{"id":15020,"date":"2026-04-01T08:00:00","date_gmt":"2025-06-15T20:44:13","guid":{"rendered":"https:\/\/solent-avocats.com\/vente-remere-guide-juridique-pratique\/"},"modified":"2026-04-09T07:49:47","modified_gmt":"2026-04-09T06:49:47","slug":"vente-remere-practical-legal-guide","status":"publish","type":"post","link":"https:\/\/solent-avocats.com\/en\/vente-remere-guide-juridique-pratique\/","title":{"rendered":"Sale with right of redemption: a legal and practical guide for professionals"},"content":{"rendered":"

Published on 15 June 2025. Updated on 1 April 2026 - consolidation of sale with right of repurchase.<\/em><\/p>\n\n\n

Sale with option to repurchase (vente \u00e0 r\u00e9m\u00e9r\u00e9) - also known as sale with option to repurchase (vente avec facult\u00e9 de rachat) or portage immobilier (portage immobilier) - is a legal mechanism that allows owners in financial difficulty to temporarily sell their property while retaining the right to repurchase it. Covered by articles 1659 to 1673 of the French Civil Code, this operation offers an alternative to seizure of the property for owners who are no longer able to pay their debts. This article explains in detail how the sale with right of repurchase works, the stages involved, the advantages, the risks and the legal framework.<\/p>\n\n

What is a sale with right of redemption? Legal definition<\/h2>\n\n

A sale with right of redemption (vente \u00e0 r\u00e9m\u00e9r\u00e9) is a sale of real estate that includes a clause giving the seller the right to buy back the property within a specified period. Article 1659 of the Civil Code defines it as follows: \u00abThe repurchase option is an agreement by which the seller reserves the right to take back the thing sold, in return for restitution of the principal price and the repayment referred to in article 1673.\u00bb<\/i><\/p>\n\n

In practical terms, an owner in difficulty sells his property to an investor and immediately receives the sale price, but retains the exclusive right to buy back the property within a period that cannot exceed five years (article 1660 of the French Civil Code). During this period, the seller can continue to occupy the property by paying a monthly occupancy indemnity to the buyer.<\/p>\n\n

Sale with right of repurchase and real estate portage: the same operation<\/h3>\n\n

The term \u00abportage immobilier\u00bb is a commercial synonym for vente \u00e0 r\u00e9m\u00e9r\u00e9. The two terms refer to the same legal transaction, governed by the same articles of the Civil Code. Portage immobilier is simply the name used by specialist organisations to designate sale with option to repurchase applied to residential property. Whatever the name, the legal framework is identical.<\/p>\n\n

The legal nature: a sale subject to a resolutory condition<\/h3>\n\n

In legal terms, a vente \u00e0 r\u00e9m\u00e9r\u00e9 is a sale subject to a resolutory condition. Ownership is transferred immediately: the buyer becomes the full owner as soon as the deed is signed. However, if the seller exercises his right to repurchase within the agreed period, the sale is cancelled retroactively. Everything then takes place as if the sale had never taken place.<\/p>\n\n

This legal nature has been confirmed by the case law of the Cour de cassation. It is not a question of two successive sales, but of a single sale, the exercise of which constitutes a resolutory condition - a special case of a so-called \u00abpotestative\u00bb condition (dependent on the will of a single party), which the law expressly authorises in the case of repurchase agreements.<\/p>\n\n

How does a sale with right of redemption work? The practical steps<\/h2>\n\n

Step 1 - Valuing the property and agreeing terms<\/h3>\n\n

The owner has the property valued, usually by an independent expert. The sale price under the repurchase option is lower than the market value: a discount of 20 to 40 % is required to compensate for the risk taken by the investor and the constraint of the repurchase option. The parties agree on the sale price, the repurchase price (which may be different), the duration of the repurchase option and the amount of the monthly occupancy indemnity.<\/p>\n\n

Step 2 - Signature at the notary's office<\/h3>\n\n

A sale with right of redemption of a property must be formalised in a notarial deed. The deed must expressly mention the buy-back clause, its duration, the buy-back price and the conditions for occupying the property. The notary then publishes the deed in the property register (Service de publicit\u00e9 fonci\u00e8re). This publication is essential: under article 1673 of the Civil Code, this formality is a precondition for the sale with right of repurchase being enforceable against third parties.<\/p>\n\n

Stage 3 - Period of occupancy and monthly allowance<\/h3>\n\n

Throughout the term of the repurchase agreement, the seller may continue to occupy the property by paying a monthly occupancy fee to the buyer. This compensation, which is comparable to rent, remunerates the purchaser for the use of the property that he or she has become the owner of. The amount is freely determined by the parties in the notarial deed. The Court of Cassation has confirmed the validity of this mechanism in several rulings (Cass. civ. 3e<\/sup>, 21 May 2014, no. 12-23.607; Cass. civ. 3e<\/sup>, 1er<\/sup> Oct. 2020, no. 19-17.668).<\/p>\n\n

During this period, the purchaser is the legal owner of the property. He or she is responsible for the property charges (property tax, major works), while the vendor-occupier is responsible for the day-to-day charges associated with occupancy.<\/p>\n\n

Stage 4 - Exercising the buy-back or losing the property<\/h3>\n\n

At the end of the repurchase period, there are two possible scenarios:<\/p>\n\n

    \n
  • The seller exercises his right to repurchase<\/strong> The buyer pays the purchaser the agreed purchase price, plus the costs stipulated in article 1673 of the French Civil Code (selling costs, necessary repairs, improvements). The buyer then recovers the property free of any charges set up by the purchaser, provided that the repurchase agreement has been published in the property register. The sale is deemed never to have existed (retroactive effect). ab initio<\/i>).<\/li>\n
  • The seller does not repurchase within the deadline<\/strong> The buyer loses his right of redemption definitively and irrevocably. The purchaser becomes the definitive owner. Article 1661 of the Civil Code is unambiguous: \u00abThe term set is mandatory and cannot be extended by the judge.\u00bb<\/i> If the seller remains on the premises after the expiry of the time limit, he becomes an occupier without right or title and is liable to pay occupancy compensation (Cass. civ. 3e<\/sup>, 8 Dec. 2016, no. 15-27.762).<\/li>\n<\/ul>\n\n

    Sale with right of repurchase: a numerical example<\/h2>\n\n

    Let's take a concrete example to illustrate how a sale with right of redemption works:<\/p>\n\n

      \n
    • The starting situation<\/strong> A property owner owns a flat valued at \u20ac300,000. He has debts of \u20ac150,000 and is subject to seizure proceedings.<\/li>\n
    • Selling price under a repurchase agreement<\/strong> 210,000 (30 % discount to market value).<\/li>\n
    • Use of funds<\/strong> The \u20ac210,000 is used to repay debts (\u20ac150,000), pay notary fees (~\u20ac15,000) and the commission of the repurchase agency (~\u20ac15,000). The balance (~\u20ac30,000) remains available for the seller.<\/li>\n
    • Occupancy allowance<\/strong> 1,200\/month paid to the investor during the repurchase period.<\/li>\n
    • Duration<\/strong> 24 months to exercise the buyback option.<\/li>\n
    • Buyback price<\/strong> 240,000 (sale price + investor's remuneration).<\/li>\n
    • Conclusion<\/strong> The owner improves his financial situation, obtains a new mortgage and buys back his property for \u20ac240,000 before the 24 months expire.<\/li>\n<\/ul>\n\n

      In this example, the owner avoided foreclosure, retained the use of his home and bought back his property at a total cost lower than that of a compulsory sale followed by a market buyback.<\/p>\n\n

      Advantages and disadvantages of repurchase agreements<\/h2>\n\n\n\n\n
      Benefits<\/th>Disadvantages<\/th><\/tr>\n<\/thead>\n
      Avoids foreclosure and its consequences (registration on the FICP, sale at auction at knock-down prices)<\/td>Sale price below market value (discount of 20 to 40 %)<\/td><\/tr>\n
      The seller remains in the property throughout the repurchase period<\/td>Monthly occupancy indemnity to be paid in addition to the purchase price<\/td><\/tr>\n
      Possibility of buying back the property and regaining full ownership<\/td>Risk of losing the property permanently if the buyback is not exercised within the time limit<\/td><\/tr>\n
      Rapid access to cash to pay off debts<\/td>Significant costs: notary, agency commission, occupancy indemnity, etc.<\/td><\/tr>\n
      Transaction governed by the Civil Code (art. 1659 to 1673) and carried out before a notary<\/td>Difficulty in obtaining new financing for the buyback within the time allowed<\/td><\/tr>\n
      No entry in the payment incident file<\/td>Significant discount which reduces the funds actually available<\/td><\/tr>\n<\/tbody>\n<\/table>\n\n

      What are the risks and dangers of repurchase agreements?<\/h2>\n\n

      The risk of losing your property for good<\/h3>\n\n

      This is the main risk. If the seller is unable to raise the funds needed to buy back the property before the deadline expires, he loses all rights to the property. The time limit is mandatory: article 1661 of the Civil Code prohibits the judge from extending it. Article 1663 specifies that this period runs against all persons, even minors. It is therefore crucial to ensure that the refinancing plan is realistic before committing yourself.<\/p>\n\n

      The risk of reclassification as a disguised loan<\/h3>\n\n

      When a sale with right of redemption is used as a simple financing tool - the investor has no intention of keeping the property - it may be reclassified by the courts as a pignorative contract, i.e. a loan of money secured by a transfer of ownership. The Court of Cassation has specified the criteria for this reclassification in a landmark ruling: the concomitance of a deed of loan and a deed of sale, combined with a usurious repurchase price, may justify the annulment of the arrangement (Cass. civ. 3e<\/sup>, 21 May 2014, no. 12-23.607, published in the Bulletin).<\/p>\n\n

      Similarly, a low sale price - i.e. a price that is clearly derisory in relation to the real value of the property - is an additional indicator of requalification (Cass. civ. 3e<\/sup>, 24 June 2021, no. 18-19.771).<\/p>\n\n

      The trap of usurious financial terms<\/h3>\n\n

      A clause providing for a repurchase price different from the sale price is in principle valid (Cass. civ. 3e<\/sup>, 4 Oct. 2018, no. 17-21.894). However, if the increase in the purchase price compared to the sale price, combined with the occupancy indemnities paid, results in a total cost exceeding the usury rate applicable to home loans, the transaction may be requalified. The Court of Cassation, sitting as a section, confirmed this principle (Cass. civ. 3e<\/sup>, 1er<\/sup> Oct. 2020, no. 19-17.668).<\/p>\n\n

      The costs of a sale with right of repurchase<\/h2>\n\n

      Notary fees<\/h3>\n\n

      As a sale with right of redemption is a notarised deed, it incurs notary fees. These are generally between 2 and 3 % of the sale price for the initial sale, and between 1 and 2 % for the repurchase. These costs are lower than for a conventional sale, because certain transfer taxes do not apply due to the resolutory nature of the transaction.<\/p>\n\n

      Occupancy allowance<\/h3>\n\n

      The occupancy indemnity is the \u00abrent\u00bb paid by the vendor to the purchaser for continuing to occupy the property during the repurchase period. The amount is freely negotiated between the parties and varies according to the rental value of the property. In practice, it represents between 3 and 5 % of the sale price on an annual basis. Case law cites amounts of \u20ac550\/month for a studio (Cass. civ. 3e<\/sup>, 21 May 2014, no. 12-23.607) to \u20ac2,100\/month for a property complex (Cass. civ. 3e<\/sup>, 15 March 2018, no. 16-28.537).<\/p>\n\n

      The commission of the repurchase agency<\/h3>\n\n

      If a specialist organisation acts as an intermediary, it generally receives a commission of between 5 and 10 % of the sale price. This commission covers the search for investors, the legal arrangements and support for the seller. If there is no intermediary - in particular when a lawyer structures the transaction directly - this commission is not payable.<\/p>\n\n

      The legal nature of repurchase agreements: resolutory condition and retroactive effect<\/h2>\n\n

      Retroactive effect (ab initio<\/i>) of the buyback exercise<\/h3>\n\n

      When the seller exercises his option to repurchase, the cancellation of the sale takes effect with full retroactive effect, as described below. ab initio<\/i> (from the beginning). The seller is deemed never to have ceased to own the property. The purchaser is deemed never to have been the owner.<\/p>\n\n

      The practical consequences are considerable:<\/p>\n\n

        \n
      • All encumbrances and mortgages created by the purchaser during the repurchase period are cancelled, provided that the repurchase agreement was published in the property register before these encumbrances (article 1673 of the Civil Code).<\/li>\n
      • From a tax point of view, if the buyback takes place in the same financial year as the sale, any capital gains are cancelled. If the repurchase takes place in a subsequent financial year, tax neutralisation mechanisms allow the initial taxation to be offset.<\/li>\n
      • The seller is obliged to perform the leases granted without fraud by the purchaser during the period (article 1673 in fine).<\/li>\n<\/ul>\n\n

        Rights and obligations during the repurchase period<\/h3>\n\n

        For the duration of the agreement, the purchaser is the true owner of the property. He or she may collect the proceeds (rental income if the property is let to a third party) and exercise all the rights attached to ownership. The seller, on the other hand, has only a right of claim: the right to take back the property by repaying the price and costs stipulated by law.<\/p>\n\n

        Article 1673 of the Civil Code sets out the obligations of the seller who exercises the repurchase right: \u00abThe seller who makes use of the repurchase agreement must reimburse not only the principal price, but also the expenses and fair costs of the sale, the necessary repairs, and those which have increased the value of the land, up to the amount of this increase. He may not take possession until he has fulfilled all these obligations.\u00bb<\/i><\/p>\n\n

        Sale with right of repurchase and taxation<\/h2>\n\n

        Treatment of capital gains<\/h3>\n\n

        At the time of the initial sale, the seller recognises a capital gain on the property that is taxable under ordinary law (income tax at the rate of 19 % + social security contributions of 17.2 %, with deductions for the length of time the property has been held). If the seller exercises his buyback option during the same tax year, the capital gain is cancelled retroactively. If the buyback takes place in a subsequent tax year, a neutralisation mechanism is used to offset the initial taxation.<\/p>\n\n

        The difference between sale price and buy-back price<\/h3>\n\n

        The difference between the sale price and the repurchase price is treated for tax purposes as remuneration for a financial service. For the seller, it is an expense. For the buyer, it constitutes taxable income. The occupancy indemnity is taxed as property income for the purchaser.<\/p>\n\n

        Sale with right of repurchase of financial securities and other distinctions<\/h2>\n\n

        The \"r\u00e9m\u00e9r\u00e9\" mechanism does not only apply to real estate. It is also used on the financial markets for the temporary transfer of securities. The legal principles are the same - sale subject to a resolutory condition - but the practical and tax implications differ. In principle, securities transactions are exempt from VAT.<\/p>\n\n

        R\u00e9m\u00e9r\u00e9 vs tied transaction<\/h3>\n\n

        A tied transaction combines a cash sale with a commitment to resell at a future date. The fundamental difference lies in the way it is unwound: a r\u00e9m\u00e9r\u00e9 transaction cancels the initial sale with retroactive effect (rescission), whereas a linked transaction involves a second sale, a new transfer of ownership. The consequences in terms of transfer tax and capital gains are therefore radically different.<\/p>\n\n

        R\u00e9m\u00e9r\u00e9 vs repurchase agreements<\/h3>\n\n

        A repo, as defined by the French Monetary and Financial Code, involves a reciprocal and irrevocable commitment by both parties: one to sell and the other to buy back. The outcome is certain. With a repurchase agreement, only the seller has an option - the buyer is subject to the decision without being able to oppose it or bring it about. The outcome is therefore uncertain, subject only to the seller's will.<\/p>\n\n

        R\u00e9m\u00e9r\u00e9 vs securities lending<\/h3>\n\n

        Securities lending is a consumer loan contract involving fungible goods. The borrower must not return the securities loaned, but securities of the same kind and in the same quantity. A sale with right of redemption, on the other hand, is a sale whose cancellation results in the return of the goods initially sold. There is no sale price in a loan, but the lender is remunerated. The legal and tax regimes are completely different.<\/p>\n\n

        Frequently asked questions<\/h2>\n\n

        What is a sale with right of redemption in simple terms?<\/h3>\n

        This is a temporary sale: you sell your property to an investor, you continue to live there by paying an occupation allowance, and you have the right to buy it back within a maximum of five years. If you exercise this right, the sale is cancelled and you become the owner again as if nothing had happened.<\/p>\n\n

        Which article of the Civil Code governs the sale with right of redemption?<\/h3>\n

        Sale with right of redemption is governed by articles 1659 to 1673 of the Civil Code, in the section entitled \u00abDe la facult\u00e9 de rachat\u00bb. Article 1659 gives the definition, article 1660 sets the maximum term at five years, article 1661 establishes the mandatory nature of the time limit, and article 1673 sets out the financial obligations of the seller who repurchases.<\/p>\n\n

        What is the maximum duration of a sale with right of repurchase?<\/h3>\n

        The law imposes a maximum term of five years for the buy-back option (article 1660 of the French Civil Code). If the contract provides for a longer period, it is automatically reduced to five years. In practice, property repurchase agreements are generally concluded for a period of 6 to 24 months.<\/p>\n\n

        What happens if the seller does not buy back within the time limit?<\/h3>\n

        The seller definitively and irrevocably loses his right to repurchase. The purchaser becomes the definitive owner. The judge cannot extend the time limit (article 1661). If the seller remains on the premises, he becomes an occupier without right or title and must pay occupancy compensation until he leaves (Cass. civ. 3e<\/sup>, 8 Dec. 2016, no. 15-27.762).<\/p>\n\n

        Who owns the property during the repurchase period?<\/h3>\n

        The purchaser is the full owner of the property for the duration of the agreement. He or she bears the costs of ownership and may, in theory, dispose of the property. The seller is merely an occupier authorised by agreement, with a right of claim (the right to repurchase).<\/p>\n\n

        Is a sale with right of redemption a disguised loan?<\/h3>\n

        Legally, no. Sale with right of redemption is an agreement expressly recognised by the Civil Code. However, if the transaction in fact conceals a loan of money secured by a transfer of ownership - in particular where a loan deed is concluded at the same time and the terms of the repurchase are usurious - judges may reclassify it as a pignorative contract and annul it (Cass. civ. 3e<\/sup>, 21 May 2014, no. 12-23.607).<\/p>\n\n

        Is the buy-back price always the same as the sale price?<\/h3>\n

        No. The parties are free to agree a redemption price that differs from the sale price. The redemption price is generally higher in order to remunerate the investor for the immobilisation of his funds and the risk taken. This practice is validated by case law, provided that the increase is not usurious (Cass. civ. 3e<\/sup>, 4 Oct. 2018, no. 17-21.894).<\/p>\n\n

        What are the notary fees for a sale with right of repurchase?<\/h3>\n

        Notary fees amount to approximately 2 to 3 % of the sale price on the initial sale, then 1 to 2 % on the repurchase. These fees are lower than those for a conventional property sale (7 to 8 %) because of the resolutory nature of the transaction.<\/p>\n\n

        How do I sell my house under a repurchase agreement?<\/h3>\n

        There are four stages to the process: (1) have the property valued by an expert, (2) find an investor (either directly or via a specialist organisation), (3) sign the notarial deed with the buy-back option clause, and (4) pay the monthly occupancy indemnity while preparing the refinancing to carry out the buy-back within the agreed period. The assistance of a lawyer is recommended to ensure that the financial terms are balanced.<\/p>\n\n

        Is a sale with right of repurchase possible for a property that has been seized?<\/h3>\n

        Yes, this is one of its main uses. A vente \u00e0 r\u00e9m\u00e9r\u00e9 allows the owner to sell his or her property voluntarily before a compulsory auction, which is generally held at a price well below the market value. However, the sale with right of repurchase must take place before the auction judgement is issued.<\/p>\n\n

        What is a clause de r\u00e9m\u00e9r\u00e9?<\/h3>\n

        The clause de r\u00e9m\u00e9r\u00e9 is a contractual stipulation, inserted into the notarised deed of sale, by which the seller reserves the right to buy back the property sold within a specified period. This clause must be included in the initial deed of sale - it cannot be added later in a separate deed.<\/p>\n\n

        Can the seller be evicted during the repurchase period?<\/h3>\n

        In principle, no, as long as the seller complies with the terms of the occupancy agreement (payment of compensation, maintenance of the property). The occupancy agreement is a separate, binding contract. However, repeated non-payment of the occupancy indemnity may be grounds for terminating the agreement, exposing the seller to eviction proceedings.<\/p>\n\n

        Sources<\/h2>\n