Can the town hall buy a property at the price that suits it? Here is what the law says regarding expropriation
Between the drafting of a compromise or a promise to sell a home and the signing of the authentic deed of sale with the notary, between three and five months pass. This length of time is largely due to right of first refusal agreement by article L 210 of the town planning code to local authorities, in particular municipalities.
Indeed, when the municipality has established the urban right of first refusal, its official name, on all or part of its territory, it has during each real estate sale the privilege of acquiring the housing as a priority, by seeking out the prospective buyer.
The legislator established the right of urban pre-emption in order to help cities implement, in the general interest, their town planning and development operations. They may need to appropriate land or private buildings to create community facilities, schools, gymnasiums, create or maintain economic activities; fight against unsanitary conditions by buying dilapidated residential buildings to rebuild or renovate them…
Preemption is not spoliation, says the Court of Cassation
Exceptions to the right of first refusal
Are not subject to the urban right of first refusal, family transfers of real estate by donation, donation-sharing, succession, inheritance as well as transfers of share of joint ownership between co-owners.
Shares in SCI, a real estate company, are preemptable, except when transfers of shares take place between members of the same family up to and including the fourth degree.
Preemption, instructions for use
You have decided to sell a property. After signing the compromise or the promise of sale, if the accommodation is located in a pre-emption zone, the notary sends the municipality a Declaration of intention to alienatethe DIA which describes the accommodation put up for sale, indicates its price and mentions the conditions of the sale.
The municipality then has two months to express its decision. Its silence means that it renounces implementing the right of pre-emption leaving the field open to the sale: the seller and the buyer can then conclude the sale at the price indicated in the declaration of intention to sell, therefore in the compromise or the promise of sale.
For the seller, things become complicated if, before the end of the two-month period, the municipality decides to initiate a pre-emption procedure. In this case, it ousts the prospective buyer and takes its place as buyer of the accommodation at another price, generally much lower than that stated in the compromise or promise of sale.
The decision to preempt must be justified; it falls within the competence of the Municipal Council, which can delegate its power to the mayor of the municipality. It is wise to check that the mayor actually holds this delegation of power established by the Municipal Council in his favor.
If the price shown on the DIA exceeds the sum of 180,000 euros excluding taxes and duties, the municipality is required to request, in the following month, the opinion of the Estates department so that it can give its estimate of the price of the real estate subject to the preemption. This real estate valuation is not binding on the municipality which can offer a much lower price.
The municipality notifies its decision to the seller in the form of a decree, indicating the reason for the preemption, the price at which it has decided to acquire the property, and the terms of payment. The owner can refuse to sell his property and the matter remains there. He can also accept the municipality’s offer or express his disagreement within two months. If he does not respond, he is deemed to have given up selling.
It is important to inform the prospective buyer of the municipality’s pre-emption decision in order to be released from your commitment to sell them your property and so that they can suspend their project with their partners (the bank in particular for credit real estate or even borrower insurance in particular) while waiting to find other accommodation to acquire.
Late payment deadlines
Late payment of the price constitutes a recurring problem faced by sellers whose property is foreclosed. However, the law is clear.
Article L213-14 of the Town Planning Code states that the purchase price is paid by the municipality to the seller within four months following the decision to acquire the property. In the event of non-compliance with this deadline, the seller can freely sell his property.
Discuss the price proposed by the town hall
How to react to a municipality which has decided via the right of first refusal to acquire your property at a price significantly lower than that agreed between you and the prospective buyer?
If the owner whose property is foreclosed objects to the proposed price and maintains his own, he must inform the town hall by registered letter with acknowledgment of receipt. Do not forget to attach a copy of the municipal decree which notified you of the pre-emption decision. The municipality then has a period of fifteen days to refer the matter to the expropriation judge in order toobtain judicial fixing of the price. If she lets this deadline pass without reacting, this means that she gives up her project, and lets the seller sell her property at the initial price.
At the latest within three months following the date of referral to the expropriation judge, the town hall must deposit with the deposit and deposit fund a sum equal to 15% of the price assessed by the Estates department and notified to the seller of the receipt. proving that this recording took place.
Failing to fulfill these two formalities of recording and transmitting the receipt, the municipality is deemed to have waived preemption, indicates article L213-4-1 of the Urban Planning Code. Please note that the procedure before the expropriation judge, who is a judge of the Judicial Court of the location of the expropriated property, requires the services of a lawyer.
Once the price has been set by the judge, the municipality can decide to acquire your accommodation at the price set judicially or waive the pre-emption. If you decide to sell even though the municipality has waived the pre-emption, you must respect the price set by the judge, possibly increased depending on the evolution of the construction cost index.
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