What Is a Séquestre in a Real Estate Transaction in France?
When purchasing real estate in France, certain legal terms may be unfamiliar to international buyers. One of the most important is the séquestre, also known as the escrow deposit. Understanding its role is essential to secure your purchase and protect your interests.
Definition of a Séquestre
The séquestre is a sum of money paid by the buyer as a guarantee of their commitment to purchase the property. This amount, generally between 5% and 10% of the sale price, is held in a dedicated escrow account managed by the notary or, in some cases, by the real estate agency. The funds remain frozen until the final deed of sale is signed.
Role and Purpose of the Séquestre
The séquestre serves to secure the transaction. For the seller, it is proof that the buyer is serious and committed. For the buyer, it guarantees that the funds will only be released to the seller once all legal and administrative checks have been completed. If the sale is canceled for a valid reason (for example, failure to obtain financing), the séquestre is fully refunded to the buyer.
The Séquestre in the Sales Process
The séquestre is usually paid when signing the compromis de vente (preliminary sales agreement) or the promesse de vente (unilateral promise to sell). From that point on, the amount is held by the notary until the transaction is finalized. At the signing of the final deed of sale, the séquestre is deducted from the total amount due.
Refund or Retention of the Séquestre
The séquestre is fully refunded to the buyer in the following cases:
- Withdrawal within the legal 10-day cooling-off period
- Failure to fulfill a contractual condition precedent (e.g., mortgage refusal)
- Sale canceled at the seller’s initiative
However, if the buyer withdraws without a valid contractual reason, the seller may retain the séquestre as compensation.
Importance for International Buyers
For foreign buyers, the séquestre is a financial protection tool ensuring that the funds remain safe until the official conclusion of the sale. Since the money is held by a French notary, it benefits from strong legal protection, as the notary acts as a neutral public official responsible for safeguarding both parties’ interests.
Conclusion
The séquestre is a key element of the French property purchase process. It protects both the buyer and seller, demonstrates the buyer’s genuine commitment, and guarantees that the funds are secure until the legal transfer of ownership. To avoid any issues, it is highly recommended to entrust this step to an experienced notary familiar with international transactions.
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