Property sales 2026: avoiding legal pitfalls

The sale of commercial buildings is a major financial matter for companies and calls for a rigorous legal approach to avoid pitfalls that could jeopardise the transaction. In 2026 the regulatory context is evolving and professional sellers must adapt their strategy to secure their property transactions. Between new disclosure obligations, developments in case law and heightened due diligence requirements, mastering the legal aspects of a property sale has become indispensable to protect one's asset interests.

The pre-contractual obligations of the professional seller

The information owed to the buyer

The professional seller of buildings must comply with enhanced disclosure obligations, which are particularly demanding where the buyer is an individual or a small business. This obligation, originating in case law and now codified, requires the disclosure of all matters likely to influence the buyer's consent.

The essential information concerns the legal situation of the building, including easements (servitudes), planning constraints, the status of administrative authorisations and the possible presence of tenants. The seller must also disclose any latent defects (vices cachés) of which the seller is aware, failing which the seller's contractual liability may be engaged.

Recent case law tends to widen the scope of this disclosure obligation. The courts now penalise the failure to disclose matters that the professional seller should have known given the seller's expertise. This development calls for particular care in putting together the sale file. The different types of preliminary audit, how they are carried out and who takes part are presented in our article on real estate due diligence.

The mandatory technical surveys

The technical surveys file is a central element of a property sale. For commercial buildings, certain surveys are of particular importance. The energy performance certificate, which can now be relied on against the seller, engages the seller's liability in the event of a manifest error.

The asbestos report remains mandatory for buildings constructed before 1997. It must be carried out by a certified professional and remains valid indefinitely in the absence of works. However, the seller's liability may be engaged if the survey proves to be wrong or incomplete.

The lead exposure risk report applies to buildings constructed before 1949. For commercial premises, this survey is particularly important given the health risks for future occupants. Updating this survey may be necessary as regulations change.

Negotiating and drafting the preliminary sale agreement

The essential clauses of the preliminary sale agreement

The compromis de vente (preliminary sale agreement) is the fundamental legal instrument that definitively binds the parties. Its drafting requires particular attention in order to prevent later disputes. The clauses on the subject matter of the sale must describe the building, its outbuildings and its accessories precisely. The scope of this preliminary contract, its conditions of validity and the usual conditions precedent are set out in our guide to signing the preliminary sale agreement.

The price clause deserves specific attention in professional transactions. It must specify the terms of any price revision, the payment conditions and the allocation of costs between the parties. Including an indexation clause may be appropriate for sales with deferred payment.

Conditions precedent are a major issue in the negotiation. For the professional seller, their number and duration should be limited in order to secure the transaction. The usual conditions precedent include the buyer obtaining financing, but may also concern obtaining administrative authorisations or carrying out additional expert assessments.

Protecting the seller's interests

Including specific protective clauses allows the professional seller to secure the transaction. The penalty clause, applicable if the buyer defaults, must be set proportionately to avoid its being recharacterised by the courts. The amount of the immobilisation indemnity, generally set at between 5 and 10% of the sale price, is an important point of negotiation. The costs and sanctions borne by a buyer who withdraws from the transaction are detailed in our article on cancellation of the preliminary sale agreement by the buyer.

The withdrawal clause (clause de dédit), which allows the buyer to withdraw on payment of an indemnity, must be distinguished from the penalty clause. This legal distinction affects the tax treatment and the means of recovering the indemnity. The professional seller must ensure these provisions are clear to avoid any ambiguity.

The warranties against eviction and latent defects may be adjusted by contract, particularly in sales between professionals. These limitations of warranty must respect mandatory public policy provisions and cannot extend to latent defects known to the seller.

Managing the risks linked to commercial leases

The impact of existing leases on the sale

The presence of commercial tenants is a determining factor in a professional property sale. The seller must inform the buyer precisely of the lease terms, including the amount of the rents, the state of the service charges and the contractual rent review mechanisms. This information determines the assessment of rental yield and directly affects the sale price.

The tenants' rights, in particular the right to renewal of the commercial lease, must be analysed precisely. The existence of precarious leases or the proximity of renewal dates can significantly affect the value of the building. The seller must assess the risk of tenants leaving and its financial consequences.

The assignment of rental receivables generally accompanies the sale of the building. This assignment must be formalised and notified to the tenants in the manner required by law. The seller remains liable for arrears predating the sale, unless otherwise agreed by the buyer.

Managing security deposits and service charges

Transferring security deposits is an obligation of the seller, who must hand the corresponding sums over to the buyer. This handover must be documented to avoid later claims from tenants. The seller must also settle the tenants' service charges and charge advances up to the date of the sale.

A statement of the state of the landlord and tenant relationships, including any ongoing disputes, must be provided to the buyer. This transparency allows the litigation risks to be assessed and the sale price adjusted accordingly. The seller may be held liable for any concealment that would affect the profitability of the investment.

The tax aspects of the sale

Optimising the tax regime

The sale of commercial buildings has specific tax consequences depending on the seller's status and the nature of the property. For companies subject to corporate income tax, the property capital gain is included in taxable profit at the standard rate. This inclusion allows any capital losses or deductible expenses to be offset.

The regime for professional capital gains offers exemption possibilities under certain conditions. The exemption for small businesses, subject to turnover thresholds, can be particularly advantageous. The seller must check eligibility for these regimes before the sale is finalised.

Spreading the taxation of the capital gain may be considered where the sale price is paid in instalments. This option, provided for by the French General Tax Code, makes it possible to match the tax burden to the sums actually received. The terms of the spreading must be anticipated as early as the negotiation of the preliminary sale agreement.

VAT on the sale

The VAT regime applicable to the sale of commercial buildings depends on the age of the property and on any option for VAT liability. New buildings, or buildings for which a VAT option has been exercised, are subject to tax. This VAT forms part of the price, which the buyer, if subject to VAT, can generally deduct.

The seller may exercise the option for VAT liability to optimise the transaction. This option makes it possible in particular to deduct the VAT incurred on works and to improve the competitiveness of the sale price. However, it requires compliance with certain conditions and administrative formalities.

Renouncing the option for VAT liability may be considered in certain cases, in particular where the buyer is unable to deduct VAT. This renunciation must take place before the transaction is carried out and comply with the statutory conditions. The analysis of the tax impact for both parties determines this decision.

Completing the sale and the warranties

Preparing the notarised deed

The notarised deed of sale (acte authentique) gives effect to the property transaction and definitively transfers ownership to the buyer. Its preparation requires many documents and supporting items to be assembled. The professional seller must put together a complete file including title deeds, the technical surveys, the commercial leases and their amendments.

Mortgage and land registration formalities generally fall to the notary, but the seller must ensure that mortgage registrations encumbering the building are released. This release is a condition of transferring the property free of any encumbrance, in accordance with the contractual provisions.

Checking the signatories' civil status and powers is an essential formality. For legal entities, producing up-to-date articles of association and the resolutions authorising the sale is indispensable. These prior checks avoid nullities or postponements of signing.

Post-sale warranties

The statutory warranties against eviction and latent defects continue after the sale, but may be adjusted by contract. The professional seller must assess the extent of these warranties and their potential impact on the seller's liability. Professional liability insurance may cover certain risks, subject to contractual exclusions.

The ten-year construction warranty (garantie décennale) does not generally apply to sales of completed buildings, but the seller may be pursued for defects affecting the structural soundness of the building. This liability, distinct from the warranty against latent defects, requires proof of fault in the construction or maintenance of the building.

Warranty limitation clauses, which are common in sales between professionals, must stay within the statutory limits. These limitations cannot extend to latent defects known to the seller or resulting from the seller's intentional fault. They must be drafted precisely to avoid being ineffective.

Conclusion

The sale of commercial buildings in 2026 requires a methodical legal approach to avoid pitfalls that could jeopardise the transaction or engage the seller's liability. Mastery of the pre-contractual obligations, rigorous drafting of the preliminary sale agreement, management of the lease and tax aspects, and securing the warranties are the pillars of a successful sale.

The constant evolution of regulation and case law requires permanent legal monitoring. Real estate professionals must adapt their practices to the new legal requirements and anticipate emerging risks. In this complex context, being assisted by a legal adviser who focuses on real estate law remains the best guarantee for securing your assets and optimising your sale transactions.