Legal column
Sarah Bright reviews the pros and cons of using a ‘tontine’ clause when buying a French property
I
magine you are buying a house with the person you love, cherish and want to spend the rest of your life
with, for better or for worse. For personal reasons, if ‘death do you part’, your wish is that the house be left exclusively to your spouse/partner. Your spouse/partner has the same generous wishes for you. Maybe you’ve had an irredeemable feud with your children, or maybe, simply, you just don’t want the person with whom you shared your life, to have to share the house after you die. Whatever your reasons, you need to know how the law can help you achieve your goal. This is where the ‘tontine’ clause can come into play.
LEGAL TOOL Notaries both love and fear the tontine, but whatever their feelings, there is no denying that it is a powerful legal tool. As with any power tool, however, the key to safety is to know how to handle it. The principle behind the
clause is simple: if there is a tontine in the purchase contract of a property, the surviving spouse/partner is retroactively considered as having been the sole owner since the day of the purchase. This means that a property
bought with a tontine clause falls outside the scope of the inheritance, which presents a clear advantage for the surviving spouse/partner. Unlike England and Wales,
where there is no forced heirship, allowing people to freely leave their property to whomsoever they wish through a last will and testament, in France (like Scotland), a surviving spouse and children have a statutory claim to parts of the estate. With this in mind, the legislator installed a failsafe
to make sure that the tontine is not a disguised donation, purposefully made to deprive the protected inheritors of their rights on the property. This is why there are two
conditions to the validity of the tontine clause. Firstly, both purchasers must have contributed fi nancially towards the purchase; secondly, the tontine clause is a ‘bet’ on death, or a slightly macabre, blind hedging bet, not knowing who will pop off fi rst. This means that at the
time of purchase, it has to be impossible to determine which owner will die fi rst. Therefore, if there is a great age diff erence or one spouse is terminally ill, the tontine clause would not hold in court if the children/ heirs disputed it. And if there’s any doubt in
the sincerity of the clause, they will dispute it. Nothing creates animosity within a step-family more eff ectively than depriving them of their inheritance. You may have included a
tontine clause in the purchase deed with the most virtuous and altruistic intentions, but if you do not comply with the two conditions, you will have to deal with the consequences. Because there really are consequences for getting it wrong, and they shouldn’t be taken lightly.
COURT PETITION The fi rst consequence is the potential dispute with the other inheritors and the option they have to petition the court to ask that the tontine clause be requalifi ed as a disguised donation. This alone should set you up for a bitter relationship with them until the day you die – which is probably not in the spirit of what your spouse/partner wished for. If their claim is successful,
84 FRENCH PROPERTY NEWS: July/August 2023
“The beauty and the curse of the ‘tontine’ are that it is unbreakable unless both parties agree otherwise”
the surviving spouse/partner would be forced to compensate them for the value of their share in the property which is under the tontine clause. You have the house, but you
may not have at your disposal the cash to compensate the other inheritors. Meaning you would then have to quickly sell the property to allow you to pay them their share, plus the legal interest that has multiplied.
DIVORCE DIFFICULTIES The second and most important consequence you should be aware of is that a tontine clause is fundamentally diff erent from a joint ownership (known in French as an ‘indivision’). Provided that the tontine
clause is valid, it is completely and utterly binding, in that unless both parties agree to
remove it and liquidate the property by selling it or having one buy the other out, then you are bound to remain co-owners until one of you dies. This is the reason why a tontine clause is particularly dangerous in a divorce, especially with a French divorce. In France, there are two
types of divorce: mutual consent and litigation. When you have a mutual consent divorce, both spouses agree to all the various aspects of the divorce beforehand, including the fate of a property with a tontine. This means that you liquidate your assets (sell the house, buy the other out, share the furniture…) at the same time as you divorce. As the consent of both
spouses to the future of the assets and the consequences of
© SHUTTERSTOCK
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