“The legal professionals and the figure can be found on the real estate transactions “

© DR – Etienne Michelez, associated Michelez Notaires, explains his role with the stakeholders of a real estate transaction.

Etienne Michelez, associated to the study of the same name, is a specialist in the law of the real estate business. It details the role of the notary with the different parties of a transaction. He emphasizes at the same time the joint work of professionals of the law and of the figure.

Posters of Paris : Can you tell us about the activities of your study in the real estate business ?

Etienne Michelez : We provide support for various institutional, more often than not-SCPI or SIC, in the framework of their investment projects in the real estate business, primarily in the office sector, but also of the hospitality industry.

Such land may also invest in portfolios of properties for residential use. We treat also the activities related to the walls of shops. We accompany the sponsors on topics of Vefa – sale in future state of completion – offices or housing.

A. P. : Can you enlighten us on the role of the notary in the context of a real estate investment business ?

E. M. : In the diagram promotion, the notary accompanies the promoter far upstream, as soon as the acquisition of land. He has the role of determining the special conditions which may be incorporated in the preliminary contract, usually a unilateral promise or a promise of indenture of sale, specific to the operation.

Thus, we can work on clauses related to the obtaining of building permits, an environmental audit, to the prediction of dépollutions of the basement, through the establishment of special conditions according to the geological studies carried out by the proponent or its sub-contractors, to determine if it is necessary, in the framework of the project, establish special foundations. The proponent must have the assurance of obtaining the necessary permissions, purged of all recourse, to launch its building project.

A. P. : How is today’s real estate development in the Île-de-France ?

E. M. : The market is currently very dynamic since the demand is still very strong and supply remains insufficient. I want to show the success of devices like Pinel, who follows other devices that have met great success, with the previously Duflot and the Scellier, which have focused the market of the real estate in new housing.

For the office property market, the popularity is a result of the new energy standards that allow you, with the quality construction and renovations, but also with new materials, for buildings whose energy performance becomes positive, that is to say that they create energy instead of consuming it.

This type of property is a holder for companies that want to have local performers to reduce their operating expenses, or who want to justify their innovative character by having local to the image of their corporate culture.

A.-P. : About the companies that invest in their premises, what are the tips that the notary can make to optimize the operation ?

E. M. : they are often VSES and SMES that decide to invest, since large groups tend to shed their real estate assets. The leaders of these small and medium-sized enterprises consider this option for reasons of both heritage, so personal, and business development. They want to hold, directly or indirectly, the land and premises in which is carried on the commercial activity of the company.

The notary provides advice on the structuring, in particular by dissociating the personal assets of the commercial heritage to ensure that the contractor is able to build, through the acquisition of the walls of the premises, of income both present and especially future, when it will assert its rights to the pension.

A. P. : Can you tell us a few words on the transfer of assets ?

E. M. : We separate the more often the sale of the business of the sale of the premises in which the activity is carried out. The interest to separate the personal assets of the executive officer of the company is precisely that of leaving to his officers the opportunity either to sell the company, retaining the real estate, or offer to the investor to acquire both the company and its walls.

This structuring into two parts allows the entrepreneur seller, the age of retirement arrived, choose between the two options.

A. P. : What is the role of notary in the area of financing transaction of real estate business ?

E. M. : the role of The notary is double. It accompanies the financial structuring of an acquisition transaction, and intervene in a mandatory way on the establishment of collaterals, that is to say, mortgages, and liens of lenders of funds, which are being put in place guarantees to the lender.

A. P. : Did you also used to work at the side of the banks ?

E. M. : Some notaries are actually the customers of financial institutions. These notaries are called “banks” accompany them in the implementation of the financings that require collateral.

They analyze the legal aspects of the case, but also provide their colleagues with a framework of acts, because the whole process is standardised. This allows the bank to ensure that her / his acts will be used wisely.

A. P. : For this type of financing, what type of structure do you recommend ?

E. M. : In the field of construction, in the framework of the promotion, these are often companies of civil construction-sale, which are used, or simplified stock companies, usually a sole partner ; the promotion company.

There is a dedicated structure for operation. For the business manager who wants to invest in the premises of his company, one most often uses the real estate company, with an option to tax on the companies to ensure that the detention of the heritage professional.

A. P. : so, You have also the role of council tax ?

E. M. : Yes, on this type of transaction, we question often the option to tax with the tax lawyer or the accountant of the leader.

A. P. : You have a habit of working in close collaboration with lawyers and accountants ?

E. M. : of course. On this type of operations, we collaborate with professionals of the law and of the figure.

A. P. : What is your feeling about the interprofessionnalité ?

E. M. : Your question is very wise. The interprofessionnalité exists since decades. The professionals of the law and of the figure are complementary. On the same record in the real estate business, you generally will have as speakers the lawyers who will handle the part related to commercial leases, notaries who will take care of any problems related to the situation of mortgage, to the origins of property, to easements, if any.

For its part, the chartered accountant speaks on the subjects of structuring of the company and on the accounting aspects. The tax lawyer will at the same time validate the solutions tax deductions and auditors technical will check the geological location of the well to determine if construction work special would need to be implemented, for example for foundations.

Of diagnostiqueurs techniques will also intervene to ensure that the premises, if they are already existing, are in compliance. The technicians of the construction will, for their part, control the energy performance of future buildings. Thus, there is a multitude of stakeholders on this type of operations. This is a true interprofessionnalité of fact ; each with a place perfectly identified and a predefined role to play. There is no problem of understanding of the missions of each on this type of case. This is a very important point.

On the interprofessionnalité, the law of Growth and Activity of August 6, 2015 now allows the creation of structures of exercise pluriprofessionnel. For the moment, such structures have not yet been implemented to my knowledge. I think that for each of the professions have ethical rules that are unique to this type of structure multiprofessional is extremely difficult to implement, given the specific nature of each profession.

For example, the notary holds in its accounts the funds of its customers, which is not the case of the lawyer who must pass by an account Carpa. A real problem therefore arises already for the financial flows. Moreover, the concept of professional secrecy is different between a lawyer and a notary. To be able to reconcile all of these rules within one and the same structure exercise multiprofessional seems to me to be extremely difficult.

The second brake in the establishment of these structures is related to the corresponding traditional professionals of the law and of the figure. For example, a notary associated with a lawyer within a multiprofessional automatically closes the door of other lawyers with whom he used to work. Same thing for the lawyer who can work more difficult with other notaries. Every professional, who is also a business leader, is attentive to his independence.

Interview by Boris Stoykov and Jean-Paul Viart

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