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Occupied viager

The occupied viager sale is the most common. It allows the owner to sell his/her possession while retaining both customary and dwelling rights during his/her lifetime, and the buyer to benefit from the reduction in sale price corresponding to the value of these customary and dwelling rights.

The first step is to evaluate as accurately as possible the sale price (or occupied value) which equates to the difference between the market value of the possession (freehold value) and the value of the customary and dwelling rights which depend on the life expectancy of the seller or sellers.

The second step is to establish the method of payment of the sale price taking into account the wishes of the parties: - Payment in full on the day the authenticated deed of sale is signe - A down payment (called the bouquet) on the day the said deed is signed with the balance paid as a viagère rent; - Or the entire amount is converted into a viagère rent.

The viagère rent is calculated using tables based on mortality statistics, which are regularly updated, and on a fixed rate of interest. The said rent terminates on the day of the Seller’s death. It should be noted that the viagère rent calculated in the first instance with the objective of meeting the Seller’s needs is index linked on an annual basis to maintain the latter’s buying power over the years. It is normal practice to index link the rent to the average retail price index established and published monthly by the INSEE (National Institute of Statistics and Economic Studies).

Charges and conditions: Contrary to popular opinion, the charges and conditions relating to the customary and dwelling rights are not governed by law: ‘the contract makes the law between the parties’. Generally speaking, the Seller continues to pay all the running costs (heating, electricity, water, running repairs, general repairs, management company fees…) and the Buyer pays for major repairs as per article 606 of the Civil Code, together with the Land Tax on developed property and fire insurance for the building.

Surrender of use: At any time the seller, who reserves the customary and dwelling rights, may release the property to the buyer who then pays in exchange an increased rent or a capital payment calculated according to the value of the recovered usage. It is best to make provisions for the possible vacation of the premises at the time of the act of sale.