Declaration of intention to sell (Art. L. 213-2 Town Planning Code): clearing the pre-emption right without delaying closing

An investor signs a preliminary agreement (promesse de vente) on a Paris building, sets the closing at four months and secures its financing. Three weeks after the declaration of intention to sell (déclaration d'intention d'aliéner, DIA) is filed, the municipality requests the documents needed to assess the composition of the building, then asks for a visit. The time limit is suspended twice, the long-stop date for completion is passed, the loan offer expires and the seller discovers that it can neither sell nor regain its freedom. This scenario involves no irregularity: it results from the literal application of Article L. 213-2 of the French Town Planning Code. This guide treats the clearing of the pre-emption right as what it is for an investor or an institutional seller, a decision timetable to be built in from the negotiation of the preliminary agreement, and not a formality delegated to the notary.

The scope of the obligation to declare: what triggers a DIA

The urban pre-emption right (droit de préemption urbain, DPU) is established by resolution of the municipality or of the public body for inter-municipal cooperation (EPCI) with responsibility for the local town plan. Its holder may delegate its exercise, in particular to a public land agency, a semi-public company (société d'économie mixte) or a development concessionaire (Article L. 213-3 of the French Town Planning Code). In the Île-de-France region, delegation to the Île-de-France public land agency (EPFIF) or to a social landlord is common practice, which changes the seller's real counterparty and, often, the likelihood of pre-emption.

Article L. 213-1 determines the disposals concerned. It covers transfers for value located within the pre-emption perimeter: sales, exchanges, transfers in lieu of payment (dations en paiement), contributions to a company, transfers of joint-ownership rights other than to the benefit of a co-owner, transfers of usufruct or bare ownership, and auction sales. The so-called simple DPU contains exclusions, in particular the sale of a co-ownership lot and that of a built property completed less than ten years ago (Article L. 211-4). These exclusions fall away where the municipality has established the reinforced DPU by reasoned resolution, a frequent situation in the central arrondissements and the inner-ring municipalities. The transfer of a majority of the shares in a French property holding company (société civile immobilière) may also fall within the scope of the reinforced DPU: structuring the deal as a sale of the company rather than of the asset does not mechanically neutralise pre-emption.

First due diligence reflex: check the resolution establishing the pre-emption right and its perimeter, and not merely the planning certificate. A buyer acquiring a distressed asset at a discount also inherits the exposure to pre-emption, with a timetable that it does not control.

Competing pre-emption rights

The DIA for the urban pre-emption right does not exhaust the subject. Depending on the asset, the following may overlap: the residential tenant's pre-emption right on a sale by lots, that of the tenants on a sale of a whole building, the commercial tenant's pre-emption right (Article L. 145-46-1 of the French Commercial Code), the pre-emption right over businesses and commercial leases (Article L. 214-1 of the French Town Planning Code), sensitive natural areas or SAFER (rural land agency). Each right has its own time limit. The order of clearing and the possibility of running them in parallel determine the overall timetable. Clearing them sequentially out of caution can add several months to the transaction. The conditions for exercising the right recognised to a tenant when the property it occupies is sold are set out in our guide to the tenant's pre-emption right.

Article L. 213-2 of the French Town Planning Code: text and sanction

The text sets out the obligation, its minimum content and its sanction.

Any disposal referred to in Article L. 213-1 is subject, on pain of nullity, to a prior declaration made by the owner to the town hall of the municipality in which the property is located. That declaration (...) must state the price and the conditions of the proposed disposal (Article L. 213-2, paragraph 1, of the French Town Planning Code).

Three operational consequences. The declaration is the owner's responsibility, the notary being only its agent to prepare and notify it. The mandatory content covers the price and the conditions, which goes well beyond the amount entered in the deed. And the sanction is nullity of the sale, the action being subject to a five-year limitation period running from publication of the deed in the land register.

The notion of conditions must be taken seriously. The following fall within the scope of the declaration: who bears the intermediary's commission, the existence of vendor financing or deferred payment, the value of the furniture, a price supplement conditional on obtaining a planning permission, the occupation of the property and the leases in force. A DIA that omits a price supplement exposes the seller to two symmetrical risks: the authority that pre-empts at the declared price acquires at a reduced price, and the deed concluded with the third party on conditions different from those declared is open to challenge.

The starting point of the time limit: the only date that counts

The time limit runs from receipt of the declaration by the holder, not from its dispatch by the notary. Proof of that date is the key document in the file: receipt for filing at the town hall, postal acknowledgement of receipt, or acknowledgement of receipt from the online service where the municipality has opened one. In a high-stakes file, that date must be communicated to the parties and to the lender as soon as it is obtained, and not reconstructed on the eve of closing.

The two-month DIA time limit and the effect of silence

The silence of the holder of the pre-emption right for two months from receipt of the declaration (...) amounts to waiver of the exercise of the pre-emption right.

The two-month DIA time limit is counted from date to date. The decision to pre-empt must be taken and notified to the owner before its expiry: a resolution or order signed in time but notified afterwards is ineffective, and tacit waiver is acquired. The buyer therefore has an interest in requiring the seller to communicate immediately any correspondence received from the authority, including letters that appear innocuous.

An irregular DIA does not start the time limit running

A declaration that lacks the mandatory particulars, or that inaccurately describes the property, the price or the conditions, does not start the time limit. The clearing is then a false clearing. The risk is not theoretical for an institutional seller disposing of a portfolio: an error in the area, the omission of an outbuilding or an incorrect description of the state of occupation is enough to weaken the transfer. The five-year limitation period of the action for nullity leaves a long window of exposure, incompatible with the asset warranty expected by an acquiring fund.

The two suspensions of the time limit: documents and visit

Law No. 2014-366 of 24 March 2014 for access to housing and renewed town planning, known as the ALUR Law, gave the holder two investigative tools that suspend the time limit. They are the main source of slippage in closing timetables.

The request for documents may be made only once and relates to a list fixed exhaustively by the regulatory part of the code (Article R. 213-7), concerning the composition and condition of the building, and the situation of the property holding company in the case of a transfer of shares. The time limit is suspended from receipt of the request and resumes from receipt of the documents by the holder. If the remaining time is less than one month, the holder has one month to decide.

The request for a visit follows a separate mechanism. The owner has eight days to accept or refuse it, the visit taking place within fifteen days of receipt of the acceptance. The time limit is suspended between receipt of the request and the date of the visit or of the refusal, with the same floor of one month on resumption.

Three lessons for the conduct of the file.

• The two suspensions are cumulative. Adding together the initial time limit, the production of the documents, the organisation of a visit and the one-month floor, the clearing can exceed four months without any irregularity on the part of the authority.
• The suspension works against the seller. As long as the documents are not received, the time limit does not resume. A slow or disorganised seller blocks its own timetable. Transmission must be immediate, complete and traceable, with proof of receipt kept.
• Refusing a visit is a trade-off, not a fault. It makes the time limit resume on the date of the refusal and therefore shortens the investigation. But it deprives the holder of an element of assessment and may prompt it to pre-empt as a precaution, or to propose a downward revised price. The choice is made case by case, depending on the real likelihood of pre-emption and the condition of the property.

The possible outcomes and their effects on closing

Waiver, express or tacit

An express waiver notified before the deadline is the most favourable outcome: it frees the timetable immediately. Tacit waiver requires waiting for the time limit to expire and, in practice, obtaining a certificate of non-pre-emption. The sale must be completed within three years of the waiver, and at the declared price and conditions. Beyond that, or in the event of a change in the price or conditions, a new declaration of intention to sell is required (Article L. 213-8).

This point is often underestimated in the final phase. A renegotiation of the price downwards after delivery of a technical report, the absorption by the seller of a works budget or the conversion of a cash payment into deferred payment restart the procedure and, with it, a new two-month time limit that may be suspended. Any price discussion after the DIA must be weighed taking account of this timetable cost.

Pre-emption at the declared price

The decision to acquire at the price and conditions of the DIA makes the sale binding between the authority and the seller, but does not transfer ownership: a notarial deed is still required. The price must be paid within six months of the decision (Article L. 213-14). Failing payment within that period, the seller regains the freedom to dispose of its property. For an institutional seller driven by a disposal timetable, pre-emption therefore means receipt of funds potentially deferred by several months, with a risk of default by the pre-empting authority that is resolved only on expiry of that period.

The holder cannot attach new conditions to its decision. A pre-emption made subject to obtaining financing, to a later resolution or to the carrying out of works is not an acquisition on the declared conditions: it is irregular and open to challenge.

Partial pre-emption

Where pre-emption concerns only part of a single plot of land (unité foncière), the owner may require the holder to acquire the whole (Article L. 213-2-1). The mechanism protects the seller against the break-up of land whose value lies in its unity. It must be activated formally and on time, failing which the seller is left with a residual plot whose value and usability are impaired. For an investor buying land with a view to a development, partial pre-emption is a project risk before it is a price risk: the loss of the footprint needed for access or parking may make the programme unworkable.

The revised price offer and judicial determination

The holder may offer to acquire at a lower price, relying on the opinion of the property valuation service (service des domaines). The owner then has three options: accept the price offered, maintain its price and have it fixed by the court with jurisdiction over expropriation, or withdraw the property from sale. The owner's silence amounts to withdrawal from sale.

The judicial route deserves a cold economic assessment. It adds several months, or more in the event of an appeal, to a timetable that is already used up. The judge values the property according to its actual use and the reference date defined by Article L. 213-4, which may lead to a value noticeably below the expectations of a seller reasoning in terms of market value in its future state. At the end of the judicial determination, each party may still withdraw within two months, silence amounting to acceptance of the price fixed. The determination of the price and compensation of the owner in this context are analysed in our article on the price in the case of reinforced urban pre-emption.

Withdrawal from the sale after pre-emption: the blind spot of preliminary agreements

This is the point least well handled in preliminary contracts. Withdrawal from the sale after pre-emption at a revised price is a right of the owner alone. The buyer under the preliminary agreement has no say in it, and above all: withdrawal takes the property off the market. A seller that withdraws cannot then sell to the beneficiary of the preliminary agreement at the initial price. It will have to file a new declaration if it later decides to dispose of the property.

Three consequences must be anticipated in writing.

If the seller accepts the revised price, the sale is formed with the authority and the buyer is ousted without compensation, unless otherwise stipulated. A well-advised buyer therefore prohibits the seller from accepting a lower offer without its written consent, and attaches a fixed indemnity to that obligation.

If the seller maintains its price, the preliminary agreement must survive the judicial determination procedure. This requires a long long-stop date, automatic extension and a contractual allocation of the procedural costs.

If the seller withdraws, the preliminary agreement becomes devoid of purpose. What remains is to characterise that withdrawal: failure of a condition precedent, in which case the buyer recovers its deposit without further compensation, or non-performance attributable to the seller, in which case a penalty clause is triggered. In the absence of a stipulation, the debate goes before the judge, with real uncertainty.

Calibrating the preliminary agreement to the clearing timetable

The clearing of the pre-emption right is treated in the preliminary agreement as a stand-alone risk item, on a par with financing or town planning. The following stipulations constitute the minimum foundation for a transaction of consequence.

• An express condition precedent of non-exercise of pre-emption rights, covering all the rights applicable and not just the DPU, with a precise definition of the date of fulfilment (receipt of the certificate of non-pre-emption or expiry of the time limit).
• An obligation to file the DIA within a set number of working days of signing, with immediate communication to the buyer of proof of receipt and of any correspondence from the authority.
• A long-stop date for completion set on the long scenario, including the cumulation of the two suspensions, and an automatic extension mechanism in the event of a request for documents or a visit.
• An obligation of diligence on the seller in transmitting the documents requested, with a contractual time limit, the suspension of the statutory time limit working to its detriment.
• A governance clause for the response to a revised price offer: mandatory consultation, prohibition on accepting without the buyer's written consent, joint choice of whether to maintain the price or withdraw.
• Return of the immobilisation indemnity (indemnité d'immobilisation) or the deposit within a firm time limit in the event of actual pre-emption, and separate treatment of the case of voluntary withdrawal by the seller.
• A prohibition on any change to the price or the conditions after filing of the DIA without written agreement, given the obligation to declare again.

The validity period of loan offers and, where applicable, the timetable of an asset deal tied to a refinancing transaction must be synchronised with the long long-stop date, and not with the nominal two-month time limit. On the time that usually separates the preliminary contract from the notarial deed and the parties' rights in the event of delay, see our article on the period between preliminary sale agreement and final deed.

Challenging a pre-emption: a short window, heavy effects

The pre-emption decision is a unilateral administrative act. It must state the purpose for which the right is exercised and relate to a development action or operation meeting the objectives of Article L. 300-1, the reality of the project having to be established at the date of the decision (Article L. 210-1). An application for judicial review for abuse of power (recours pour excès de pouvoir) is brought before the administrative court within two months. Both the seller and the ousted buyer have standing.

A two-month period for challenge, faced with an act that blocks a transaction, requires a rapid decision. Summary suspension proceedings (référé-suspension) under Article L. 521-1 of the French Code of Administrative Justice are the useful lever where the urgency lies in the financing, in a transaction timetable or in a chain of sales. Insufficient reasoning, the absence of a real and certain project, misuse of procedure or lack of competence of the author of the act are the grounds most frequently argued.

Annulment of the pre-emption decision does not in itself destroy the sale concluded with the authority, disputes over ownership being a matter for the ordinary courts. The code provides for an obligation to offer the property to the former owner and then, failing that, to the ousted buyer. Compensation for the loss suffered by the ousted buyer requires proof of a causal link and of a certain loss, which requires the study, financing and immobilisation costs to have been documented from the outset.

Conclusion: treat the DIA as a timetable constraint, not as a formality

The two-month time limit in Article L. 213-2 of the French Town Planning Code is a nominal time limit. The real time limit is the one resulting from the cumulation of the two suspensions, the one-month floor on resumption, and any renegotiation of the price that requires a new declaration. In a transaction with high economic stakes, the error is not to suffer a pre-emption, a statistically rare event: it is to sign a preliminary agreement whose long-stop date was set on the optimistic scenario.

Before any signature, have the maximum clearing timetable reconstructed, competing pre-emption rights included, and set the long-stop date, the validity period of the financing and the fate of the immobilisation indemnity on that basis. And deal in writing, before the DIA and not after, with the case of a revised price offer: it is the only situation in which the seller alone has a right of withdrawal that destroys the buyer's transaction.

Frequently asked questions

Does the two-month time limit run from dispatch or from receipt of the DIA? From receipt of the declaration by the holder of the pre-emption right, in accordance with Article L. 213-2 of the French Town Planning Code. The date of dispatch by the notary has no effect. Proof must be established by a receipt for filing at the town hall, a postal acknowledgement of receipt or the acknowledgement of receipt of the municipal online service. That date must be included in the closing file and communicated to the parties as soon as it is obtained.

Does an incomplete DIA clear the pre-emption right? No. A declaration that lacks the mandatory particulars of Article L. 213-2, in particular the price and all the conditions of the disposal, does not start the time limit. The authority's silence then does not amount to waiver, and the sale concluded afterwards remains exposed to the action for nullity, which is subject to a five-year limitation period running from publication of the deed in the land register. Checking the content of the DIA is part of the buyer's due diligence and not only of the drafting notary's task.

Must a new DIA be filed if the price is renegotiated after the technical audit? Yes. The holder's waiver applies only to the declared price and conditions. Any change to the price or the conditions requires a new declaration and opens a new two-month time limit, itself liable to be suspended by a request for documents or a visit. That is why price discussions must be closed before the DIA is filed, or dealt with by a contractual mechanism that is neutral with regard to the declaration.

For how long can the holder's waiver be relied on? Three years. Article L. 213-8 of the French Town Planning Code requires the sale to be completed within that period from the express or tacit waiver, at the declared price and conditions. Beyond that, any new disposal requires a new declaration of intention to sell. This point particularly concerns portfolios whose marketing is spread over time.

Can the seller refuse the visit requested by the municipality? Yes. The owner has eight days to accept or refuse the request for a visit. The refusal makes the time limit resume on its date, which shortens the investigation compared with a visit organised within fifteen days of acceptance. The trade-off depends on the real likelihood of pre-emption and the condition of the property: depriving the holder of a direct assessment may prompt it to pre-empt as a precaution or to make a revised price offer.

What happens to the immobilisation indemnity if the municipality pre-empts? Pre-emption causes the condition precedent of non-pre-emption to fail: the immobilisation indemnity or the deposit must be returned in full to the beneficiary. The preliminary agreement must still set a firm time limit for return and distinguish this case from the legally different case of voluntary withdrawal by the seller after a revised price offer. In the absence of a stipulation, this second case generates disputes over who is responsible for the failure.

What remedy exists against a pre-emption decision and within what time limit? An application for judicial review for abuse of power before the administrative court, within two months of notification or publication of the decision. The seller and the ousted buyer have standing. Summary suspension proceedings under Article L. 521-1 of the French Code of Administrative Justice are called for where the urgency lies in the financing or in a transaction timetable. Annulment gives rise to a right to an offer of retrocession in favour of the former owner and then of the ousted buyer, and where applicable to compensation for the loss established.