Contract of sale: the weapon that protects buyers and sellers of real estate

Not being mandatory and implying costs, those who are about to make a transaction of a property may even think about dispensing  with the establishment of a CPCV (contract of promise purchase and sale) between the two parties. But it's something you really shouldn't do. It is one of the legal figures that precede the deed of purchase and sale and serves as a guarantee until the conclusion of the definitive contract, and can avoid enough distaste and loss of money.  But we have to respect some rules, we explain everything in this guide.

Such an agreement - and the draft of which can be consulted here -   has legal force to guarantee the rights of the contracting parties, thus safeguarding the individuals involved in the business until the time of the deed of the purchase and sale of a property. 

The CPVC should also be added to the license to use or construction.     annex a declaration replacing it. 

• When to make a CPCV and give a signal
• What happens in the event of non-compliance
• The great advantages of a CPCV 
• Care to be taken when signing a CPCV 

When to make a CPCV and give a signal

It is appropriate to make a CPCV when it is intended to sign the business - thus removing other potential buyers - when the property does not have a license to use, when the construction of the property is not completed or when the buyer is still  wait for the approval of bank financing, in case you need a housing credit, for the purchase of the property. 

It is very common to have a value involved in the promise-to-sell contract, called "sign" . The sign is a guarantee of compliance with the promise contract, and is also proof of the seriousness of the contractual intention. 

The amount given as a sign usually varies between 10 and 20% of the good being marketed. 

What happens in the event of non-compliance

It is possible to lose money in case of non-compliance with a CPCV. 

If the seller does not comply with the promise of purchase and sale contract, the buyer will have to return to the buyer twice the value of the down payment (money delivered  on the date of signing the promise contract). the seller can keep the value of the signal.  

The party who has served may also refer the matter to the court to seek the specific performance of the contract in order to obtain a judgment allowing it to be complied with.

   However, if both parties agree, it is possible to add a clause that cancels the contract if the bank is denied credit.  This allows to safeguard and get back the money from the signal that the buyer delivers to the seller. 

The great advantages of a CPCV 

A promise-to-buy and sell contract has numerous advantages for both the seller and the buyer .  

• The formalization of the business (purchase/sale of the house) within the agreed time.  
• legal certainty in the event of delay or non-compliance with the contract;  
• If the property does not have a license to use;  
• When the construction of the property is not completed;  
• As long as the buyer does not have the necessary amount for the purchase;  
• The time while the buyer is waiting for the approval of the bank financing.  

Care to be taken when signing a CPCV 

Even if it is not a mandatory contract, from the moment the CPCV is carried out it is covered by the law, just like any other contract. Therefore, and even if it presents advantages for both actors, the following care should be taken before signing a CPCV: 

• confirm that the full identification of the parties to the contract, the identification of the subject-matter of the contract (most often a property), the housing permit, the value of the sign, the amount of the reinforcements and the timing of the payments are written;  
• include the maximum period for concluding the final contract (in which case there can be room for manoeuvre for potential delays);  
• Include a clause that departs the buyer from the responsibility to respond to charges on the property, such as penhoras or mortgages;  
• Ensure that  housing credit is approved (if it exists);  
• In the existence of a condominium in arrears , ask the seller in advance for the last minutes of the condomino meetings, to check if there is any value in arrears;  
• Check in advance if the building has undergone construction recently or if you will need them soon. 

To avoid unpleasant surprises, Doctor Finance also recommends that a termination or cancellation clause be included in the contract, which should describe how to terminate the contract and in what period of time.