Extension of French emergency period: no impact on ongoing property transactions

  • Posted

In March, the French Government pushed back deadlines for a number of administrative decisions, such as pre-emption notices, bringing some property transactions in France to a halt. Decree no 2020-539 of 8 May 2020 amends these provisions.

In French conveyancing, notice of a sale must be served on the local authority in case they wish to pre-empt the sale and purchase the property themselves. While pre-emption of a sale by a local authority is not a frequent occurrence, notice must nevertheless be served for all sale and purchases. The local authority has two months to act from the date of notification of the purchase/sale. If they fail to reply within that period, it’s deemed that they are not interested in acquiring the property and the sale can then proceed.

In March 2020, an emergency decree suspended all notice periods for exercising pre-emptive rights in France. This measure retrospectively applied from 12 March 2020 (when the French emergency period was enforced) and to take into account the fact that, due to the health crisis, local authorities have not been in a position to make decisions on such matters. The affected notice periods were pushed back to one month following the end of the emergency period.

Initially, the emergency period was due to end on 25 May 2020. This meant that property transactions where the pre-emption notice expired after 12 March 2020 could only happen on or after 26 June 2020.  For sales and purchases where the notice had not yet been served or was served after 12 March 2020, the two-month notice period would have only started running from 26 June 2020. As a result, property transactions affected by pre-emptive rights would not be completed until 26 August 2020 at the earliest.

Although restrictions are gradually being lifted in France, the French Government has extended the emergency period to 10 July 2020. Therefore, property transactions where the pre-emption notice has not yet been served or was served after 12 March 2020 could not be completed until October 2020 at the earliest.

In order to ensure that the French property market is not frustrated further, the French Government has amended the emergency decree from March so that all relevant time periods, including pre-emption notices as mentioned above, will start to run again a month from 24 May 2020. Therefore, French property transactions where the pre-emption notice has not yet been served or was served after 12 March 2020 can still complete from late August onwards.