Buy your home
To buy your home you necessarily need to sign a contract in front of a notary. But which forms exist and which are their pros and cons?
In practice two contracts get used: the purchase contract and the right of purchase.
The purchase contract has the feature of ending immediately the pact between seller and buyer. With the signing, the parties declare to sell, respectively to buy.
In the contract they arrange the clauses of the purchase, such as the object of the contract (number of cadastral maps, possible furniture sold with the house, rights and charges bound to the property), the price, the warranty on the sold building, the moment of the change of ownership. With the signing of the contract the parties are bound to the buy. In principle, nobody can break free from the agreement.
The right of purchase, on the other hand, allows the beneficiary a buying option.
While the owner who allows the right of purchase remains bound to the contract (and can’t break free from his promise for the agreed period), the beneficiary can decide whether to exercise the right of purchase or not. If he doesn’t exercise such right, it lapses and the owner is newly free to dispose of its own fund. If, to the contrary, the beneficiary exercises this right, he will become owner of the fund.
In the contract the parties arrange the clauses analogically to the purchase contract, defining the conditions under which the purchase will take place. Beyond this, a duration must be settled for the right of purchase (from a few months until a maximum of 10 years). Although it isn’t a necessary element, the parties stipulate regularly a deposit and withdrawal penalty, that normally amounts to 10-20% of the purchase price, which gets paid in at the moment of the signing of the contract, that is valid as deposit on the price if the right gets exercised. If the right doesn’t get applied, the deposit remains of relevance of the seller, as withdrawal penalty for the failed practice.
The choice of the type of contract depends therefore in most cases on the situation of who buys. If he has to sell his house to buy a new one, if he’s unsure about the purchase, then it’s worth to stipulate the right of purchase. The same if the building isn’t finished: the seller can end its construction, having a commitment (and obviously a deposit) by the potential buyer, and the latter guarantees the purchase, for the case in which the house is to his liking, at the end of the construction.
In all other cases it’s preferable to stipulate a purchase contract.