Right of Pre-emption: Can a Seller Withdraw After the Declaration of Intention to Alienate?

Imagine: you are an owner in Septèmes-les-Vallons. You have received an attractive purchase offer for your house. In accordance with the law, you declare your intention to sell to the town hall (this is called the declaration of intention to alienate, or DIA). But in the meantime, another buyer comes forward with a higher price, or you change your mind. Can you still withdraw? A question any owner may ask, and to which the Court of Cassation provides a clear answer in a judgment of 17 September 2014.

In this decision, the High Court recalls that the DIA is merely an offer to sell, a simple pollicitation in legal terms, which can be withdrawn as long as the municipality has not officially accepted it. In other words, the seller retains control until the last moment. This seems logical, but it has important consequences for municipalities and buyers.

But what happens if the municipality has already notified its decision to pre-empt? And if the seller withdraws before the notification? The judgment of the Court of Cassation of 17 September 2014 (No. 13-21.824) came to decide these questions. Let us decipher this decision and its practical implications for you, owners, tenants or real estate professionals in Marseille, Plan-de-Cuques or elsewhere.

The facts: a story like any other

Mr. X, owner in Septèmes-les-Vallons, decides to sell his property. He sends a declaration of intention to alienate (DIA) to the town hall on 25 March 2004, in accordance with Article L. 213-2 of the Urban Planning Code (which requires the seller to notify his intention to sell to the municipality so that it may exercise its right of pre-emption). The town hall then has two months to respond. But on 1 April, Mr. X changes his mind: he sends a registered letter to the town hall to cancel the sale. This letter is received at the town hall on 3 April. However, on the same day, the town hall notifies Mr. X of its decision to pre-empt the property. Who prevails? The seller's withdrawal or the municipality's pre-emption?

The dispute is brought before the courts. At first instance, the administrative court rules in favour of the municipality, holding that the pre-emption was valid. Mr. X appeals. The Marseille Administrative Court of Appeal, in a judgment of 23 June 2011, annuls the pre-emption decision, considering that the seller's withdrawal, which occurred before the notification of the pre-emption, was valid. The municipality appeals to the Court of Cassation. The Court of Cassation, in its judgment of 17 September 2014, dismisses the appeal and upholds the Court of Appeal's decision.

The judges therefore had to determine the precise moment when the pre-emption becomes effective. Is it the date of sending the notification, its receipt, or another time? And above all, can the seller withdraw up to that moment?

The reasoning of the court — dissected

The Court of Cassation relies on a fundamental principle: the offer to sell (the DIA) is merely a pollicitation, i.e., a revocable offer as long as it has not been accepted. In contract law, an offer may be freely withdrawn before its recipient has accepted it (Article 1116 of the Civil Code, in its wording prior to the 2016 reform, but the principle is the same). Transposed to the right of pre-emption, this means that the seller may renounce his intention to alienate as long as the municipality has not made known its decision to pre-empt. And this decision is only opposable from its notification to the seller (Article R. 213-8 of the Urban Planning Code).

In this case, Mr. X's withdrawal was sent on 1 April and received on 3 April. The municipality notified its pre-emption at the earliest on 3 April. The Court deduces that the pre-emption could not take effect, because at the date of notification (or even before, if one considers the date of sending), the seller had already manifested his intention no longer to sell. The municipality could therefore not pre-empt a property that was no longer for sale.

This reasoning is a strict application of ordinary contract law to administrative law. It confirms previous case law (CE, 1999, Commune de Montreuil) but clarifies it: it is the date of notification of the pre-emption that counts, not the date of the municipality's internal decision. However, beware: if the municipality had notified its pre-emption before the withdrawal, the seller would have been bound. But in our case, the withdrawal preceded the notification.

The judges dismiss the municipality's argument that the pre-emption is perfected as soon as the resolution is adopted by the municipal council. No, replies the Court, as long as the seller has not been informed, he may still withdraw. This is logical: how could a seller be bound by a decision he is unaware of?

What this changes for you — concretely

For landlord owners: you can change your mind after filing a DIA, but only before the municipality notifies you of its pre-emption. For example, if you receive a better offer from a private individual after declaring your intention to sell, you can withdraw your property from sale, provided the town hall has not yet officially pre-empted. But beware: if the town hall has already sent its letter, you are bound. undefined, I have encountered cases where sellers, pressed by an attractive offer, wanted to withdraw after receiving the notification of pre-emption: they were forced to sell to the municipality at the declared price.

For buyers (individuals or developers): be vigilant. If you sign a preliminary contract with an owner, but that owner has already filed a DIA, the municipality can pre-empt. Your preliminary contract is not opposable to the municipality. You can, however, become a buyer if the municipality renounces or if the seller withdraws before the pre-emption. In Plan-de-Cuques, a property developer lost an opportunity because the seller withdrew after receiving a higher offer, but before the municipality pre-empted. The developer could only note the cancellation of the sale.

For tenants: the tenant's right of pre-emption (in the context of the sale of a dwelling) follows similar rules. The landlord may withdraw as long as the tenant has not accepted the offer. But beware, the tenant has a two-month period to accept; if the landlord withdraws during this period, he may be liable for damages if the tenant proves a loss (search costs, etc.).

For municipalities: this decision encourages them to act quickly. As soon as they receive a DIA, they must notify their decision promptly to prevent the seller from withdrawing. A delay of 48 hours can change everything. In practice, some municipalities send the notification on the same day they receive the DIA to secure their pre-emption.

Four tips to avoid this type of dispute

• If you are a seller: only file a DIA if you are truly decided to sell. If you have any doubt, wait until you have a firm offer. A withdrawal may be poorly perceived by the municipality and expose you to proceedings for abuse of right if the municipality proves a loss.
• If you are a buyer: check with the town hall that the seller has indeed filed a DIA and that the municipality has not pre-empted. You can also ask the seller to renounce the DIA (if possible) before signing the preliminary contract.
• If you are a municipality: set up a rapid notification procedure. As soon as you receive the DIA, prepare the decision and notify it without delay. Preferably use registered mail with acknowledgement of receipt to prove the date of notification.
• In case of withdrawal: keep all supporting documents (copy of the withdrawal letter, proof of posting, acknowledgement of receipt). In the event of a dispute, you will need to prove that your withdrawal preceded the notification of the pre-emption.

Further reading: related case law and developments

The judgment of 17 September 2014 is part of a line of decisions that protect the seller's freedom. The Conseil d'État had already ruled in 1999 (Commune de Montreuil) that the DIA is merely a revocable offer. But the Court of Cassation goes further by specifying that the withdrawal may occur until the notification of the pre-emption, even if the decision to pre-empt has already been taken internally. This solution is now constant.

A more recent decision (CAA de Marseille, 2018, No. 16MA04562) recalled that the withdrawal must be express and unequivocal. Mere silence or inaction is not sufficient. Furthermore, if the seller withdraws after signing a preliminary contract with a third party, he exposes himself to damages towards that third party, but this does not affect the validity of the withdrawal vis-à-vis the municipality.

In the future, municipalities might seek a legislative reform to secure their pre-emptions, for example by considering the pre-emption perfected as soon as the resolution is adopted. But for now, the case law is clear: the seller has the last word.

In practice: what to do

Practical FAQ

• Can I withdraw after filing a DIA? Yes, as long as the municipality has not notified you of its decision to pre-empt. Send a registered letter with AR to the town hall to cancel your intention to sell.
• What if the municipality pre-empts after my withdrawal? Challenge the pre-emption before the administrative court. You will have good chances of obtaining its annulment if you prove that your withdrawal is earlier.
• Can the municipality force me to sell if I withdraw? No, if the withdrawal precedes the notification. But if it is later, you are bound to sell.
• What is the deadline to withdraw? The deadline is the municipality's period to pre-empt (generally 2 months). You can withdraw at any time before the notification, even on the last day.
• Are there any costs in case of withdrawal? No direct costs, but you could be ordered to pay damages if the municipality proves a loss (e.g., costs of studying the file).

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