The term "real estate" includes the following:

• The land, soil and subsoil
• Any buildings or structures built on it

Real estate transactions are mainly governed by the relevant provisions of the French Civil Code.

All documents transferring immovable property must be published at the Land Registry (Services de la publicité foncière). Until a deed of sale is published at the Land Registry, it is not binding upon third parties.

Documents transferring immovable property must be drawn up by, and signed before, French notaries. French notaries benefit from a legal monopoly in respect of such documents. French notaries are also responsible for the formalities on transfer of title, including prior declaration to the local authority benefiting from a right of preemption, obtaining Land Registry searches and checking the root of title over a 30-year period.

Registration of titles is managed by the Land Registry.

All documents transferring or encumbering real estate properties must be published at the Land Registry.

This includes the following:

• Sale and purchase agreements
• Mortgages
• Easements
• Specific restrictive covenants
• Leases whose duration exceeds 12 years
• Co-ownership agreements 

Land Registry searches can be obtained from the Land Registry through specific requests to obtain information on the name of owners of real estate properties or the different real estate properties owned by an individual or a company.

Within the context of a sale and purchase agreement of real estate property and once publication of the sale is completed with the Land Registry, a copy of the sale and purchase agreement is provided to the new owner.

All documents published at the Land Registry are available to the public and information about the ownership of real property can be searched. Specific fees are paid to obtain these documents.

There are generally no restrictions on foreign ownership of French lands subject to very few exceptions where authorizations are to be obtained and where administrative declarations shall be made, as the case may be.

In some cases, the French administration is entitled to expropriate when the building is located within the perimeter of a public utility operation. There is a very precise administrative procedure.

Land is divided into different zones. In some of these zones, local authorities (municipalities or other local authorities) benefit from a right of preemption.

Real estate property is held by any of the following means:

• Ownership
• Lease agreement

Investments in real estate properties are usually made through specific purpose vehicles.

Most real estate financing is arranged through institutional lenders such as banks. However, there are alternative lenders such as debt funds or insurance companies. They represent only a small part of the market.

Usually, the borrower will pay for all the lender’s legal and other costs. The lender usually takes securities over the real estate property and the different related assets (i.e., pledge over the shares in the purchasing company or in the company owning the real estate property, mortgage over the real estate property, assignment of rent paid by existing tenants in the real estate property and indemnities paid by insurance companies).

French notaries will prepare legal documentation for the direct sale and acquisition of real estate property. For sale and acquisition of real estate property through the sale and acquisition of shares in companies, and with the exception of mortgage deeds and deeds of release of mortgages, which are also produced by French notaries, the parties’ lawyers usually prepare legal documentation.

The French Civil Code provides for conditions applicable to all sales of real estate properties but these regulations are not mandatory. As a consequence, parties can waive most of these provisions and agree upon different terms and conditions. As a general rule, the transfer of real property does not entail the transfer of the liabilities related to that said property to the purchaser.

When the real estate property that is being sold was built or renovated less than 10 years prior to the sale, the purchaser is, by law, subrogated in the rights of the vendor vis-à-vis contractors who did participate in the construction or renovation of the real estate property being sold.

Regarding environmental matters, public authorities can require the operator (polluter) to clean up soil and subsoil contamination when the latter ceases its operating of the site or in case of pollution.

Tenants are not usually held liable for environmental damages caused by a previous tenant, unless it carries out the same activity and can be considered the same operator in the existing business.

The French Civil Code provides for conditions applicable to all sales of real estate properties. Some of these legal provisions are not mandatory. As a consequence, and to some extent, parties can negotiate and agree upon different terms and conditions in the sale and purchase agreement.

Tenants are generally not held liable for a previous tenant’s obligations, unless new tenants continue committing the breaches.