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Buy as a life annuity

The life annuity

The life annuity is a particular form of sale that allows the seller (the creditor) to receive part of the price at the time of sale (the bouquet), and the rest, in a staggered manner, throughout his life, in the form of an annuity. The buyer (the debirentier) does not know, at the time he buys the property, how much he will pay in the end. There is a hazard on the price that will actually be paid.

The annuity is paid to the seller. It can benefit other people, such as the seller's spouse.
Namely : if the buyer dies before the creditor, his heirs must continue to pay the annuity. It may be useful for the buyer to take out insurance to cover this risk.

Depending on the will of the parties, the seller, or the other persons benefiting from the annuity, may have the possibility of continuing to live in the property until the end of their life: it is said that the life annuity is occupied.
If the buyer can live in the property immediately, it is said that the life annuity is free.

All these elements ( free or occupied life annuity, number and age of people benefiting from the pension...) have an influence on the price of the property.

The contract of sale in life thus includes adapted clauses, which provide for the conditions of the sale, and the payment of the annuity.

The creditor also benefits from guarantees designed to ensure that the pension will be paid to him.

Namely: The commission of the real estate agent is calculated according to the value of the property. It is due to the signature of the authentic deed.

Good to know

If the property sold as a life annuity belongs in community to a couple, the contract can be drawn up for the benefit of both spouses (on two "heads"). The payment of the annuity, in this case, will end only on the death of the second spouse. The same applies if the contract of sale provides for a joint and survivor annuity to the surviving spouse.