Legal Weekly: Sale of real estate: compensation for damage suffered when one of the parties withdraws before the final conclusion of the contract

Contracts for the sale of real estate are legal acts whose purpose and effect is to transfer ownership to the purchaser of the property.

Several stages are required and the final conclusion of the deed of sale requires that preliminary contracts be concluded beforehand:

The promise to sell: this is a seller's agreement to "reserve" the property for sale to a buyer. The promise to sell is also called a "unilateral promise to sell". The seller makes a firm and definitive commitment to the buyer, until the latter decides whether or not to exercise the option, i.e. whether or not to contract.

If the purchaser (the beneficiary) is at fault, the seller (promisor) will not be able to seek compulsory execution of the sale (unless the beneficiary has formally exercised the option before changing his mind). However, he will be able to claim the full amount of the immobilisation indemnity payable by the Beneficiary.

The offer to purchase (very rare in practice)

The sale can also be analysed from the buyer's side.

In this case, it is no longer the seller who makes an offer to sell and the buyer who accepts, but it is the buyer who makes an offer to buy the property.

This means that the buyer sets out in advance the conditions of purchase (type of property, surface area, location, etc.). As this offer to purchase is intended for the sellers (private individuals or professionals), it is the latter (one of them) who are supposed to accept the offer to purchase.

The sales agreement

The compromis is a synallagmatic promise to sell which commits both the seller and the buyer.

Consequently, if one of the parties refuses to repeat the sale, despite the fulfilment of the suspensive conditions, the other party may take action against it, to request, at its choice, either the forced execution of the sale, or the cancellation of the sale to its detriment, as well as damages resulting from the penalty clause provided for in the contract.

Following the signing of the preliminary contract, the final conclusion of the deed of sale will take place.

What to do if the seller or buyer does not sell or buy the property?

If it is the buyer who renounces the purchase of the property, the seller sends him a formal notice to appear before the notary.

If he does not appear, the seller sues the purchaser for compensation for the damage suffered as a result of this change of decision.

The seller's unconditional acceptance of the offer to sell makes the contractual relationship between the parties firm and definitive.

Therefore, if the buyer withdraws even though his offer to purchase was perfectly clear and precise, the seller may obtain damages as compensation for the loss suffered.

Cécile ZAKINE is at your disposal to advise you on real estate sales contracts or to assist you in case of litigation