Print Posted By Lost in France on 8 May 2007 in French Property - Buying French Property

Sous la table - Buyer and Seller Beware

sous la tableEven though new laws and regulations have attempted to stamp it out this kind of house purchase fraud is still surprisingly common in France today despite the heavy fines and certain prison sentence if the offenders are caught.

So why do people still indulge in handing money under the table? Well simply put for the seller the advantage is that he or she obviously won't declare the "under the table" part of proceeds of the sale and so will avoid paying taxes and duties due on the amount and for the buyer the main attraction of this kind of fraud is a lower purchase price and of course a lower notaires fee.

Some may say this kind of thing is pretty harmless and why pay taxes and duties if you can get away without paying? Well quite frankly apart from being illegal it's tax evasion and doesn't do anything to help the already struggling French economy and there is also a darker side as one British woman and in the process of getting divorced in France told us of her experience regarding this type of fraud.

The woman who lives in Brittany and wishes to remain anonymous had purchased her property with her partner with a Tontine clause imposed, her spouse tried to pressurise her into selling the property but under the Tontine clause she was not obliged sell her property unless of course she wanted to do so. Under the terms of the divorce settlement her husband stood to gain nothing financially from the sale of the house as he owed his wife more than the value of his share of the property in unpaid maintenance which under French law would be deducted from his share of the proceeds should a sale take place.

The woman's husband and her neighbours an Anglo/French couple who were interested in buying a cheap second property then struck a deal whereby they 'officially' would purchase the house at rock bottom price way below market value and pass a lump sum of money under the table to the woman's husband.

The neighbours and the woman's husband then spent several months trying to persuade her to agree to a sale, when this failed they then tried to intimidate her into selling, in affect the trio were trying to cheat the woman out of her home and divorce settlement! She told us:
It got to the point where I had to padlock my gate because they kept coming on to my property, my neighbours wife would scream at me from the street telling me I had to sell to them and her husband would follow me up and down the road trying to scare the end I had to report them to the local gendarmerie. It was hardly what I expected in rural Brittany but apparently they were well known for this kind of thing, they'd tried something similar with their elderly mother, which involved trying to force her to sign her house over to them, tragically the stress killed her.
Another case which backfired rather spectacularly involved the seller attempting to officially sell at 60,000 euro in cash sous la table unfortunately for the seller his local Mairie saw the property advertised the extremely low price, decided it was a bargain not to be missed and purchased it under his rights of pre-emption for the local commune.

So all in all both seller & buyer beware handing money sous la table is a very risky way of selling property, for the receiver there is also the problem of spending the money - paying for anything in France using more than 4,000 euro in cash is illegal anyway and paying a large amount of cash into your bank account will sooner or later raise some very unwelcome questions.

What do you think?

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