Month: March 2017

The donation-partage (or gift with distribution) is a legal instrument under French law that allows individuals to distribute their assets among their children during their lifetime. It serves as both a lifetime gift and an anticipatory succession plan. This concept is especially relevant in France, where forced heirship rules apply, ensuring children (and in the absence of children, the spouse) receive a reserved portion of the estate.

In contrast to the UK, which lacks forced heir ship laws, the donation-partage is a strategic tool to prevent disputes and simplify the inheritance process. However, it is a complex legal arrangement that requires careful consideration and expert legal advice.

Key benefits of Donation-Partage

1. Minimises family disputes: By agreeing to the distribution during the donor’s lifetime, children reduce the likelihood of disagreements after the donor’s death. The process helps avoid joint ownership complications and lengthy succession procedures.
2. Tax advantages: Assets transferred via donation-partage are exempt from death duties. This can result in significant tax savings.
3. Control over distribution: Donors have the flexibility to allocate assets as they see fit, provided the reserved shares of children are respected. For example, if a French estate is valued at €300,000 with two children, each child is entitled to at least €100,000, while the remaining €100,000 can be freely allocated.
4. Valuation protection: The value of assets transferred through a donation-partage is fixed at the time of the gift. This contrasts with outright lifetime gifts, which are valued at the time of death, potentially creating unfairness in asset distribution.

Example of valuation discrepancy

Consider a scenario where a father gifts equal sums of cash to his two children. One child invests in property while the other spends their money. Upon the father’s death, the invested property may have appreciated, leading to a perceived inequality in inheritance. With a donation-partage, the valuation is frozen at the time of the gift, preventing such disparities.

Legal formalities

• Notarial deed: A donation-partage must be executed before a notaire (a public official specializing in French law).
• Spousal participation: If the couple’s matrimonial regime includes joint ownership, a joint deed is recommended to manage both individual and shared assets.
• Acceptance requirement: All beneficiaries must accept the donation-partage. If one refuses, the agreement remains valid for the others. The refusing beneficiary retains the right to challenge the donation if it undermines their reserved share.

Special considerations

• Reintegration of prior gifts: Outright gifts can be incorporated into a subsequent donation-partage, though they will be revalued at the time of reintegration.
• Conditional clauses: Donors may specify that in the event a beneficiary predeceases them, the gifted asset reverts to the donor. Proper drafting is essential to prevent complications, particularly with jointly held assets.

Why choose Tees

While the donation-partage offers substantial benefits, it is a technical legal tool requiring professional guidance. If you are considering using this mechanism to secure your family’s financial future, seek advice from a legal specialist experienced in French inheritance law.

Contact us today to explore how a donation-partage can work for you and your family.

The Macron Law, passed in France in August 2015, was designed to reduce bureaucratic red tape. Named after French Economy Minister Emmanuel Macron, this legislation has significantly impacted various areas of French law, including real estate. One of its primary goals is to minimize court cases related to planning permission issues.

This article outlines the most notable changes affecting French property owners and potential investors.

Can my neighbour have my house demolished?

Previously, disgruntled neighbour could initiate frivolous claims to overturn planning permissions, often citing minor technicalities. While such cases were not always successful, they caused significant delays and financial loss.

Under the Macron Law, the right to request demolition is now limited to specific areas, including:

• Natural reservations and protected perimeters
• Coastal strips within 100 meters of the shoreline
• Areas protected by the Mountain Law
• Natural 2000 sites safeguarding rare species
• Sensitive areas with environmental restrictions
• Zones with classified heritage buildings

Additionally, two existing conditions remain in place:

1. The construction must have been completed in compliance with a planning permission that was subsequently revoked.
2. Any demolition claim must be filed within two years of the court’s final decision to cancel the planning permission.

These changes offer greater legal protection to property owners, reducing the likelihood of groundless claims.

Building on agricultural land

Before the reform, building in agricultural zones was restrictive. Only agricultural structures or the conversion of existing buildings were permitted, without external modifications.

The Macron Law has eased these rules. Property owners can now:

• Build extensions to existing buildings
• Construct annexes such as garages, swimming pools, and sheds

However, it remains essential to check local planning regulations (Plan Local d’Urbanisme) before proceeding with any project.

Planning permission timeframes

The law has also introduced streamlined approval processes. Standard planning applications must be processed within two months. For projects near listed buildings requiring approval from the Architect of the Bâtiments de France, the timeframe is capped at four to five months.

If authorities fail to respond within these periods, the application is deemed approved. Additionally, planning permissions are now valid for three years, with extensions available upon request at least two months before expiry.

Changes to renting laws in France

In areas of high housing demand, known as “tense zones,” rent control measures apply. These regulations prevent unjustified rent increases, using standardised benchmarks based on factors like location, size, and building age.

From August 2015, landlords must use a mandatory rental agreement template. Furnished rental contracts also require an inventory list to ensure compliance with minimum living standards.

Notice periods for tenants in tense zones have been reduced to one month, while landlords must provide three months’ notice in all cases, with limited exceptions. Additionally, landlords must return deposits within one month if no damage is found or within two months if issues arise.

Buying and selling property in France

The cooling-off period for buyers has been extended from seven to ten days, giving purchasers more time to reconsider without losing their deposit. Sellers can now provide necessary documents electronically with the buyer’s consent. When purchasing apartments, sellers must supply minutes from the last three general meetings of the co-ownership.

Notaire fees and real estate ethics

The Macron Law has also introduced reforms for notaire fees, ensuring they are reasonable and based on objective criteria. Additionally, a code of ethics for real estate professionals mandates honesty, transparency, and up-to-date legal knowledge.

Why choose Tees

Navigating French property law can be complex. Whether you are buying, selling, or renting a property, consulting a qualified French legal professional is highly recommended to ensure compliance with the Macron Law and other regulations. Tees legal advice will help you make informed decisions and safeguard your investment in France.