When a person finds himself in financial difficulty, in a situation of over-indebtedness, there is a solution that would avoid the definitive transfer of assets or the seizure of assets. This technique is the repurchase sale which is now called a buy-back sale. Although it presents many interests for both the seller and the buyer, the sale to repurchase remains unknown in France.
Repurchase sale in a few lines
First, a little history
The repurchase sale would have its origins in the Middle Ages. The faculty of redemption is provided by Article 1659 to Article 1673. From an etymological point of view, repurchase comes from “redimere”, a Latin word that means “redeem”. The sale with the possibility of redemption had a prosperous period thanks to the banks in the years 1980 – 1990 which use it as a means of furniture refinancing.
As in any transaction, there is a seller and an acquirer. The one who sells, owner of a good, gives the property of this one to the purchaser while keeping the possibility of recovering his good later. It should be noted, however, that this is a perspective and not an obligation. The agreement takes the form of a contract between the two parties.
In order to enjoy his property again, the seller will have to return the initial price of the sale and reimburse certain expenses (works and all expenses incurred to value the property). The repurchase is valid for a maximum of 5 years. If the seller does not make the redemption within the allotted time, the buyer becomes definitively the owner.
Who can use the buy-sell?
This solution is open to any natural or legal person. Thus, individuals, companies, merchants, artisans, entrepreneurs of all kinds can sell a property in repurchase.
It should nevertheless be noted that it is an alternative to people who are in debt, who can not obtain credit or who are registered with the BanFrance.
What can we sell in repurchase?
The Civil Code stipulates that any property may be sold with the option of redemption. Anyone who can sell a car, a painting, a building plot, a house, an apartment, a jewel, etc. In reality, it is especially in real estate that it is practiced.
Sale with the option of redemption: formalities
As in any real estate sale, the usual rules such as expertise, site verification, energy diagnosis, etc. must be respected. Once the buyer found, the surrender period is decided together.
The repurchase agreement is then executed before a notary. Usually, it states:
- The absence of a premium to be paid to the buyer
- The lack of a guarantee corresponding to a shortfall for the buyer, if the seller decides to buy the property before the time limit
- A clause allowing the seller to sell the good himself at the market price
- A low occupation allowance, particularly in the case of the sale of real estate.
The notary will collect the payment and pay any creditors. The surplus will be retained for the purchase of the property. The seller’s financial situation is therefore immediately cleaned up.
Finally, the seller can continue to occupy the premises. An occupancy agreement must then be established with the buyer.
A repurchase agreement is neither a lease contract nor a pawnshell. Although the seller is obliged to pay monthly occupancy benefits, these allowances are called “occupancy rights” and should not be confused with rent.
In addition, it is possible to call on specialized companies to facilitate repurchase transactions.
How to exercise the option of redemption?
As soon as the financial situation of the seller allows it and as long as the period indicated in the contract is not exceeded, he can recover his property through a bailiff or registered letter with acknowledgment of receipt. The totality of the sums due will also have to be paid to the notary.
When the redemption procedure is initiated, the seller can not change his mind and retract.
The benefits of a repurchase sale
In practice, this sales technique allows the seller to stay in his home despite his troubles. He will thus benefit from a little respite and time to bail out his finances. Faced with extreme situations, this is enough to stop legal proceedings, to prevent foreclosure or expulsion.
Of course, the opportunity to buy back his property is a privilege of the most interesting.
On the buyer side, the repurchase sale is presented as a product of investment with little risk and especially an excellent yield in the short term.