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Housing in Guadeloupe

Buying a Property

As in France, there are no restrictions on foreign ownership of properties in Guadeloupe. House prices in Guadeloupe have firmed somewhat since early 2009, with per square metre buying prices moving up by around 20%, while rents have not moved much.

Once the parties have agreed on the price and what the sale relates to, the parties will be required to sign a preliminary agreement. The preliminary agreement usually takes the form of (in the North) an option (promesse unilatérale de vente), with a 5% to 10% penalty if the option is not exercised, usually secured by a deposit held by the notaire. There is a 7-day cooling-off period, within which the buyer can change his mind.

If a mortgage is being sought, the compromise de vente must contain a clause confirming that mortgage financing is being sought, then, if the mortgage is declined, the purchaser will not lose his deposit.

Once preliminary contracts have been exchanged, there are pre-completion searches: land registry searches, local authority searches, planning permission searches, etc. If the dwelling has been sold by a “property professional” or is less than ten years old, the seller has a statutory liability to all future owners within the ten year period for defects.

On completion, the purchaser and vendor sign the Acte authentique de vente at the Notaire’s office. The notaire will see that the account is settled, will accept his fee, and land registry fees, if they are not included in the notaire’s fees.

There is an additional 15.4% VAT on buildings less than five years old.

Renting a Property

Guadeloupe follows French tenancy law, which is strongly pro-tenant. Even though initial rents are freely determined, strong security of tenure is given to the tenant, and the legal process is labyrinthine.

The initial rent can be freely agreed between the owner and the renter. However, the rent can be revised only once a year, and only if a clause in the contract (carefully drafted) specifies it. The increase cannot be above the increase of the four-quarterly average of the INSEE index of construction costs. Index clauses and periodic clauses must comply with this.

Barring such clause, if at the end of the contract the owner wishes to raise the rent, he must demonstrate that the rent is manifestly underneath the current standard for the area and for comparable residences, by furnishing nine examples, each with extensive details – exact addresses, surface areas, state of decoration, date of construction, time during which the residences have been rented, and rental amount. If the increase arrived at is more than 10%, it must be spread over six years, even if the contract is only for three years. If no agreement is reached, the owner must go the Departmental Conciliation Commission, and if that fails, to a judge.

The tenancy contract may stipulate a deposit of not more than two months’ rent, and only if the rent is not paid in advance.

An unfurnished property contract has a minimum duration of three years (if the proprietor is a person), or six years (if the proprietor is a company or society). An individual owner can make a shorter contract (one year minimum, except in the special case of holiday lets) only if he needs to recover the property for professional or family reasons, e.g. retirement, return from abroad, need to house a family member. If no limit is fixed in the contract, three years are automatically applied.

Furnished property benefits from slightly different treatment. The contract duration is for one year; at the contract end it is automatically renewed, unless notice has been given by either side.

That aside, furnished contracts are less regulated as concerns deposits, charges, the obligations of landlord and tenant, and the documents to be attached to the contract.

Furnished property is taxed as professional income, and is exempt from value added tax. The owner is liable to pay local taxes.

During the contract, the tenant can leave any time he wishes, subject to two, or more commonly, three months' notice (reduced to one month if the tenant loses his job, is over 60 and in bad health, etc). The landlord is not free to give such notice.

In both cases when the contract ends, the owner can only re-occupy the property if:

• he or a member of his immediate family intends to live there;
• he intends to sell;
• for another serious and legitimate reason, such as that the rent has not been paid, or the tenant has not taken house insurance, or abuses his rights to use the dwelling.

Notice must always be given at least six months before the end of the contract. It must be sent by registered post or by a bailiff. If the landlord intends to sell, he must send a copy of the offer (including the price) to the tenant, who has a priority right to buy.

The tenant can rarely be evicted before the term ends; perhaps only if the building is likely to fall down, when the mayor can evict the tenants. Otherwise, even for non-payment of rent, the landlord has to wait till the end of the term, and the notice must be sent at least six months before the end of the term, and complex conditions must be complied with. Even then, the process will take between six months to a year and a half from the end of the contract.

A shorter procedure exists if the contract includes a resolution clause (clause resolutoire), but this can only cover:

• non-payment of rent;
• non-registration of house insurance.

A resolution clause allows the immediate termination of the contract after a two months’ notice, if the specific obligation fixed in the contract is not satisfied.

The contract must be in writing. There are a number of obligatory clauses, and also many forbidden clauses. The 1989 Act (Art 8) prohibits the tenant from sub-renting without a written agreement from the landlord.





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