Real Estate Due Diligence in France

Real Estate Due Diligence in France

Updated on Monday 21st November 2022

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The real estate due diligence is performed in France when a buyer wants to check various aspects regarding a building before making a real estate purchase. Commercial property due diligence is an important step because it concerns a long-time investment.
It is advisable to work with French professionals whenever making a real estate transaction, in order to obtain the best property, suited to your specific needs. Our attorneys in France can handle real estate due diligence for any types of commercial real estate in France.

Why is real estate due diligence a must?

Real estate represents a set of verifications on a residential or commercial property with the purpose of establishing whether the purchase of the said property is safe or not. It is also important to verify a property not only from a financial point of view, but also from a technical point of view in order to have a clear picture of whether the real estate is safe for living or working in.
There are several ways of verifying a property in France, one of the most reasons for pursuing such process being to check the property for any encumbrances and liabilities. The real estate due diligence will be completed depending on the purpose of the purchase.

Where can a French property be verified?

The safest place to check a real estate property with is the French Land Register which holds information on all the properties registered in the country. The information which can be found with the Land Register is related to:
  •  the current and the past owners of the property;
  •  the mortgages or any other debts related to the property;
  •  the surface of the property;
  •  the purposes the property can be used for.
Our law firm in France can perform interrogations with the Land Register on behalf of those interested in real estate due diligence. Our team can also help you open a bank account or start a business in France

The real estate due diligence process in France

due diligence verification for commercial or industrial real estate depends on the needs of the buyer and the objective of the purchase. Depending on the type of buyer, a real estate due diligence will have slightly different objectives:
  • - for a lender, the due diligence is focused on the ability to repay the loan for the purchase;
  • - for a strategic buyer, the property is purchased for personal use and the property needs to meet specific criteria; 
  • - a financial buyer will want to purchase a property that will generate profits in time and a proper investigation will determine the amount and durability of the future income.
Developers in France have different objectives and may want to purchase properties that can later be changed according to the demand on the market. A complete and professional due diligence process will consider all of these aspects and many more.
Our French lawyers can advise you regarding the best properties on the market, if you want to open a business in France and need to set up a main place of business.
If you want to buy a house in France, feel free to discuss all the legal aspects with our French lawyers. There are a series of formalities to consider, and the most important document is the sale-purchase document, which will be signed on the date of the notary. We also recommend real estate due diligence, to be sure that the property you want is free of legal problems.

Real estate due diligence checklist in France

A real estate due diligence process needs to include not only information about the condition of the building, but also about its financial situation (mortgages, financial statements, etc.) and other miscellaneous information. 
Technical due diligence deals with the physical characteristics of the property:
  • - materials used for construction,
  • - building plans,
  • - seismic risk assessment,
  • - mechanical system reports about equipment and facilities within the building (elevators, ventilation, air conditioning, etc.).
An environmental due diligence can also be performed and it includes soils test, tests for different substances or mold.
For more details about real estate due diligence in France you can contact our law firm in France. We provide various legal services including company due diligence