Credit: the right of borrowers
You want to buy real estate by borrowing? Whatever the nature of the credit you subscribe, the French legislation in force grants you rights protecting you. Know the right of the borrowers.
The protection of the borrower
The Scrivener Law
In effect since July 13, 1979, the Scrivener Act provides the borrower with protection against loan abuse. It applies to all loans financing the purchase of real estate for residential use or for professional purposes, the acquisition of building land, the carrying out of renovation or construction work of which the amount exceeds to € 21,350 or for the purchase of shares in a real estate company.
Credit offer: a 10-day cooling off
The right of borrowers to issue a loan offer:
When you receive an offer of credit issued by a lending organization, to be sent by registered mail with acknowledgment of receipt and include 3 copies, you have 10 days to think about it to review it and make your decision. As this reflection period is mandatory, you can not send a reply by mail until its end. The credit offer remains valid for one month from the date you receive it. You therefore have 20 additional days, once the cooling off period has expired, to study and compare the offer, and give your answer.
Conditions precedent for a real estate purchase
During any acquisition of a property, the buyer benefits from conditions precedent of sale. These can be applied to obtain a loan to finance the acquisition. It should be noted that in the absence of obtaining within the fixed deadlines, the purchaser can recover his deposit of guarantee because he is no longer bound by the promise of sale (or reservation contract). Conditions precedent to sale also apply if the building permit is refused. There is then nullity and non-existence of the demand for credit. In the case where the purchaser contracts several credits, those whose amount is greater than 10% of the total loan must be concluded under the condition precedent of other credits.
The pre-loan offer
Any prior credit offer must specify the elements allowing the borrower to make a decision. These are:
- Identity of the lender, the borrower (and sureties)
- Nature of credit
- value of the loan
- Terms of the loan (schedule, interest, release of funds …)
- TEG (Total Effective Rate) and total cost of the loan
- Insurance and guarantees requested (loan insurance, mortgage …)
- Conditions of credit transfer
- Amount of loan cancellation fees
- Time for reflection