When a preliminary sale agreement has first been concluded, signing the final deed of sale is just the next logical step which formalizes the purchase. Both parties, already bound to comply with the terms of the agreement since they signed the first document, ratify their agreement before a notary. The latest guarantees that all the details of the sale comply with the law. Let’s focus on a crucial meeting for the seller!
What is the role of the deed of sale?
While the preliminary sale agreement can be drafted without appealing to a notary and remains an optional procedure, the deed of sale is a mandatory step that shall finalise any property sale/purchase.
Even if the preliminary sale agreement was communicated to the Administration de l’enregistrement et des domaines (Luxembourg Registry), the purchase will only be official after the registration and transfer of ownership; these two procedures can only be performed by a notary. After signing the deed of sale, each party shall receive at least one copy of the document. This document shall be kept as it proves that the property was duly transferred from one person to another. It will be needed to protect the parties in case of dispute as it is an official and notarial deed, as underlined by its name.
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Is the transfer of ownership effective after the sale agreement or after the deed of sale?
Theoretically, upon signing the sale agreement, the buyer becomes the owner of the property, even if the payment was not made and there was no notarial deed yet.
Nevertheless, the buyer does not systematically become the owner upon signing the sale agreement, notably if the latest includes one or several suspensive clauses. In case there is a clause related to the funding of the purchase, the buyer becomes the official owner when the loan is granted; yet, the transfer is registered retrospectively at the date of the sale agreement.
It is highly recommended to include a clause in the sale agreement providing that the transfer of ownership and usufruct shall only be effective upon signing the deed of sale before a notary and once the selling price has been paid off.
How does the the signing of the deed of sale take place?
The signing of the deed of sale always takes place after the notary has read in full the document. This moment is key and we recommend to listen carefully to make sure that all the items of the deed are duly similar to what was initially agreed. It is still possible at this point to report details that need to be amended — or to ask questions to the attending professional.
It is highly recommended to request that the draft document be sent prior to the meeting with the notary so as to give each party enough time to carefully and calmly review the content.
Upon signing the deed of sale, the buyer shall, as a rule, pay the price agreed in the sale agreement or, if he has already paid a compensation, pay the remaining part to cover the total of the selling price.
“Upon signing the deed of sale, the buyer shall pay the price agreed in the sale agreement.”
In most cases, this is when the keys of the property are handed over to the new owner: then on, he can exercise his full rights, while the buyer who receives the money is no longer allowed to enter the property. In the months following the signing of this deed, the buyer shall also receive a title deed that he will keep.