In France, you are considering buying or selling a property located in an urban or urbanizable area and you have heard about the urban right of pre-emption without knowing exactly what it entails. This mechanism allows a municipality to replace a buyer and purchase a property being offered for sale as a priority, with the aim of carrying out projects of general interest. Understanding how it works, its deadlines and its consequences is essential to securing your real estate transaction, whether you are a buyer or a seller.
In Summary
- The urban right of pre-emption (DPU) allows a municipality to acquire a property being offered for sale as a priority, in urban and urbanizable areas defined by the local urban planning scheme.
- Before any sale in an area subject to the DPU, the seller or their notary must submit a declaration of intent to sell (DIA) to the town hall.
- The municipality has a period of two months to waive its right, accept the proposed price, or make a counter-offer that may be challenged before the expropriation judge.
- Certain properties are exempt from the DPU (inheritances, family gifts, divisions, contributions to companies, in particular), and the seller always retains the freedom to withdraw their property from the sale if the negotiated price does not suit them.
Definition and Areas Concerned
What Is the Urban Right of Pre-emption?
The urban right of pre-emption is a mechanism provided for by the French Urban Planning Code, in Articles L211-1 et seq., which authorizes a public authority, most often the municipality or the competent public intermunicipal cooperation establishment, to acquire a property being offered for sale as a priority. The objective is to enable the public authority to carry out urban development projects, build public facilities, develop social housing or preserve natural or heritage areas. In practical terms, when a seller finds a buyer, the municipality may replace the latter and purchase the property in their place, under the conditions and within the deadlines set by law.
In Which Areas Does the DPU Apply?
The urban right of pre-emption does not apply everywhere. It may only be established in urban areas (U) and areas to be urbanized (AU) defined by the municipality's local urban planning scheme (PLU), by a resolution of the municipal council or the competent deliberative body. Outside these areas, particularly in agricultural or natural areas, the DPU does not in principle apply, except for specific mechanisms such as the right of pre-emption in sensitive natural areas. Before any transaction, it is therefore recommended to consult the PLU at the town hall or request an urban planning certificate to check whether the property concerned is located within an area subject to the DPU.
The Declaration of Intent to Sell (DIA)
An Obligation Before Signing the Sale
When a property located in an area subject to the DPU is sold, the seller, or more generally the notary handling the file, is required to submit a declaration of intent to sell (DIA) to the town hall, in accordance with Article L213-2 of the French Urban Planning Code. This formal document, generally prepared using a Cerfa form, specifies in particular the identity of the parties, the description of the property, the price and the conditions of the proposed sale. This formality must imperatively be completed before the signing of the authentic deed of sale, otherwise the transaction may be challenged.
Why This Step Is Essential
The DIA enables the municipality to become aware of the proposed sale and decide whether or not it wishes to exercise its right of pre-emption. Failure to submit this declaration exposes the seller to sanctions and may legally weaken the sale, including several years after it has been completed. This is why the notary plays a central role in this procedure: they systematically check whether the property is concerned by a DPU and are responsible for sending the declaration in due time.
The Procedure and Possible Outcomes
A Two-Month Response Period
Upon receipt of the DIA, the municipality has a period of two months to make a decision, as provided for by Article L213-2 of the French Urban Planning Code. Once this period has elapsed without a response, its silence constitutes a tacit waiver of the exercise of the right of pre-emption, and the sale may then proceed normally with the initial buyer.
Three Possible Outcomes
Following its review, the municipality may take three different positions. It may expressly waive its right to pre-empt, in which case the sale proceeds as planned with the initial buyer. It may also agree to acquire the property at the price and under the conditions stated in the declaration, and then simply replaces the initial buyer. Finally, it may make an offer at a different price, generally lower, which it considers more consistent with the market value; the seller is then free to accept this counter-proposal, negotiate, or reject it. In the event of a continuing disagreement over the price, either party may refer the matter to the expropriation judge, who will then set a judicial price that is in principle binding on both parties, subject to the seller's right to withdraw referred to below.
Consequences for the Buyer and the Seller
For the Buyer: A Risk That the Sale May Not Go Through
For a buyer, the main risk of the urban right of pre-emption is that the sale may slip away if the municipality decides to exercise its right of pre-emption. Even after reaching an agreement with the seller, signing a preliminary sale agreement and undertaking financing procedures, the buyer may find themselves excluded from the transaction without being able to legally oppose it, as the law does not grant them the right to challenge the pre-emption as such. It is therefore essential, before committing, to check with their advisor or notary whether the property in question is located in a pre-emption area, in order to anticipate this risk. To avoid unpleasant surprises, it may be useful to consult our real estate listings accompanied by personalized support on this matter.
For the Seller: An Obligation, but Also a Freedom
The seller, for their part, is required to comply with the notification obligation via the DIA, failing which their sale may be legally weakened. However, they retain an important freedom: if the municipality offers a price they consider too low, or if the price set by the expropriation judge does not suit them, the seller has the possibility of withdrawing from the sale and removing their property from the market, within the period provided for by law after the judicial decision. This right of withdrawal protects the seller against a pre-emption imposed at an overly unfavorable price.
Properties Excluded from the Urban Right of Pre-emption
Certain transactions fall outside the scope of the DPU, even when the property is located in an area where this right has been established. This is notably the case for inheritances, gifts made between members of the same family, divisions, certain exchanges, as well as certain contributions to companies. Specific rules also apply to certain transfers of condominium lots depending on their age. Given the technical nature of these exceptions and their regular evolution, it is essential to have the exact situation of your property checked by a notary before any transaction, as the notary is the only professional authorized to confirm whether a sale does or does not fall within the scope of the right of pre-emption.
Practical Advice for Securing a Transaction in an Area Subject to the DPU
Before signing a preliminary sale agreement, it is strongly recommended to request an urban planning certificate and check with the town hall or the PLU whether the property is located in a U or AU area subject to the right of pre-emption. It is also recommended to anticipate the deadlines: the two-month period given to the municipality to make a decision must be incorporated into the transaction schedule, particularly if a move or another purchase depends on it. Having a free property valuation carried out also makes it possible to have a solid reference value, which is useful in the event of negotiations with the municipality over the price. Finally, seeking the assistance of an experienced professional, such as a local Capifrance real estate advisor, makes it possible to receive support at every stage and to secure your purchase or sale project as effectively as possible.
Conclusion
The urban right of pre-emption is a legal mechanism that can have a real impact on the course of a real estate sale, for both the buyer and the seller. When properly anticipated, it is nevertheless not an insurmountable obstacle: the key lies in a good understanding of the areas concerned, strict compliance with the declaration of intent to sell procedure, and support from competent professionals, with the notary and real estate advisor at the forefront. In case of doubt about a specific situation, only a notary will be able to confirm with certainty the rules applicable to your property.
FAQ
Who Can Exercise the Urban Right of Pre-emption?
In principle, it is the municipality, or the public intermunicipal cooperation establishment competent in matters of PLU, that exercises the urban right of pre-emption. This right must have been established by resolution for the urban and urbanizable areas concerned. In certain cases, the municipality may also delegate the exercise of this right to another public body, such as a HLM housing organization or a public land establishment.
What Happens If the Seller Does Not Submit a DIA?
The absence of a declaration of intent to sell in an area subject to the DPU constitutes an irregularity that may durably weaken the validity of the sale. The municipality or any interested person may, under certain conditions, request the cancellation of the transaction before the court, including several years after the signing of the deed. This is why the notary systematically checks this obligation before any signing.
Can the Buyer Challenge the Municipality's Pre-emption Decision?
The initial buyer does not have a direct right to oppose the pre-emption exercised by the municipality, as the law does not grant them standing to act in the same way as the seller. However, in certain cases, it is possible to challenge the legality of the pre-emption decision before the administrative court, particularly if it is not based on a genuine ground of general interest. Legal assistance is recommended in such a situation.
Can the Seller Refuse to Sell If the Municipality Pre-empts at Too Low a Price?
Yes, the seller retains the possibility of withdrawing from the sale if the price offered by the municipality, or the price subsequently set by the expropriation judge, does not suit them. They have a statutory period after the judicial decision to exercise this right of withdrawal and remove their property from the sale. This right constitutes an important protection for the seller within the pre-emption procedure.
Does the Urban Right of Pre-emption Apply to All Types of Property?
No, certain transactions are excluded from the scope of the urban right of pre-emption, notably inheritances, certain family gifts, divisions, as well as certain exchanges and contributions to companies. These exclusions are nevertheless subject to specific conditions that vary depending on the nature of the property and the transaction. A notary is the professional best suited to confirm whether a given sale falls within the scope of application of the DPU.
Author
Frédéric Rémy – Director of Sales Performance
A real estate professional with several years of experience within the Capifrance network, I would like to share essential advice with you to help you successfully complete your property project with our advisors.
