The SRU Law: Solidarité et Renouvellement Urbain (solidarity and urban renewal)

By Samina Arnoult of Samina Arnoult Global Financial Services

Voted December 13, 2000,the SRU law has come into effect June 1, 2001. It extends the buyer’s protection.

This important text sets out nearly 200 articles and modifies no less than eight codes (the public health code, planning code, habitation and construction codes, general code of regional administrative units, rural code, general tax code, civil code and state code) with great ambition: to organize the development of French cities, towns and villages, based on habitat, planning and transportation.

The main points to be aware of are:

Period for cancellation (délai de rétractation)
Until the SRU law, a 7-day cancellation period existed only for new buildings, but now applies also to old property. This is a major development, as it allows buyers to retract from a decision made under pressure of hard selling, or because other buyers were lined up and you were afraid the property would go, or because you didn’t get the time to do proper checks.

If you do change your mind within the 7 days you must send a registered letter with acknowledgement of reception (lettre recommandé avec avis de réception).

Down payment to close the sale (versement d’argent)
It is common practice to put down a check of 10% of the buying price to close the sale, which will be cashed in straight away. Sometimes it is possible to negotiate down to 5%. The new law states that there should be no payment before the 7 days cancellation period is over. However there is an exception for new buildings and houses. If you are going through a real estate agent (agent immobilier) and he has professional insurance ("garantie financière"), he is allowed to accept a down payment but he must refund you within 21 days if you change your mind. A private owner or "notaire" (ministry officer in charge of drawing up the deed) may ask you for the down payment only after the 7 days are up.

Promise to buy (promesse d’achat)
The document binding the buyer and the seller is called the "promesse de vente" (promise to sell). It has been common practice amongst real estate agents to ask the buyer to sign a "promesse d’achat" (promise to buy), binding only the buyer who agrees to buy at a certain price. This is usually done when the price that the buyer is agreeing to is different than what is proposed by the real estate agent, who then has to see with the seller if he agrees to the new price. No payment is allowed in this case, and if there is any, the contract will be considered null.

Certificate of asbestos check (certificat d’absence d’amiante)
The "promesse de vente" must have the certificate of asbestos check attached to it, showing if there is any material in the property containing asbestos. It is obvious that you should refuse to buy the property if there is any asbestos, or put a written condition (condition suspensive) in the promesse de vente asking for the replacement of the incriminated objects. The initial decree of February 7,1996, has been modified by the decree of September 13, 2001, reinforcing the obligation for an owner to get the check done.

Technical diagnosis and history of work and repairs done on buildings (établissement d’un diagnostic technique et carnet d’entretien)
Any building over 15 years of age should have a technical diagnosis certifying that the building is in good condition. The notaire should notify you. The syndic must have a logbook with the history of repairs and work done on the building for maintenance. You need to ask the syndic if you want to consult this document. This has not been enforced yet in practice.

Obligations of the owner towards the buyer other than the SRU Law
When buying property, make sure that the owner is respecting the obligations he has towards you as a buyer. It is the notaire’s responsibility to make sure that all the following certificates are produced and comply with the law. They are the following: Loi Carrez , asbestos check (mentioned above), lead check, parasite, termite and xylophagous insect check.

Carrez law
La Loi Carrez voted December 18, 1996 followed by the decree of May 1997 states that the seller must indicate the surface of the property in the promesse de vente, and must produce a certificate to the notaire on the day of the signing. The calculation of the surface follows strict rules. If there is a 5% between the surface stated in the promesse de vente, and the real surface, you have one year to take legal action to be refunded.

Lead check
This obligation concerns property built before 1948, by the law voted June 9, 1999. The owner must provide a certificate dating less than a year, regarding the risk of having access to lead (through paint, pipes etc.).

Parasite, termite and xylophagous insects check
Owners are required to report to the town hall immediately if they detect or informed of the presence of any of the above. This is to avoid the hazard spreading any further. A check of parasites is compulsory, dating less than three months, and will be attached to the deed. The law was voted June 8, 1999.

About the Author
Samina Arnoult arrived in France in 1977 and started working in finance in 1984. She worked with Worms, Legal and General, and the Natwest, serving the expatriate community. She set up her own financial consulting business in 1994 ("conseil en gestion de patrimoine") covering all areas of finance: real estate, the stock market and life assurance. In her work, she has a global point of view, and works on all aspects of financial life: fiscal, inheritance, retirement, risk, assessment, etc. The objective is that her client reaches his/her goals through careful financial planning.