In response to a growing demand in this sector and always seeking to offer a tailored service to its clients, Michaël Zingraf Real Estate, the exclusive affiliate of Christie's International Real Estate in the PACA region, has dedicated a specialized service to Life annuity sales, term sales, and bare ownership.
Given the increasing life expectancy and the growing desire of the elderly population to stay in their homes for as long as possible, viager sales are now a highly appreciated alternative solution. "As the historical birthplace of viager, but also a region rich in high-end properties, it was logical for our Group, a leader in this sector, to offer a customized Life annuity sales offer to the clientele of the French Riviera," says Michaël Zingraf, founder of the network.
What is viager in Real Estate?
Are you planning to sell or buy a property? Depending on the situation, viager is a real estate transaction that can have several advantages. Our experts will explain all the specificities of this type of real estate contract: how viager works, payment terms, advantages, etc.
How does viager work?
Definition of "Life annuity"
The term "Life annuity" refers to a right that is extinguished upon the death of its holder (or a third party linked to the holder by contract). In the real estate field, we speak of Life annuity when a property owner sells their property to a buyer in exchange for the payment of a lifelong annuity. This annuity can be paid monthly, quarterly, or annually, depending on the contract signed by the parties. It must be paid to the seller until their death and can be supplemented by a lump sum, which is a sum of money paid at the time of the sale deed. Generally, this lump sum represents 25 to 40% of the value of the property. Life annuity is therefore a "bet on life". It is governed by Article 196 of the Civil Code, which covers insurance, games, and bets.
How does buying or selling Life annuity work?
The operation of viager is simple: a property owner (usually an elderly person) sells their property to a buyer (called the debtor) who must pay an annuity for the entire life of the seller. The buyer can use the property as they wish upon signing the deed of sale, or from the death of the seller, depending on the type of contract chosen. For a viager sale to be valid, the date of the seller's death (called the creditor) must be unpredictable. Indeed, the transaction is based on the principle of chance. Note that a viager sale contract in which chance is not respected can be canceled. Therefore, neither the buyer nor the seller knows at the time of signing what the total amount of the property will be. It should be noted that if the seller dies within 20 days following the sale, the transaction is no longer valid as the law considers the death to have been foreseeable.
Occupied viager and free viager
Two main types of viager contracts are offered in France:
Occupied Life annuity
In an occupied viager, the seller retains the right to use and occupy the property. They can continue to live in the property until their death after selling it. In France, this option represents over 80% of viager sales.
Free Life annuity
The buyer has the right to occupy the property upon signing the deed of sale. If they wish, they can also rent it out. The buyer is responsible for the property and its expenses.
How to determine the selling price?
Calculation of the Life annuity
The amount of the Life annuity is calculated based on several factors:
- The estimated value of the property on the real estate market and its yield rate
- The age and assumed life expectancy of the seller: the mortality table established by INSEE is generally used
- Whether a lump sum is paid
- The type of contract: occupied or free Life annuity