At each election where the extremes risk passing, we are told about this clause again», laughs one real estate agent experienced who is often used to being contacted by his clients. What about? Cancel a sale if one of the extreme parties win an election. This type of request is starting to flourish but few people agree to talk about it openly. A Lyon notary took part in the exercise.
“A customer, who agreed on the price with the seller, told us that if the New Popular Front (NFP) passed, he wanted to retract, as in 1981 with François Mitterrand (who won the presidential election, Editor’s note). To this end, he asked us if he could include, in the promise of sale, a clause canceling the transaction if the New Popular Front wins the elections.», tells the Figaro Me Martin Bretagne, notary in Givors, near Lyon. Pending the results of the second round, on July 7, the sale was put on “stand-by”. A sign of a wait-and-see attitude and fears linked to political instability,
This clause, surprising to say the least, is the subject of debate among notaries. “Should we give in to every fanciful whim of customers?», asks one of them. “Overvaluing furniture in a kitchen from the 90s is one. Anticipating the risk of being hit with taxes or waiting years to recover your squatted home, I don’t think so», replies Me Bretagne, notary for 17 years. The risk of seeing the New Popular Front Described by the owners as an “anti-landlord” party, coming to power makes buyers think: maintain the project, insert a suspensive clause or leave France. “Italy is popular at the moment with the French who want security”confides Frank Sylvaire, associate director of Paris Ouest Sotheby’s Realty, who fears the “worst crisis since Hollande’s election in 2012“.
What does the seller think?
Is this clause legal? “To be legal, a suspensive condition must not be potestative (article 1195 of the civil code )that is, its achievement must not depend entirely on the action or negligence of either party», replies Me Bretagne. This is the case of the famous suspensive clause for obtaining credit, which allows the buyer to cancel a real estate sale if he does not obtain a loan from his bank but also a political election. The seller must still accept this condition! Nothing is less certain, especially if the buyer combines the two clauses mentioned above.
In a context where credit rates, despite their decline, remain high suspensive clauses are rarely viewed favorably by sellers. A sign that tension in the real estate market is strong. “A seller often prefers to sign with a buyer who offers him a price that is certainly lower but without any clause, particularly credit.», underlines Olivier Clermont, notary in Paris. It is not the political instability in France which risks improving the situation. Some brokers fear a rise in credit rates if the extremes win.