Before going to the notary, the seller and the buyer often wish to formalise their agreement in writing They proceed to the signature of a preliminary sales agreement.
The aim is to agree on the principle of a sale, with a view to protecting oneself in the event of a change of mind by one of the parties, while waiting for the notary's office.

The conditions at the signing of the preliminary sales agreement

The establishment and signing of a provisional sale agreement is subject to 2 conditions:

• the seller must have the legal capacity to sell the property, and the buyer must have the legal capacity to buy it;
• the thing and the price must be determined.

"The notarial deed drawn up makes the private agreement signed between the parties enforceable against third parties. Failure to complete this formality in no way removes the definitive and binding nature of the preliminary sales agreement, which in principle cannot be withdrawn.

In Luxembourg, however, it is not compulsory to sign a preliminary sales agreement: the seller and the buyer can go to the notary's office without having first concluded a preliminary sales agreement.
But beware of the risk to the buyer, as he could lose the option he might have had on the property.

Registration of the compromise

In principle, preliminary sales agreements for real estate must be registered with the Land Registry. A non-professional in the real estate sector must submit the preliminary sales agreement to the registration office within 3 months from the day of signing.

In practice, however, many sales agreements are not registered. However, the failure to register the agreement does not affect its validity.
However, registration secures the agreement between the seller and the buyer in the event of non-compliance with the agreement in the preliminary sales agreement.

The filing of a compromise at the offices of the Administration de l'Enregistrement et des Domaines involves registration fees. For compromises that contain a suspensive clause - such as the application for a bank loan - the registration fee is 12 euros.
For compromises that do not contain a suspensive clause, the registration fee is 7 % on the sale price.

The registration fees are to be paid by the person filing the preliminary sales agreement.

Find here our articles and advice on property sale in Luxembourg.