The urban right of pre-emption is an option offered to a public authority or delegated body to acquire a property offered for sale on a priority basis. This pre-emptive right takes precedence over those granted to private individuals.
Urban pre-emption rights can be used to carry out development projects that are in the public interest. This is the case, for example, for the construction of public facilities, the fight against insalubrity or the preservation or enhancement of built or unbuilt heritage and natural areas.
Only the municipal council or the deliberative body of the public institution for inter-communal cooperation can create an urban pre-emption right (DPU).
Urban pre-emption rights may be introduced in all or part of urban or urban-development zones.
When a property is partially located in a zone subject to urban pre-emption rights, only the portion located in the said zone may be pre-empted. In such cases, it is not possible to pre-empt the entire property. However, the seller may oblige the municipality to pre-empt the entire land unit.
Conversely, the beneficiary of the DPU may not pre-empt only part of the said unit if it is located entirely within the zone subject to the right of pre-emption.
It should be noted that in the event of partial pre-emption, the judge will have to set the transfer price taking into account any depreciation that the division may cause to the non-pre-empted part.
Scope of urban pre-emption rights
The urban right of pre-emption(DPU) applies to transfers for valuable consideration, i.e. all out-of-court sales (life annuity, forward sale, sale with right of redemption, etc.), contributions to a company, sales by auction, exchanges, transfers of a tantième of land in exchange for the handing over of premises to be built on, or licitations (unless the acquisition is made by a co-owner).
A donation will therefore not be subject to the urban pre-emption right (DPU).
All types of property may be subject to the DPU: land, houses or co-ownership lots.
It should be noted that in the event of ownership dismemberment, only the sale of bare ownership is subject to urban pre-emption rights.
Except in the case of a reinforced DPU, the urban pre-emption right does not apply in certain cases provided for by law in article L211-4 of the Code de l'urbanisme. The DPU does not apply to
a) To the disposal of one or more lots consisting of a single premises used for residential purposes, for professional purposes or for professional and residential purposes, or by such premises and their ancillary premises, or by one or more premises ancillary to such premises, included in a building that is effectively subject, at the date of the proposed disposal, either as a result of the total or partial division of an allotment company, or for at least ten years in cases where the co-ownership is not the result of such a division, with the date of publication of the co-ownership regulations in the mortgage office constituting the starting point of this period;
b) On the transfer of units or shares in companies referred to in Titles II and III of Law no. 71-579 of 16 July 1971 and giving entitlement to the allocation of residential premises, professional premises or mixed premises and any ancillary premises;
c) In the event of the sale of a house, apartment building or co-ownership lot, if the property was completed less than ten years ago. This period runs from the declaration of completion of the work.
d) On the sale of the majority of shares in a non-trading property company (société civile immobilière), where the assets of this company consist of a unit of land, whether built-up or not, the sale of which would be subject to the right of pre-emption. This paragraph does not apply to non-trading property companies set up exclusively between relatives and relations up to and including the fourth degree.
These situations, in which the DPU is excluded, must be qualified in the case of a reinforced urban right of pre-emption (DPU renforcé).
A specially reasoned decision by the municipal council may provide for an urban pre-emption right to be exercised, even in one of the cases described above.
This is known as a reinforced urban pre-emption right (DPU renforcé). This reinforced right may apply to all or part of the municipality.
Procedures relating to urban pre-emption rights
You can find out whether a property is covered by a simple or reinforced right of pre-emption by asking the local authority, for example by requesting a planning certificate.
If the property is subject to an urban pre-emption right, it must be purged before it can be sold for valuable consideration.
Therefore, between the preliminary sale agreement and the final sale, the notary notifies the municipality or body with the right of pre-emption of a declaration of intent to sell (DIA).
This DIA must indicate the sale price (breaking down the price between the property and the furniture), the conditions, the payment terms, the location and whether the property is encumbered by rights in rem.
If the price, the size of the plot or the terms and conditions change, a new declaration of intent to sell must be made.
Once the DIA has been received, the beneficiary of the urban pre-emption right has a fixed period of two months in which to make its position known.
The municipality may issue an express decision to refuse to pre-empt before the end of the two-month period in order to authorise the sale.
If there is no response within the two-month period, the right of pre-emption is validly exercised and the sale can go ahead.