Before embarking on a major transaction such as buying real estate, it's essential to understand each step of the process. One of these crucial steps is the " Promise of Sale ." But what exactly is it? And why is it so important in a real estate transaction in Senegal? Let's delve into the details.
What is a promise to sell in Senegal?
The Preliminary Sales Agreement , often abbreviated as PV and also known as a Unilateral Promise of Sale (PUV) , is a preliminary contract that plays a crucial role in the real estate purchase process. It precedes the final deed of sale, which is signed before a notary . Although its signature is not legally required, it is strongly recommended. Why? Because it allows for the clear definition of the terms of the sale, such as the price, specific clauses of the contract, and any conditions precedent.
But the pre-sale agreement doesn't stop there. It also protects the buyer. Once signed, it grants the potential buyer an exclusive purchase option on the property in question. This means that for a specified period, the seller cannot offer the property to another buyer. This guarantees the buyer that the property they intend to acquire will not be "taken away" by a better offer in the meantime.
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What are the legal obligations of a preliminary sales agreement?
Signing the preliminary sales agreement is not a trivial matter. It commits the seller to reserving the property for the designated buyer, under the conditions defined in the contract. In other words, the seller commits to selling, and the buyer obtains a purchase option. This option, called a "purchase option," is time-limited.
The buyer, for their part, benefits from a legal cooling-off period of 10 days. During this period, if they change their mind, they can cancel the purchase. However, to secure this option, the buyer must pay a deposit, generally between 5 and 10% of the sale price . If the buyer cancels the purchase within the legal period, this sum is refunded. If the buyer does not exercise the purchase option within the allotted time, the sale is cancelled, but the deposit remains with the seller.
The ideal time to sign a Preliminary Sales Agreement
Signing a Preliminary Sales Agreement (Promesse de Vente) is a major step that generally occurs after successful negotiations between the buyer and seller. It is when both parties have agreed on essential elements such as the sale price, conditions precedent, payment terms, and other relevant details that the agreement can be signed. Although this signing can take place privately between the two parties, it is strongly advised to have it done before a notary. This approach offers greater legal security and ensures that the interests of both parties are protected. Once the agreement is signed, it is sent to both the buyer and the seller by registered mail, thus providing proof of receipt.
Distinction between a Promise of Sale and a Preliminary Sales Agreement
It is common to confuse a Promise of Sale with a Preliminary Sales Agreement , but it is essential to distinguish between these two preliminary contracts. The main difference lies in the commitment of the parties. A Promise of Sale is unilateral: only the seller commits to selling the property to the potential buyer, who, for their part, has the option to exercise the purchase option or not. In contrast, a Preliminary Sales Agreement is bilateral: it binds both the seller and the buyer. If one of the two withdraws without a valid reason (excluding suspensive conditions), they may be required to pay damages to the other party.
Essential elements to include in a Sales Agreement
For a preliminary sales agreement to be legally valid, it must contain certain essential elements. These elements generally anticipate what will be included in the final deed of sale . Among these elements are:
- Full identification of the seller and the buyer.
- The signature of both parties.
- A detailed and accurate description of the property in question.
- The expiry date of the promise, that is to say the duration of the purchase option.
- The agreed selling price.
- Payment terms.
- The withdrawal period, generally set at 10 days.
- The suspensive conditions, if any.
Suspensive clauses in a Promise of Sale
Suspensive clauses are conditions that, if not met, can cancel the sale. They generally protect the buyer against unforeseen events that could jeopardize the purchase. Common suspensive clauses include a bank's refusal of a mortgage or the discovery of easements that would make the transaction impossible. If either of these conditions is met, the transaction is canceled, and the buyer receives their deposit back.
The Preliminary Sales Agreement (Promesse de Vente) is an essential legal tool in the real estate purchase process in Senegal . It protects the interests of both parties and ensures that the transaction proceeds smoothly. Whether you are a buyer or a seller, it is crucial to fully understand this preliminary contract and ensure that all essential elements are included. If you have any doubts, do not hesitate to consult a real estate professional or a notary for guidance.
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