All about preliminary and final statement documents

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What is a preliminary statement and a final statement? What are their roles in a property sale?

The sale of a real estate property within a condominium requires particular attention, especially in terms of transparency and information. Among the essential documents that must be provided during this transaction, the preliminary statement and the final statement play a central role. They ensure not only financial transparency, but also security for all parties involved in the sale. Understanding their purpose and content is essential, both for real estate professionals and for individuals engaged in a transaction.

What are their differences, and why are these documents mandatory?

Before delving into the specifics of the documents themselves, it is important to understand the legal framework surrounding them. The sale of a property in a condominium involves specific legal obligations, designed to protect the buyer. French legislation requires sellers to provide a series of information and documents to the buyer, from the signing of the preliminary contract or sales agreement through to the finalization of the transaction with the signing of the authentic deed.

The preliminary statement was introduced by the ALUR law (Accès au Logement et Urbanisme Rénové, or Access to Housing and Urban Renewal) in 2014, aiming for transparency. Its purpose is to provide the buyer with financial information about the condominium before the sale. The goal is to enable the buyer to have all the necessary information to make an informed decision before committing definitively.

The final statement, on the other hand, is a long-standing document in real estate transactions in condominiums. It is a requirement that dates back several decades and aims to settle the financial situation of the condominium lot at the time of the property transfer. This document is prepared by the condominium manager, upon request of the notary handling the sale.

The preliminary statement: an essential document for the buyer

What is the preliminary statement?

The preliminary statement is an informational document that the seller must provide to the buyer at the time of signing the preliminary contract or sales agreement. It is a preliminary version of the final statement, providing essential financial information regarding the condominium lot in question. The buyer is thereby informed of the financial situation of the property within the condominium, even before the sale is finalized.

Contents of the preliminary statement

The contents of the preliminary statement are strictly regulated by law to ensure complete transparency. It mainly includes the following elements:

1. Current condominium charges

This refers to the amounts the seller still owes to the condominium for routine management charges (maintenance, shared services, etc.). This allows the buyer to know what remains to be paid for the current fiscal year.

2. The seller's debts to the condominium

If the seller is behind on payments or owes money to the condominium (for example, for previous work), these amounts must be mentioned.

3. Provisions for charges

The preliminary statement must indicate the amounts already paid by the seller for charge provisions, as well as those the buyer will have to cover after the sale.

4. Work funds

If the condominium has a work fund (mandatory for condominiums with more than 10 lots), the preliminary statement must indicate the amount and the portion corresponding to the lot being sold.

5. Information on ongoing legal proceedings

If the condominium is involved in legal proceedings, the preliminary statement must inform the buyer, specifying the nature and status of these proceedings.

Why is the preliminary statement important?

The preliminary statement allows the buyer to know with accuracy the financial situation of the lot they are about to purchase. This includes not only the current charges but also any outstanding debts from the seller. As a result, the buyer is aware of all the financial implications of their future purchase, enabling them to make an informed decision.

The preliminary statement is particularly useful for avoiding unpleasant surprises. For example, if significant work has been voted on but not yet paid for, the buyer must be informed to assess whether they are willing to assume these additional costs after the sale. Additionally, if there are ongoing legal proceedings, the buyer must be aware that they could be financially impacted.

The final statement: financial regularization at the time of sale

What is the final statement?

The final statement is an official document prepared by the condominium manager, upon request from the notary. This document is mandatory for signing the final sales deed. It serves to regularize the financial situation between the seller and the buyer at the time of the sale, accounting for condominium charges, outstanding debts, and cash advances.

Contents of the final statement

The final statement includes three main sections, each detailing a specific part of the financial situation of the condominium lot:

1. Current and extraordinary charges

This section outlines the amounts owed by the seller for current charges (maintenance, management, services) as well as extraordinary charges (voted work, urgent repairs).

2. Advances and provisions

Here, the condominium manager indicates the advances already paid by the seller for future charges, as well as those the buyer will have to cover. This section helps to settle the accounts between the seller and the buyer.

3. Condominium manager fees

The condominium manager may charge fees for preparing the final statement. These fees are typically the seller's responsibility, unless otherwise stated in the sales agreement.

What is the purpose of the final statement?

The final statement is a crucial document for the notary, as it enables them to allocate charges between the seller and the buyer at the time of the sale. Through this document, the notary ensures that all amounts owed by the seller to the condominium are properly identified and settled before the transfer of ownership. This prevents the buyer from facing unpaid debts or unresolved disputes.

The final statement also protects the condominium manager. Indeed, it guarantees that the seller no longer owes any debts to the condominium at the time of the sale, and that the buyer takes over the lot with full transparency. This facilitates the future management of the lot by the manager, avoiding financial complications.

Implications for the involved parties

For the seller

For the seller, the preliminary statement and final statement are essential documents to ensure the sale proceeds smoothly. The preliminary statement allows the seller to demonstrate good faith by providing all the necessary financial information from the start of negotiations. This can help establish a trusting relationship with the buyer.

By providing the final statement to the notary, the seller ensures that all debts are settled, and the transaction is in order. This helps avoid disputes after the sale, particularly regarding condominium charges or unpaid work.

For the buyer

For the buyer, these documents guarantee transparency. The preliminary statement allows them to know in advance the costs associated with acquiring the lot, including current charges and any future work. This gives them a clear view of the financial obligations they will assume after the sale.

The final statement provides additional security by ensuring that all debts have been cleared before the transfer of ownership. This protects the buyer from any financial claims from the manager or the condominium after the sale.

For the condominium manager

For the condominium manager, preparing the final statement is a crucial step. It allows them to settle the accounts of the sold lot, ensuring that all amounts due are fully paid before the transfer of ownership. The manager may also charge fees for preparing this document, representing a source of income for the management of the condominium.

Additionally, by providing the final statement, the manager protects the condominium from financial disputes that could arise after the sale. This facilitates the future management of the lot, ensuring the new buyer is fully informed of their financial obligations.

Consequences of non-compliance with these obligations

Failure to comply with the obligations related to the preliminary statement and final statement can have significant legal and financial consequences. If the seller does not provide these documents or omits crucial information, the buyer may sue for hidden defects or request the cancellation of the sale. Moreover, in the event of a dispute, the notary may refuse to finalize the sale until all the required documents are in order.

It is therefore essential that these documents are prepared with care and accuracy, not only to comply with the law but also to ensure a smooth transaction.

Winter Immobilier's support: expertise and peace of mind

At Winter Immobilier, we understand the importance of every step in the sale of a condominium property, including the preparation and management of documents such as the preliminary statement and final statement. With decades of experience in Nice, our agency uses its expertise to provide our clients with a transparent and secure real estate transaction.

We handle all the necessary administrative procedures in collaboration with the condominium manager and the notary, so you can sell your property with peace of mind. Thanks to our in-depth knowledge of the local market and our legal expertise, we ensure that every document is properly prepared and submitted on time.

From the preparation of the preliminary statement to obtaining the final statement, Winter Immobilier makes sure nothing is left to chance. Our mission is to offer you a comprehensive and personalized service, so you can focus on what matters most: the success of your sale.

Feel free to contact our real estate agency in Nice for more information or to get assistance with your real estate project. Our team is at your disposal to answer all your questions and provide the advice needed to ensure your transaction's success.