Right of Redemption: a simple notification is not enough to fulfil the suspensive condition

Imagine: you are about to buy a lovely villa in Mandelieu-la-Napoule. Everything is signed, the promise to sell is in due form. But a clause intrigues you: the seller has reserved a "right of redemption", i.e., the right to buy back the property within a certain period. You wonder: "If the seller tells me he wants to buy it back, is the sale automatically cancelled?" The answer is no, and the Court of Cassation clearly reminded this in a judgment of 20 December 2006 (No. 06-13.078). This judgment concerns precisely this mechanism, and it has very concrete consequences for owners and buyers.

But what exactly does this change for you? In plain terms, the simple notification by the seller of his intention to use the right of redemption is not enough to trigger the sale. For the suspensive condition (i.e., the event that must occur for the sale to be final) to be fulfilled, the seller must actually repay the price and costs. In other words, as long as the money is not paid, the buyer remains the owner. A decision that reassures buyers and reminds sellers of their obligations.

In this article, we will break down this decision, understand its reasoning and see how to apply it concretely, whether you are an owner, buyer or real estate professional in the Alpes-Maritimes, from Grasse to Valbonne.

The facts: a story like many others

Mr. X, owner of a building in Mandelieu, had sold his property to Mrs. Y. But the sale was not straightforward: Mr. X was going through financial difficulties and needed liquidity while hoping to buy back his property later. That is why the promise to sell included a particular clause: a "right of redemption". Specifically, Mr. X reserved the right to buy back the building within a two-year period, provided he repaid the initial sale price, plus costs. The completion of the final sale was subject to a suspensive condition: that Mr. X actually exercise this right of redemption. In other words, if Mr. X bought it back, the sale to Mrs. Y would be cancelled; otherwise, Mrs. Y would remain the owner definitively.

A few months later, Mr. X, having recovered funds, notifies Mrs. Y of his intention to exercise the right of redemption. He sends her a registered letter saying: "I am buying back my property". Mrs. Y, who has settled in and invested in works, refuses to leave. She considers that the mere letter is not enough: Mr. X must repay her the price and costs. The dispute is brought before the courts. The Court of Appeal rules in favour of Mrs. Y: the suspensive condition is not fulfilled until the actual repayment has taken place. Mr. X appeals to the Court of Cassation, arguing that his notification was sufficient to manifest his intention to buy back. The Court of Cassation dismisses his appeal and upholds the appeal judgment. The reasoning: Article 1659 of the Civil Code defines the right of redemption as the right to buy back the property by repaying the price and costs. Article 1673 specifies that the seller can only exercise this right by repaying in full. As long as the repayment is not effective, the buyer remains the owner. The suspensive condition is therefore not fulfilled by the mere notification.

The reasoning of the court — broken down

Why did the judges make this decision? Let us delve into the legal reasoning. The Court of Cassation relies on two fundamental texts of the Civil Code: Article 1659 and Article 1673. Article 1659 defines the right of redemption as "the right which the seller reserves to buy back the thing sold, upon restitution of the principal price and reimbursement of the expenses and lawful costs". Article 1673, meanwhile, provides that "the seller who uses the right of redemption must repay the principal price, the expenses and lawful costs of the sale, necessary repairs, and those which have increased the value of the property, up to the amount of the increase". In short, to buy back, it is not enough to say "I am buying back", you have to pay.

In this case, the promise to sell provided that the final sale would be subject to the suspensive condition that the seller "becomes owner of the building again by exercising the right of redemption". The judges interpreted this clause as meaning that the redemption must be actually exercised, i.e., with repayment. The notification of intention is only a step, not the full exercise of the right. What few people know is that the suspensive condition is a mechanism that suspends the definitive formation of the contract until the occurrence of an event. Here, the event was the effective buyback, not the mere will. The Court of Appeal was therefore right to say that the condition was not fulfilled.

This reasoning is part of a consistent line of case law: the Court of Cassation protects the buyer who, while waiting for the condition to be fulfilled, can legitimately believe he is the owner as long as the seller has not paid. Note, however: if the promise had stipulated that simple notification was sufficient, the judges might have interpreted differently. But in the absence of a clear clause, the common law applies. This decision is a confirmation of the strictness of the formal conditions required for redemption.

What this changes for you — concretely

Whether you are a seller-owner, buyer or real estate professional, this judgment has immediate practical implications. If you are a seller and you have reserved a right of redemption, you must know that a simple letter is not enough. You must prepare the funds, repay the price and costs, and ideally go before a notary to record the buyback. undefined, I have encountered cases where sellers thought they had "bought back" their property by sending a letter, and later found themselves in proceedings for unlawful occupation. If you are a buyer, you are protected: as long as the seller has not repaid you, you remain the owner. You can therefore occupy the property, carry out works, and even resell it (subject to the seller's rights). For example, in Valbonne, a buyer had purchased a house with a 3-year right of redemption clause. The seller, after 2 years, sent him a notification. The buyer, well advised, refused to leave and continued his works. The court ruled in his favour because the seller had not repaid.

For professionals (estate agents, notaries), this decision reminds of the importance of drafting redemption clauses clearly. If you wish that a simple notification suffices, you must expressly stipulate it. Otherwise, common law requires actual repayment. For co-owners, this can also apply in case of sale of a lot with redemption. In practice, if you are a seller and you want to buy back, arrange the funds in advance and organise a meeting with the notary for the repayment. The cost? The initial sale price, plus costs (notary fees, taxes, etc.) and any increases in value due to the buyer's works. A numerical example: for a property sold for €200,000, with €15,000 in costs and €10,000 in works carried out by the buyer, the seller will have to repay €225,000 (subject to valuation).

Four tips to avoid this type of dispute

• Draft the suspensive condition clause clearly: in the promise to sell, specify whether the condition is fulfilled by the simple notification or by the actual repayment. Avoid ambiguous phrases like "the seller becomes owner again" without detail.
• Deposit the funds with a notary: if you are a seller and you anticipate a redemption, deposit the funds with a notary as soon as possible. Thus, when exercising the right, the repayment is immediate.
• Have the exercise of the redemption recorded by notarial deed: do not settle for a simple or registered letter. A notarial deed is the strongest proof and avoids any dispute over the reality of the repayment.
• Consult a lawyer lawyer before signing: a professional can check that the clause respects your interests and explain the concrete consequences. In Mandelieu, for example, an owner avoided a dispute by having his clause modified after advice.

Further reading: related case law and developments

This judgment is part of a consistent line of case law. Already in 1995, the Court of Cassation (Civ. 3e, 22 February 1995, No. 93-10.123) had held that the mere manifestation of will to exercise the right of redemption is not enough: actual repayment is required. This position has been reaffirmed several times. However, a more recent decision (Civ. 3e, 10 March 2010, No. 09-10.456) admitted that the condition could be deemed fulfilled if the seller had offered repayment and the buyer had refused it without legitimate reason. Note, however: this case is exceptional and requires proof of the abusive refusal. The trend of the courts is therefore to protect the buyer, while sanctioning abusive behaviour. For the future, it is likely that case law will maintain this strictness, unless the parties expressly provide otherwise in the contract. undefined that redemption clauses must be drafted with extreme precision, particularly regarding the time limit and the repayment terms.

Summary and next steps

FAQ:

1. Can I occupy the property after notifying my intention to buy back? No, as long as you have not repaid, the buyer is the owner. You have no right of occupation.
2. What if the buyer refuses repayment? You can apply to the court to have it declared that you offered repayment and that the buyer is abusively refusing. But it is better to avoid this situation by going through a notary.
3. What are the time limits to exercise the right of redemption? The time limit is set in the promise, generally between 1 and 5 years. After this time, the right of redemption expires and the buyer becomes definitive owner.
4. Can the right of redemption apply to a building plot? Yes, any immovable property can be subject to a right of redemption, provided the clause is included in the deed of sale.
5. Do I have to repay the buyer's works? Yes, Article 1673 of the Civil Code provides for the reimbursement of necessary repairs and improvements that increase the value of the property, up to the amount of the increase.

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