There are many areas where sellers employ illegal activities in the house selling market. What they depend upon is the gullible and also vulnerable enthusiasm of potential buyers. While the law has regulations that protect buyers, in many instances, their rights are unprotected since they chose to act outside of the law in their dealings with sellers.
THE HOUSING SCAMS.
Recently the UK news told of potential buyers being defrauded of thousands of pounds by a seller who advertised a property for sale in France. Meeting these potential buyers at the house which was for sale, the seller tempted them with an unbelievably low price compared to all other houses on the market in the area.
It is well publicized that failing to act, or indeed stalling the decision to buy can lose a purchaser that home. The television programs about buying abroad show the pitfalls of not making swift decisions, and what the seller was doing was depending upon these purchasers to sign documents, believing that what they were getting was a bargain.
At the time of signing documents in France, it is normal to pay a deposit for the home. The seller was telling people that by private negotiation without the use of agents, they would save a fortune. Buyers were gullible and paid deposits for the home. The total selling period of a home in France, especially if it has agricultural land attached to it is up to four months. During this time, the seller attracted more than 40 people before suspicions were raised.
Each of the purchasers had paid their deposit, which had long since disappeared, and the stupidity goes further. By telling them that they would avoid capital gains laws by paying cash, the purchasers had paid untraceable amounts of money to a stranger.
How to avoid these kinds of pitfalls.
Houses in France are only sold with the use of a Notaire or Solicitor. Each sale is registered and if a seller denies the necessity to employ a lawyer, there certainly is something strange going on. At the time of payment of deposits, these are paid upon signing a document called a “Comprime de Vente” or sales agreement at the offices of either a real estate agent or a lawyer, and deposits paid direct to that company. These should never be cash amounts.
Selling things that don’t exist.
Another pitfall with buying houses in France is that rarely is the house inspected by a surveyor. Little by little new laws are being introduced, though in the meantime, buyers slipping through the net and purchasing properties that offer what they do not have is a common event.
For example, property owners tell purchasers that there is a septic tank, when in fact all there is is pipework to the local river, which is illegal. Central heating systems that are not even connected to a supply of fuel, electricity systems that have been installed by non qualified electricians are passed off as efficient, and rights of way that do not exist are promised by those buyers that just want a sale, regardless of correct information.
For example, a camp site recently came up for sale, though was zoned on land which is classed as Non Constructible Agricultural land. They were selling a woodland and extensive fields that already housed a mobile home. The mobile home was attached to a proper septic tank, had a garage and shed built next to it and was being sold on the bottom end of the housing market at what looked like a very tempting price.
What they didn’t tell the purchaser was that there was no permit for the mobile home to be on the land, that the installation of the septic tank was totally illegal, and that had the purchaser bought the land, the chances of the local authority letting him have the mobile home on the property was unlikely. Although the solicitor explained about permissions and stated that the land could not be used as a caravan park, there was nothing said about the existing building and it’s legality.
Another scam involved the use of photographs of an extremely tempting house at a bargain price. It was beautiful, had a lake outside the house, though what buyers didn’t realize was that the picture was being used as a hook to sell properties of lesser status. All inquiries would be told that the house was already sold and be sent details of houses now for sale. It worked, though is misrepresentation since the original house never was for sale.
How to avoid these kinds of problems.
If a home offers something, do check on the authenticity of what it offers. In the sixties, and even to this present day, people are buying homes without the necessary planning being in place, and are losing money.
By taking the purchase through a lawyer, and then listing the questions that you believe pertinent to the purchase, you are entitled to ask for :
*Status of the house and whether registered as a dwelling.
*Permissions applicable to the land attached to the house.
*Whether the mystery septic tank has paperwork to support it’s installation.
*Whether there is a certificate of conformity for electrical installations.
People who sell property to you misrepresenting what it is that you are buying are not actually breaking the law unless the homework is done and clauses are put into the initial sales agreement that the purchase is subject to:
a) Finance being granted.
b) All certificates for drainage, electric and services provided.
c) All permissions being satisfactory
(Here stating the length of the permissions you would expect is essential. In the case of the mobile home, the seller was offering with full permissions though did not say that these had not yet been acquired or that they would only be for a period of 3 months under French law for non constructible land).
Many property sellers will promise repairs and then not fulfill them. Here, you can protect yourself by signing the contract subject to a list of repairs that the purchaser promised to fulfill.
UNDER THE TABLE DEALS
In an effort to avoid Capital gains tax, many sellers will offer under the table deals, where the actual price paid for the home is registered as less than the real price. By doing this, he gains because he then pays less Capital gains on his profit, though this is illegal, and a buyer can be caught out by paying cash amounts to the seller unknown to legal representatives.
Beware of under the table deals because they give no advantage to buyers. All parting with money should be done in the offices of lawyers, a receipt given, and the price used in the documentation of the sale should reflect that amount paid.