whether to purchase. It is the heart of the unilateral promise.
Duration of the period
The option period is freely set by the parties. In Paris, it is generally 2 to 4 months, aligned with the standard timeline for obtaining a mortgage and fulfilling contingency clauses. A period of 3 months is the most common.
Exercising the option
Exercising the option means confirming the intention to buy. The buyer sends the seller (or the notaire) a registered letter with acknowledgement of receipt or a document served by a bailiff declaring the exercise of their purchase option. This exercise transforms the promise into a firm sale. The seller cannot withdraw from their commitment.
Expiry without exercise
If the option period expires without the buyer having exercised, the promise lapses. The seller regains the freedom to sell to a third party. The immobilisation indemnity is forfeited to the seller, unless contingency clauses remain unfulfilled.
Contingency clauses in the promise
As in a compromis, the unilateral promise can contain contingency clauses that protect the buyer.
Standard contingency clauses
The most frequent clauses are obtaining a mortgage (specifying amount, maximum rate and term), the absence of pre-emption by the municipality, the absence of undeclared easements or charges, and satisfactory technical survey results. For a deeper look at this subject, see our dedicated article on contingency clauses in the preliminary agreement, whose principles also apply to the promise.
Contingency clauses and the immobilisation indemnity
If a contingency clause is not fulfilled within the allotted time, the buyer recovers the full immobilisation indemnity. The seller cannot retain it. This is why the precise drafting of contingency clauses is as critical in a promise as in a compromis.
When to choose the promise over the compromis
The choice between promise and compromis depends on the buyer’s situation and the transaction context.
Cases favouring the promise
The unilateral promise is appropriate when the buyer needs time to secure financing or finalise a complex arrangement (SCI company, usufruct structure). It also suits buyers who are considering several properties and wish to secure one without a firm commitment. For prestige property purchases in arrondissements such as the 1st or the 8th, the promise offers valued flexibility.
Cases favouring the compromis
The compromis is preferable when both parties are certain of their commitment and want the security of a mutual obligation. It is also simpler to implement and does not require tax registration, making it faster to sign.
The role of the property hunter
Our property hunters systematically advise our clients on the choice of preliminary contract based on their situation. In the majority of Paris transactions, the compromis remains the standard option. The promise is recommended when the complexity of the financial arrangement or the nature of the property (prestige, buy-to-let investment) justifies additional flexibility.
FAQ
What is the difference between the escrow deposit of a compromis and the immobilisation indemnity of a promise?
The escrow deposit of a compromis (5 to 10% of the price) is a guarantee deposit returned if a contingency clause is not fulfilled. The immobilisation indemnity of the promise (5 to 10% of the price) is the price of the option: it is forfeited if the buyer withdraws without invoking a contingency clause. The difference is fundamental: the escrow is a deposit on account, the indemnity is a counterpart.
Must the unilateral promise of sale be signed at the notaire?
Since the 2016 reform, a unilateral promise of sale for property with a duration exceeding 18 months must be notarised. For shorter durations, it can be a private agreement, but registration with the tax office within 10 days is mandatory, on penalty of nullity. In Paris, signing at the notaire is strongly recommended in all cases.
Can the option be exercised before the end of the agreed period?
Yes, the beneficiary can exercise the option at any time during the promise period. Early exercise transforms the promise into a firm and final sale. The seller cannot object since they have unilaterally committed to sell.
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Frequently asked questions
What is the difference between the escrow deposit of a compromis and the immobilisation indemnity of a promise?
The escrow deposit of a compromis (5 to 10% of the price) is a guarantee deposit returned if a contingency clause is not fulfilled. The immobilisation indemnity of the promise (5 to 10% of the price) is the price of the option: it is forfeited if the buyer withdraws without invoking a contingency clause. The difference is fundamental: the escrow is a deposit on account, the indemnity is a counterpart.
Must the unilateral promise of sale be signed at the notaire?
Since the 2016 reform, a unilateral promise of sale for property with a duration exceeding 18 months must be notarised. For shorter durations, it can be a private agreement, but registration with the tax office within 10 days is mandatory, on penalty of nullity. In Paris, signing at the notaire is strongly recommended in all cases.
Can the option be exercised before the end of the agreed period?
Yes, the beneficiary can exercise the option at any time during the promise period. Early exercise transforms the promise into a firm and final sale. The seller cannot object since they have unilaterally committed to sell.
