Renting before buying is not a new business concept. This practice is even widespread in certain sectors such as the automobile or computer hardware. In the real estate industry, this system is less common. It is nevertheless possible to become an owner after a few years of rental, within the framework of rental-accession. It is therefore a matter of gradually moving from the status of tenant to that of owner.
Note that rental-purchase contracts can relate to a large number of real estate assets, namely a single-family house, an apartment, a building for professional or mixed use (residential and professional use); whether the asset is under construction or already built. Concretely, it is a real estate reservation system. A reservation which requires the joint agreement of the owner and the tenant, and which must obligatorily be the subject of the signature of a lease-accession contract with a notary.
Rental-accession, guarantees for both parties
Rental investment may present certain risks for an owner, in particular due to rental deadlines , which can sometimes be long and leave an accommodation vacant. With the signing of a rental-purchase contract, this risk of vacancy is greatly limited, and the return on investment can occur quickly. In fact, rental-accession is a fairly short type of contract, since it lasts at least one year, and at most five years. For the tenant, this system is very interesting for a gradual home ownership. It is not always easy to obtain a mortgage , and this intermediate step can prove to be invaluable. In addition, the initial contractual commitment does not constitute an obligation. Thus, if the owner or the tenant does not want to take the plunge, the purchase will not be compulsory (see below). This is therefore an important commitment, but not final.
The terms of rental-accession
Like any real estate transaction, the lease-purchase contract is subject to strict rules. In this one must appear in particular the description of the good and its sale price, the guarantees of cancellation, the insurance and the guarantee of completion or reimbursement. Compared to a classic sales contract, we must add the rental period, the date of entry into use – in other words, the date on which the rental begins -, the charges relating to both parties, and the amount of the royalty. Indeed, within the framework of a rental-accession, the tenant does not pay a rent, but a royalty during the entire period of use. Depending on the geographical area where the accommodation is located, this generally varies from 6 to 9 euros per square meter.
The tenant and potential future owner must also pay the property tax, because he is de facto considered as owner. And he can, as such, participate in general meetings of the co-ownership, if it is not a rental investment in individual house. He must also pay an acquisitive fraction corresponding to an advance payment of the future purchase. As for the owner, if he is exempt from property tax, he is still required to carry out any major work; routine maintenance being the responsibility of the tenant.
What happens if the accommodation is not purchased?
By signing the rental-accession contract with a notary, the tenant agrees to pay rent made up of the royalty and the acquisition fraction. The total sum represented by this acquisitive fraction is deducted from the final sale price. But the tenant or landlord has the option to retract, for one reason or another, and not exercise the option to buy or sell. Three months before the deadline, the owner must send a registered letter with acknowledgment of receipt to know the tenant’s intentions. If the latter does not wish to acquire the property, the owner is then required to reimburse him for the sums paid within the framework of the acquisitive fraction. He may nevertheless require the payment of compensation of up to 1% of the total sale price.
If it is the owner who decides not to sell his property in the end, he must also inform the tenant officially for three months before maturity, and he must pay compensation corresponding to 3% of the sale price. Suffice to say that a rental-accession contract is indeed a commitment not to be taken lightly, whether on the part of the lessor / seller or of the lessee / buyer.
(By the editorial staff of the hREF agency)