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Compromis vaut vente
Guichet.lu states it clearly: a compromis signed by both parties is definitive. It commits the signatories to complete the sale at the agreed price. The principle is summarised as compromis de vente vaut vente: the agreement on the thing and the price is enough for the sale to exist between the parties.
Two consequences follow for buyers:
- there is no general cooling-off period after signing a compromis for an existing home;
- if you want to be able to withdraw in certain circumstances, those circumstances must be written into the compromis as conditions.
What it must contain
At a minimum, a valid compromis identifies:
- the parties: names and addresses of seller and buyer;
- the property: address and cadastral references, including any cellar or parking space;
- the price and the payment terms.
In practice, a well-drafted compromis also covers:
- the notary chosen to draw up the deed, and the date by which it must be signed;
- the date of handover of the keys;
- servitudes and rights attached to the property;
- what is sold with the home: fitted kitchen, built-in wardrobes, light fittings;
- the conditions precedent that must be met for the sale to proceed;
- a penalty clause if one party fails to perform.
Check the surface area and the lots. For an apartment, the compromis should list every lot being bought: the flat, the cellar, the parking space, each with its share of the common parts. A missing cellar is surprisingly common and awkward to fix later.
Conditions precedent: the buyer's safety net
A condition suspensive suspends the sale until an event occurs. If it does not occur, the sale falls away without penalty.
Financing
The most important condition for most buyers is obtaining a mortgage. Guichet.lu notes that the period set is typically four to six weeks. The condition should state the amount of the loan, the maximum rate and the duration, so that it cannot be argued that a loan on any terms satisfies it.
Courts check that the buyer acted in good faith: that you applied promptly, to a real bank, for a loan consistent with the condition. A buyer who does nothing and then invokes the condition will not be protected.
Other useful conditions
Depending on the property, you may also want conditions relating to:
- the sale of your current home;
- a planning certificate confirming what can be built or changed;
- the absence of mortgages or charges not discharged at signing;
- for a house, the result of a technical inspection.
Every condition must be precise: what must happen, by when, and how the buyer proves it.
The penalty clause
Most compromis contain a clause fixing the damages payable by a party who refuses to complete without a valid reason. Guichet.lu notes that it is commonly 10% of the price. Alternatively, the non-defaulting party may seek actual damages or ask a court to enforce the sale.
On a €700,000 flat, 10% is €70,000. That figure alone explains why a buyer should never sign a compromis without a financing condition unless the money is already secured.
The deposit
It is common for the buyer to pay a deposit when the compromis is signed, often held in escrow by the notary or the agency until the deed. The amount is a matter of agreement. Make sure the compromis states who holds it, in what account, and when it is returned if a condition fails.
Registration of the compromis
A compromis must be registered with the Administration of Registration within three months of signing. According to Guichet.lu:
- where the compromis contains conditions precedent, a fixed fee of €12 is charged at registration;
- without conditions precedent, the proportional 7% registration duty becomes payable on the price.
In practice the notary or agency handles this, but it is one more reason to include genuine conditions.
From compromis to deed
Once the conditions are satisfied, the notary prepares the deed. The notary checks the title, the absence of charges, the planning situation, calculates the duties and any tax credit, and organises the payment of the price. Our guide to registration duties and the Bëllegen Akt explains what is paid at that point.
The deed must be notarial for the sale to be enforceable against third parties and entered at the mortgage office. Until it is signed, the seller remains the registered owner.
New builds are different
A purchase off-plan, vente en l'état futur d'achèvement, follows specific rules. The sale contract itself must be a notarial deed and contain mandatory information, including the completion guarantee. A reservation contract may come first, with a deposit limited to 2% of the provisional price. Our guide to buying off-plan explains the differences.
A pre-signing checklist
- Is the price, and everything included in it, written down?
- Is there a financing condition with the amount, rate, duration and deadline?
- Are all lots listed, with their cadastral references?
- Is the notary named and the deadline for the deed realistic?
- Who holds the deposit, and on what terms is it returned?
- Have you read the co-ownership documents, if it is an apartment? See our guide to buying in a co-ownership.
Our take
The compromis is where a purchase in Luxembourg is won or lost. Sellers and agents sometimes present it as a formality to be signed quickly. It is not. Read it slowly, ask the notary to look at it if anything is unclear, and never sign without a financing condition unless your funds are already confirmed.
If you are buying, see our properties for sale and our step-by-step guide to buying a home in Luxembourg.
Sources
This article describes general rules and market practice in Luxembourg and is not legal, tax or financial advice. Rules and announced measures change; confirm the position that applies to you with a notary, your bank or a tax adviser before signing.
