The story begins in October 2000 with 2 couples
who both find their idyllic French property after much searching,
but from this point on, their lives are very different.
 Mr
Keen (early 50s) and his partner Ms Young (late 30s) are both divorced
and have children by their previous marriages. However, they do
have plenty of equity in their UK home, and can afford to borrow
additional money to finance their move. They are suspicious of 'free
help' offered by advisers, as nobody does something for nothing,
so decide to sort out their own affairs.
Agreeing to buy a property for the
equivalent of 100,000, they return home having signed the 'compromis',
and set about arranging their finances. Their existing lenders back
home in the UK are more than welcoming, and offer an additional
advance to their current mortgage at a fixed rate of 6% for 2 years.
The money will be available in plenty of time for completion in
January 2001.
The Immobilier involved in the French
sale had explained that the Notaire acted for both parties in the
property transaction, and there was no need for anyone else to be
involved. Everything appeared to be going to plan, all that was
left to arrange now was the removals.
Mr Keen arranged for 3 quotes, which
he found to be on the high side and opted for the middle quote,
'to be safe'.
Meanwhile, the Smart family, whose
circumstances were pretty similar, sought professional advice via
Allez Français,
who offered a range of services designed to make the move to France
as simple as possible.
This included a meeting to explain
the differences between French property law, mortgage finance, the
effects of currency exchange movements and much more. More than
anything, they felt they had a point of reference, who knew their
situation, and could keep them appraised of developments.
Allez Français recommended a French mortgage to them,
taking advantage of the generally lower rates in France. This would
be topped up by some savings that they had built up and due to the
strong , they were advised to use the services of a specialist
currency dealer to secure the actual cost of their home. This was
done using a forward option at no cost to the Smarts, guaranteeing
the fixed cost of the purchase price and Notaires fees.
As far as removals were concerned,
Allez Français
were able to recommend a firm, who whilst not especially cheap,
were a specialist export removal firm and who used proper export
wrapping thus protecting all furnishings.
Having established the the Smarts
also spoke little or no French, they also arranged for an English
speaking Notaire to act for them, and arranged for a French will
to be made when the Smarts next visited for signing the legalities.
 One
of the major eye openers to the Smart family was the difference
in French law upon death, with the impact upon Inheritance Tax and
laws of succession. Allez Français
suggested to them that they consider inserting an 'en tontine' clause
and arranged this with their Notaire. Appropriate insurance plans
were also arranged to ensure that in the event of death money was
available to meet tax liabilities.
A final recommendation to the Smart
family was to use a Title Insurance policy, which at first appeared
unnecessary to the Smarts, but after further consideration seemed
like money well spent (only 150 approximately).
Over the Christmas period both families
looked forward to their 'dream' and felt well prepared. The Smart
family had a detailed statement from their adviser laying out all
of the costs involved and reassuring them of the arrangements to
hand. They also had the benefit of knowing that their general insurance
requirements had been properly established, as they had policies
with wordings in English.
Panic set in in early January 2001
for the Keen couple, when they were contacted by the immobilier
to arrange to get their money to the Notaire post haste. They now
discovered that due to exchange rate movements over the past few
weeks, the cost in sterling of their home had increased to over
113,000 and they had forgotten to include in their calculations
the Notaire fees, thinking that they were part of the seemingly
high figure charged by the agent. And they had to get their sterling
finances changed to Francs and then telegraphically transferred
to France. What a nightmare!
The Smarts were feeling pretty smug
- their arrangements with the Currency dealers had saved them 13,000+,
their money was being sent electronically at no charge, at excellent
rates. C'est la vie !
The big day arrived and the Keen
/ Young duo hadn't much of a clue what went on in the Notaire's
office, just that they had purchased and now owned in France. Meanwhile
the Smart's purchase went ahead, with an English translation, and
the insertion of the 'en tontine' clause, plus a French will done
for 'gratis'. Both families set off to investigate their new homes
and greet the removal men.
The Keen / Young partnership were
starting to wonder what was happening - no sign of the removals,
and a neighbour appeared to be erecting some fencing within their
boundary. Their removal firm arrived 48 hours later apologising
that they were part of a 'shared' load and the 1st job had taken
a bit longer than expected. One or two items of prize furniture
was a bit damaged, but it could be sorted out via the insurance,
if it was worth it, after the excess had been taken into account.
The Smarts removals were there spot
on time, and placed every item caringly into the new home as though
it were their own. There to greet them was a bottle of vintage wine
courtesy of the friendly financial adviser. They were able to sit
back and relax, fully enjoying their first evening as French property
owners.
The Keen duo now had some serious
problems that they were aware of and others that they were still
oblivious to.
If only they had used a professional
to assist them with the mortgage they could have got a better rate.
They could have also saved themselves 13,000 by using the currency
dealers. Plus they wouldn't have had that stress at the last minute
about the extra money and getting it into Francs, what an experience
that had been. Should they have used a different removal firm? What
to do about the neighbour? If only they had a clue about the wordings
on the French insurance documents.
Both parties decided to set off for
a meal in a local restaurant and coincidentally arrive together.
Recognising the familiar English accents they decide to share a
table and discuss their respective experiences.
Feeling quite an expert now, Mr Smart
relayed to the somewhat alarmed Mr Keen and Ms Young, some of the
potential problems ahead.
What they hadn't realised was that
in addition, they had an Inheritance Tax problem that would rear
its head sooner or later. They hadn't given a thought to a will,
or what would happen regarding succession. Given the family bickering
from the past, it would not be a happy time that's for sure.
The Title Insurance policy sounded
perfect for settling this dispute over the boundary, and what a
difference financially with the mortgage and currency deals they
had experienced. On top of this their neighbours had insurance policies
worded in English. Au secours! All because Mr Keen was too hasty
to arrange his own affairs and not bring in expert help.
One thing for sure, he would now
contact this adviser and seek his professional opinion about what
could and couldn't be rectified. Perhaps after changing his approach
for the future he could also change his name by deed poll to Mr
Wise.
This story is purely fictional and
intended only to highlight some of the problems that buyers may
experience with their purchase.
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