Life purchase or sale: what are the rules?

The life annuity consists in selling a property to a buyer in exchange for a life annuity (monthly, quarterly or yearly). This annuity may be accompanied by an amount paid in cash at the signing of the deed of sale, bouquet.

The buyer pays one or more sellers a lifetime annuity.

The buyer is called the debirentier and the seller is called the creditor.

Upon the death of the creditor, the life-span ceases and the debirentier enters into possession of the property without making any steps.

The seller's death must be unpredictable. Also, the buyer must not have been aware of an illness of which the seller was suffering at the time of signing the deed of sale.

If the seller dies within 20 days of the signing of the deed of sale, the event is considered foreseeable and the sale is not valid. Cancelation of the sale may be requested by the heirs of the creditor before the court.

As with all real estate sales, a authentic act The sales office must be established by a notary.

With a busy life, the seller keeps until his death the usufruct or a right of use property sold.

The usufruct allows the seller to live in the dwelling or to rent it and collect the rents.

The right of use allows the seller to keep the personal use of the dwelling by living there without being able to rent it.

As soon as the sale is signed, without having to wait for the death of the seller, thebuyer used freely good. He can occupy it or rent it and collect the rents.

The price is generally constituted by bouquet and a life annuity.

The bouquet paid in cash upon signing the contract of sale is not not required. It is freely fixed. In general, it represents 30% the total value of the property.

The life annuity may be paid to one or more natural persons (spouse or indivisaires). It may be monthly, quarterly or annual, payable at the beginning or end of each period.

When the annuity is paid to several creditors (sellers) and one dies, it is paid in full to the survivor (joint and several annuity), or reduced proportionately (reducible annuity).

The total value of the annuity is uncertain, because it depends on the life of the seller. Its amount is estimated according to several criteria among the following:

• Age and life expectancy of the creditor
• Value of the property
• Amount of the bouquet
• Rents that could be collected by the creditor if the dwelling was rented.

The notary calculates the amount of the annuity based on scales. They can be consulted by an insurance company or a notary.

The parties may include in the deed of sale a indexing clause. This clause allows the automatic revision of the amount of the annuity following, for example, the consumer price index published by theInsee: titleContent.

To ensure the security of payment of annuities, the creditor may, in particular, enter the following in the deed of sale;

• Resolutive clause authorizing the debtor to take back his property if several annuities are no longer paid by the debtor
• Penalty clause by which he has the right to keep the bouquet (if it has been paid), in the event of termination of the contract of sale.

The type of life, occupied or free, determines the distribution of charges and taxes between the seller and the buyer.