A viager is a unique type of agreement and property sale conducted between a vendor (known as the crédirentier) and the buyer (called the débirentier). Usually, the process begins with the buyer paying an lump sum of capital (called a “bouquet“) to the seller while they are still residing in the property. This initial payment is accompanied by supplementary payments, the frequency and sum of which are agreed contractually, until the crédirentier passes away. The buyer does not hold any ownership or right to the apartment until this point. The seller retains overall use of the property until the end of their life – at which point the viager payments end and the deeds to the property are passed onto the new owner.
In other words: a homeowner puts their property up for sale for an amount of cash equivalent to a down payment in addition to a lifetime of monthly payments. They will remains in the home until death, at which point the buyer takes possession and ceases any regular payments.
It is also possible to enter into what is known as a ‘viager libre‘ where the property is unoccupied and the buyer can choose to reside in their new purchase or put it up for rent as they see fit.
What are the benefits of such an arrangement?
Most of the benefits fall on the side of the vendor, in particular: financial security. Monthly payments of disposable income without any of the property maintenance costs and tax to worry about. It can also be a successful means of navigating red-tape and steep inheritance taxes if a seller wants to leave their home to someone.
For the buyer: it’s a gamble on the life expectancy of the vendor. Depending on their forecast health- the buyer could be in for a great deal! On the other hand, the vendor could live for an unexpectedly long time…we did warn you it was macabre!
For a lighthearted take on the viager, you may want to have a look at the 2014 film ‘My Old Lady’ starring Maggie Smith.