What is the right of first refusal in urban planning (“DPU”) in France?
What is the Urban Pre-emption Right (DPU) in France?
The urban pre-emption right (DPU) allows local authorities, primarily municipalities, to acquire real estate properties to carry out development projects in their territory (urban planning, creation of public facilities, etc.).
The DPU is a “soft” acquisition method, as it does not compel a property owner to sell their property, unlike expropriation. The DPU applies during a real estate sale, after the signing of a preliminary sales agreement or promise to sell. Once this agreement is concluded, the notary informs the local authority by submitting a Declaration of Intent to Sell (DIA) to determine whether the authority intends to acquire the property. If the local authority decides to exercise its pre-emption right, it replaces the initial buyer and purchases the property under the same conditions. In this case, the seller proceeds with the sale but to a different buyer.
However, the local authority may offer a lower price than the initial buyer. If the seller does not agree to the lower price, a judge must determine the fair market value of the property. If the seller is not satisfied with the judge’s decision, they may choose to cancel the sale.
The pre-emption period lasts a maximum of two months, which can be extended to three months if the local authority wishes to visit the property before making a decision. This procedure is mandatory, and failing to comply with it may result in the cancellation of the sale.
There are also other types of pre-emption rights in specific fields, intended to serve public or private interests. These include:
- Pre-emption of commercial and artisanal businesses
- Pre-emption of agricultural land
- Pre-emption rights for tenants
Your notary will inform you about the pre-emption rights applicable to your transaction.
How We Can Help
Chassaint & Cerclé Notaires assists both individuals and professionals in handling the legal procedures required for buying or selling real estate.
- For more information on real estate acquisition: Click here.
- For more information on property sales: Click here.
