Location, location rules in France’s viager market

Retirement is more relaxed when financial concerns are eased. A viager could be one way to ensure that security.

The market for selling properties en viager is growing steadily – partly as a result of an increasing number of sales to viager mutualisé funds.

Viager sales are where vendors sell their property for a discounted lump sum, called a bouquet, usually with a right to remain in it for life and a guaranteed monthly “rent” from the buyer.

Viager mutualisé funds are a variation on the classic person-to-person sale.

The buyer is a group of investors in a large number of viagers who share profits from them. By doing so, they reduce the risk of losing money if a seller lives for a long time.

The group can be structured as an investment fund or an SCI, a comp-any set up to own property. Shares are sold to private or to institutional investors, such as insurers and banks.

Once the vendor dies, the fund resells the home.

In theory, selling to such a fund can be reassuring because payment of the rent does not depend on one person.

Such funds can also more easily take the risk of a property belonging to a couple, where both wish to maintain a lifetime right to stay (called a viager sur deux têtes) so it may be easier to sell quickly to such buyers in this case.

However, Hervé Odent, chairman of Paris-based Etude Lodel estate agency, which has specialised in viager sales since 1942, argues it is best to ...

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