Why add a list of furniture to the sales agreement?
Why add a list of furniture to the sales agreement ?
Including a list of furniture in the sales agreement in France brings about both a contractual and financial advantage. As such, it's common to include the list as an appendix to the final purchase contract, whether it's signed by a real estate agent or a french notary or not.
A contractual function
The primary purpose of the furniture list is to contractually freeze the furniture that the seller is required to leave in the property even after the sale. This document must be an exact representation of what the buyer can see on the property before signing the sales contract. The list should include all items in detail, such as kitchen furniture, bathroom furniture, appliances left by the seller/previous owner, and wardrobe items.
To get it right, real estate agents should also note more specific details of the listed furniture (i.e. color, material, brand, references of the appliances, etc.) and assign them usage values. This is to avoid the temptation of sellers to replace existing furniture with old or low-value equipment. Buyers have the right to request a copy of the missing furniture if they discover a discrepancy between the contents of the list and the items actually left by the seller/previous owner during the final inspection of the property. If this is the case, the buyer may request a reduction in the selling price equal to the value of the missing pieces of furniture.
Reduces notary fees
Notary fees in France are made up of a variety of costs, particularly the taxes imposed on the selling price. However, these taxes are only imposed on the real estate sale, not necessarily on the items included inside the sold property. If the value of these furniture pieces is mentioned in the sales contract, the fees will only be calculated on the value of the “bare” property. And this can be a huge money saver for the buyer!
To better understand this, take a look at this scenario:
An apartment for sale in Paris in an old building is at a selling price of €200,000.00. The list of furniture is not attached to the sales contract, thus the notary fee for the sale will be €14,200.00.
A similar apartment in Paris for sale is at €200,000.00, but this time the sales contract indicates the value of the furniture at €10,000. 00. The registration fee is only calculated at €190,000.00 (€200,000 minus €10,000.00 worth of furniture). In this case, the notary fee will be €13,600.00. This inevitably saves the buyer €600.00.
Be careful, however, not to “inflate” the value of the furniture too much. Keep in mind that the buyer's savings are in the tax deficit. If the value of the furniture remaining in the property exceeds 5% of the sale price, the tax authorities may find it suspicious.
If you need to sign a purchase contract immediately and the seller agrees to leave the furniture in a future apartment, ask the real estate agent or notary to clearly present a list of furniture that's worthy of compromise.
- Including a list of furniture in the sales contract of a real estate sale bring about both a contractual and financial advantage.
- It's common to see a list of furniture as an appendix to a sales agreement, whether it is signed by a real estate agent/notary or not.
- The primary purpose of the furniture list is to contractually freeze the furniture that the seller is required to leave in the property after the sale.
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Posted on 27/06/2022 by
Andy LECUYER
