For some, inheritance, though imbued with sadness, can be the gateway to a blissful future. The rural retreat that belonged to a great-grandmother; the Côte d'Azur pad on which someone's father splurged a City bonus - one day, they may well be ready for another generation. But for the have-nots, the contrast can feel so unfair. Yet if, like Tori Spelling, you're in the category of those who won't be taking receipt of family fortunes, then there are other ways. You can get your hands on someone else's property after they leave this mortal coil.
La vente en viager is a type of transaction in France dating back to the Middle Ages. It allows sellers to benefit during their lifetime from extra revenues released through the sale of their property. For the buyer it can be an excellent investment opportunity to purchase in areas that may otherwise be unaffordable. Properly organised, it is a win-win situation.
The deal can work in several ways but, put simply, the property is sold even though the occupier stays put until he or she is departed. The sale price is calculated on the freehold value less the value of right of use and occupancy based on the life expectancy of the occupant/s.
There are different possible payment options. In most cases, a downpayment is handed over on completion of the deal, and at the same time a monthly or quarterly rent is set and continues until the occupants (and the rental obligations) expire. Alternatively, the entire amount is paid to the seller on completion of the deal; or the buyer pays only rent, instead of a lump sum.
It sounds complicated, but the deals are appealing. Union Foncière, an agency that specialises in this kind of sale, has on its books a modern three-bedroom villa in extensive grounds in Roquefort les Pins, which is south of Grasse. The free-market value is €1,125,000 (£790,000). The house has a pool, pool-house and Jacuzzi and its owners are 76 and 79. The downpayment is €300,000 (£210,000) with a monthly rent of €2,240 (£1,600).
In Antibes, a couple in their early eighties are selling, through Etude Lodel, their Provençal villa (four bedrooms, 100 sq m cellar, garden with pool, sea views) for a downpayment of €335,000 (£235,000) and monthly rent of €4,573 (£3,200). The current market value is €1,100,000 (£770,000).
Perfectly placed for a Mediterranean early morning dip is the one-bedroom apartment being sold by a 74-year-old lady on the top floor of an 1856 bourgeois building off the lively pedestrian zone in Nice - a stone's throw from the sea. The free-market value of the property is €600,000 (£420,000). The bouquet is €90,000 (£63,000) with a monthly rent of €1,541 (£1,100). And, with stunning views over the Baie des Anges and Cap Ferrat, a couple in their mid- and late seventies are selling a sunny one-bedroom fourth-floor apartment on the Mont Boron for a downpayment of €155,000 (£109,000) with monthly rent of €1,200 (£840). Both are available through Union Foncière.
It is important for both parties to work out and agree who pays for what in terms of running and upkeep of the property before completion of the sale. Normally, the seller continues to pay the running costs while the buyer pays for any major repairs, the property tax, and fire insurance. The rent, index-linked, is reviewed annually. The seller can vacate the property at any time for the use of the buyer. The necessary provisions for this eventuality should form part of the initial contract of sale.
There is no limit to the number of viagers one can buy, and they can be sold on during the contract.
Buying en viager can provide an excellent opportunity for younger investors to plan for retirement. On behalf of two men (64 and 68), Union Foncière recently completed a sale to a young couple of a one-bedroom apartment with sea and mountain views in a modern apartment building above Nice. The complex has a swimming pool and tennis court. The downpayment was €21,800 (£15,300) with an affordable monthly rent of €300 (£200).
For many, selling en viager is an appealing proposition. It frees up capital to provide a guaranteed additional pension and there are attractive tax allowances on the viager rent received of up to 70 per cent for 70-year-olds and above. Anything can be sold en viager, so it also provides the perfect solution if your offspring are already squabbling over the Monet above the mantelpiece while you are still looking at it, or fighting over the Louis XV chairs in the lounge while you're still sitting in them.
But a word of warning to those who may be tempted to buy this way: people can defy the statistics and live longer than they should. In Arles, Jeanne Calment outlived her home's purchaser, who died in his late seventies having paid her in rent three times what the flat was worth. She eventually passed on at the age of 122. Some you win, some you lose.Reuse content