The process of buying real estate in Monaco
The process of buying real estate in Monaco is fairly straightforward, even if different and unique in some aspects from that of other countries, including France. There are three notary public officials appointed by the Princely Order acting on behalf of the state who participate in transactions from the offer stage to the legal transfer of the property. The main responsibility of the notary public is authenticating the property transfers and ensuring that the interests of the buyer and the seller are properly protected from beginning to end.
The process of buying real estate in Monaco can be divided into three main stages, the written offer, sales contract, and legal transfer of the property.
The real estate purchase offer in Monaco
Once the buyer selects the property, the Monaco’s estate agents can commence the negotiations process on behalf of the buyer. However, unlike the system in many other countries, it is necessary for the offer to be made in writing before the negotiation process can begin. The written offer must include all the important transaction conditions and information about the buyer:
> A detailed description of the property
> The offered price of the property
> The term of validity of the offer, after which the offer becomes null/void
> The buyer’s ID/passport details
> Proof of current address
> Response communication channels available to the seller
> The total notary fees and the real estate agency’s commission to be paid by the buyer
> Timing of the acquisition and any conditions, i.e. subject to obtaining mortgage
The buyer’s intent to purchase the property must be confirmed by a deposit, which will be collected by the notary once the offer is accepted. The amount of the deposit is universally agreed to be 10% of the offer price, but it may different if both parties agree otherwise.
The written offer to purchase the property is legally binding. Once accepted by the owner, it becomes a valid contract for both parties. If the buyer were to withdraw from the transaction after the seller has accepted the terms, the deposit would be forfeited. Similarly, in the case of a defaulting seller, the deposit is handed back and the notary forces the seller to pay compensation to the buyer for the same amount. In such cases, a procedure to force the seller to go through with the transaction may be considered.
Property sales contract
Upon acceptance of the written offer, a notarial contract of sale is then written and officially executed in front of an authorised Monaco Notary. At this stage, the following must be paid by the buyer:
– The balance of the property purchase price
– Notary fees and stamp duty (currently at approx. 6% of the transaction amount)
– Estate agency commission (3% of the transaction amount + 20% VAT)
As an example, on a purchase of a 10 million EUR property, the buyer should expect to pay notary and agency commission fees of approximately 960 000 EUR (600,000 EUR to the notary and 360,000 EUR including VAT to the estate agent)
Legal transfer of the property
The legal transfer of the property is the last step carried out by the notary public, who has the authority to authenticate documents by affixing his seal and his signature. He personally testifies the will expressed by the parties involved and is liable for the content and the date of the sales contract. The alterations made to the deed confirm the contents of the sales contract and the agreement between the parties with probative and executory power. The legal property transfer takes place and the buyer can begin to enjoy the benefits of being an owner of a property in Monaco.
It is recommended that the process of buying real estate in Monaco is discussed in detail with an estate agency and/or notary public before making a purchase decision.