Through the numerous years of acting as an estate agent in the French property market I have come across many different situations - some hilarious and some extremely sad. I have often thought about keeping a diary of events, but somehow never find the time to do it. However, then asked for a short article I decided to dig down into my memory and extricate a few anecdotes. They will provide some idea of the situations that can come about during the pursuit of a French property - and may be of assistance to would be purchasers. I have deal with many clients over the years - some have become good friends who I can drop into unannounced and be assured of a warm welcome. They also keep me up to date with various stories. In any event do not allow yourself to be put off your search - it is all part of the enjoyment of buying and owning a property in France. Remember you are buying in a foreign country whose customs are different - do not expect English ways.
To begin, let us assume you have taken the initial step and have requested an appointment to view houses in France - but you still have to find them and get into them. English clients are frequently amazed at the procedures! In our case we generally arrange for a meeting with our French associate for first thing in the morning. Following a review of the current property register, a short-list of some six to eight properties to view is normally prepared. The client will then depart with our associate for the site visits. This really is the most efficient way to see the properties. The houses may be difficult to locate without help. Indeed on many occasions I have been out with our colleagues who themselves have got lost.
One client, Mr. and Mrs. M who insisted on viewing by themselves, were provided with maps, detailed instructions, property details, and off they went. No more was heard from them until they phoned me on the Monday afternoon, back home from their trip. "No we did not have a good time - we only found two of the houses, and they were not suitable". "Well you were advised against it" cam my reply. On further discussion, and once they had calmed down it transpired that in any event they now knew they loved the area and would return the following weekend. They did so, they viewed with our associate, saw all the properties shortlisted, and then bought one! So make sure you use the assisted service - it saves time and our colleagues do have intimate knowledge to assist you. Almost certainly you will meet some real French characters, who will all be very (in some cases too) hospitable.
And then, once you have found the house, the problems do not necessarily end there! I have on countless occasions hacked my way through a virtual jungle only to be confronted by closed, but very rickety doors. Sometimes you do need sound boots and not flip-flops on these trips! A screwdriver often comes in very handy to pen the windows! Still you may be lucky, our associate may have provided you with a heavy bunch of very old fashioned French keys, or it is quite usual to find a set kept at the local café! However you still may have a problem in getting them to work as once happened to Nicole, one of our colleagues in the Vendee. Visiting a house with clients, she had the keys but could not get any to unlock the secrets of the house. Not easily defeated (and she never is) she noticed an open first floor window. Searching around, one of the barns yielded an old agricultural ladder - and up Nicole went through the window. Next followed the client's rather overweight wife; the poor woman landing heavily amongt the nettles! Luckily she was unhurt. Nicole was able to open up the house from inside and - the clients actually bought the place! The episode remained a constant source of amusement between ourselves and the client during the following weeks up to the date of signing the final contract.
Even once you have acquired the house it is not always the end of the storey. Mrs. G. a remarkable lady of sixty-eight purchased a very old water-mill in Normandy. She had gone over for a general look around and whilst driving about, by chance notices this particular property from the roadside, having recognised it from a batch of property particulars. On her return to England she phoned "property XYZ - I must have it, please negotiate a good price". "But have you seen it?" "Yes, yes" came the rapid reply. "Alright, but are you aware of the extent of the internal works required?" The reply came "No, I saw the outside, fell in love with the buildings and the beautiful setting and I simply must have it". So we negotiated a price and some weeks later the final contract was signed, using a Power of Attorney. A few weeks later we received a call from Mrs. G - could we send a map and detailed instructions as to where the property was! Even with this information she did not find it, but following a visit to our associates' office she did eventually get there. Even though she could not initially find her property and had not even seen the interior she was still a very happy lady (she is still restoring) All's well that ends well! Agents are always about and willing to help, I wonder how the above purchaser would have got on without us.
Have you or are you considering a business in France? The scope of the subject is enormous, covering a complete spectrum from a "one-man business" to major corporate acquisitions. This article seeks to examine small businesses which can be easily bought/set-up and controlled by one person (or couple). At this stage it aims to provide some "food for thought". Over the last few years there has been an increasing and continuing U.K. interest in the French property market - many people have acquired homes for a variety of reasons. Some small businesses have been acquired or established. There is now a definite trend towards establishing oneself permanently in France - and to do this in most cases requires a source of French income. Despite the U.K. being a member of the EEC it is not in practice a simple matter to find employment. However it is relatively straightforward to set up a business. This need not be a daunting prospect, provided, as with any project, sufficient homework is carried out, and the correct professional advice is sought.
WHAT and WHERE?
Just as with house purchase the choice is enormous. It is, to some extent a chicken and egg situation - as some projects will work better in one area than another. You might have a particular project in mind, which will only operate in certain areas; you may wish to live in one area, where only certain projects can work. It is certain that most opportunities arise in the leisure (and related) industry. Two other options should be considered. identification of a weakness or gap in the market for the provision of some goods and services identification of a person's own particular skills which could be developed. Perhaps the most overriding consideration, is the one concerning finance - it is virtually impossible to obtain a loan when no experience can be demonstrated (and note that qualifications without practical experience will be of little help).
The characteristics of an area require careful evaluation. Many tourist areas, e.g. have an extremely short season, whereas in others (the north coast) the season is longer. Clearly the nature of the available attractions has important effects.
The types of business which can be established or purchased are numerous and will include:
It is worthwhile to see what facility/service may be required. For example garden centres are virtually non-existent, and catering facilities for children are rare. Also it is difficult to obtain meals outside the traditional French eating hours. (Try feeling hungry at 4p.m. whilst visiting the FUTUROSCOPE!). There is the instance of the English company flying English style sandwiches into Paris on a daily basis - it has now set up a factory outside Paris to meet demand. Look at your own talents; thus an English teacher could contemplate a language school - and somebody who made his own surfboards, investigated the possibility of a small factory in France. Recently, for example, an English printer transferred his business from the U.K. to operate from the outbuildings acquired with the farm he had purchased.
The element of competition should be evaluated - especially so in the catering trade, where the French can excel at what they do. There is also competition from the English themselves; in recent years many couples have set up B & B's and gites complex, so it may be worthwhile to look at how they operate, and what could be changed:
A very basic business can be set up/purchased for as little as £50,000 - however the financial prospects are unlikely to be favourable. Realistically one should envisage a capital requirement from £100,000 upwards. At the other end of the price range, chateaux can be acquired and converted to many uses. There are large campsites on the beach from £500,000. There are farms and vineyards too, but in all cases you should ask yourself why are the French selling them. Also be careful that prices are not inflated for the U.K. customer (it does happen). It must be ensured that you know exactly what is being purchased and the total price expected. Most existing businesses are sold on a form of lease (you purchase the business, known as "fonds de commerce" and rent the premises); and it can be possible to negotiate for the freehold ("Les murs"). And lastly a final word on prices - the add-on fees to simple property purchases are already high (12 - 15%); for commercial transactions these can be as much as 25%. Whether you buy the business or a French company (owning the business) also has significant financial effects. Professional advice should be sought prior to signing any contractual documents.
At this point it may be of interest to indicate some of the projects undertaken:
These are only a few of many; there have also been various outlandish projects (some of which did not see the light of day!):
FORMALITIES and FINANCING
The structure of the operation will need to be determined (sole trader, U.K. company, French company). Appropriate advice is essential - the most appropriate being from an English firm of lawyers with a French legal firm.
The person(s) running the business will need a residents card or "carte de sejour". Formalities are surprisingly easy - the local French Chamber of Commerce will provide extremely helpful advice and practical assistance with the various procedures. Many have interpreters available. The business needs to be registered, with the Chamber of Commerce and various other public bodies (fiscal, social security). Certain businesses, especially catering are subject to special controls. Depending on the trade, authority will almost certainly be required from the Mairie (TOWN HALL). Various statutory requirements (accounting, fiscal, employment) must be rigorously complied with. At this stage the advice of a French "Expert Comptable" (equivalent to a Chartered Accountant) is essential. The business must have its own bank account - besides its practical and legal importance, it enables contact to be made with the local bank manager who is an invaluable source of information.
Financing can be made available either from the U.K. or in France. Exactly what is available will depend on the project. Whatever the source of finance, a sustainable business plan is required - and you need it too! For a French loan it is absolutely essential to be able to demonstrate relevant and practical experience. Obtaining a U.K. loan can be difficult. The institutions are not geared up for the French market, and more importantly they will not have the local French knowledge. Depending on the project and the region various grants and/or incentives may be available. As a general rule incentives are only available in those areas anxious to attract new business - thus you will find no grants available around Disneyland, or on the Cote d'Azur. For manufacturing projects assistance is frequently available in the form of rent-free premises or units fitted out to specific requirements.
CONCLUSION
It is not difficult to set up in France, provided the necessary homework is carried out and professional advice is sought. Money spent on advice at the outset can provide dividends in the future, and in many cases save on initial costs.
It is unlikely that your project will make you extremely wealthy. It is fairly certain that you will have to work hard - and put in longer hours than for a comparable English business (French bars are open for much longer hours than English pubs). However, you will in all probability have a more rewarding lifestyle.
Finally, do not worry about the Frenchman's attitude to your project. You will be surprised how helpful they will be. There are too many misconceptions about the French and their attitude to foreigners. Lastly if you do not speak French do not be put off. You will be surprised how helpful the French will be and how quickly you will (or be made to) learn!
Dear John,
Having now completed the purchase of Le Poitou I realise that without your guiding hand we would still have no more than a pipe dream of owning a house in France. The assistance of Sue Reilly was, as advised invaluable in dealings at the bank and the Notaire. Even Sue was amazed that we spent nearly three hours in the bank managers office. However, he turned out to be extremely organised, helpful and a pleasure to deal with finding nothing too much trouble (even worked through his lunch time to pen personal accounts).
Insurance was then organised at AGF where once again the lengths they went to were not expected ie two hours after agreeing the cover we returned to collect the policy enabling us to present it to the Notaire. Luc was obviously well organised as all dealings went without a hitch.
On behalf of Stephanie, Peter and Linda I would like you, when next in contact to thank the Reilly's and Luc for all their help in making everything go smoothly during our visit.
Six months ago I new absolutely nothing about buying property in France and due to that fact would probably not have done anything further than view the property's. With your advice and guidance giving me the confidence to take further step we finally made it to the finishing post. Once again many thanks from all of us and we would be more than pleased to thank you in person if you are every passing Le Poitou.
Yours sincerely,
Martin Petch