Buying together: indivision, SCI or tontine?

Buying together is a fine milestone, and often a couple's first major wealth decision. In Nice, every year we assist first-time buyers pooling their savings for a first flat, established couples looking for a second home on the Côte d'Azur, and pairs of purchasers — sometimes family, sometimes friends — investing together in rental property.

In every one of these cases, one question arises even before the preliminary contract is signed: in what form should the property be held? Indivision (joint ownership), a société civile immobilière or SCI (a French property-holding company) and the tontine clause (an accruer clause) are not mere formalities. They are three distinct legal frameworks, and they determine how you will take decisions together, how you will be able to exit, and what will become of the property should life not follow the expected path. Here are the essential principles, so that you can approach your appointment with the notaire with complete peace of mind.

The form of ownership is decided upstream, because it appears in the deed of sale. Changing it afterwards is possible in certain cases, but always at the cost of additional formalities — and, in the case of the tontine, with real difficulty. It is therefore best to give the matter thought as soon as your project takes shape, and to discuss it with your notaire before you sign.

The right choice does not rest on any universal ranking of the three arrangements: it depends on your own circumstances. Several factors need to be put on the table.

• Your status: marriage, a PACS civil partnership or cohabitation do not offer the same protection to a spouse or partner, nor the same outcome for the property in the event of separation or death.
• The matrimonial regime, for married couples: it already determines, to a large extent, who owns what you are buying.
• The contribution made by each of you: financing in equal shares does not call for the same precautions as a marked imbalance between the two purchasers.
• The objective pursued: living in the property, letting it, preparing a transfer of wealth or one day bringing other members of the family into the project.
• The horizon envisaged: a pied-à-terre held for the long term is not structured in the same way as an investment intended for resale.

If you state nothing in particular, a purchase by two people is made in indivision. Each party owns a share of the property, expressed as a percentage in the deed, and it is essential that this split genuinely reflects what each has contributed — personal funds as well as participation in repaying the loan. A share fixed casually, with no connection to the reality of the financing, is a classic source of dispute on the day the couple separates.

Indivision is simple and immediate: no structure to create, no particular formality beyond the deed itself. Its counterpart is joint management. The most important decisions, beginning with the sale of the property, require the agreement of all the co-owners. A disagreement can therefore block the project for a long time. The law also lays down a fundamental principle: no one may be compelled to remain in indivision. Any co-owner may at any time apply for the property to be divided, and so bring about an exit — through the courts if need be. This is a protection, but also a fragility for the party who wished to keep the property.

A convention d'indivision, a joint ownership agreement drawn up by the notaire, makes it possible to organise matters: appointment of a manager, allocation of costs and income, duration, and the arrangements should one of the two wish to leave. We recommend one systematically as soon as the contributions are unequal or the property is intended to be let.

With a société civile immobilière, you are no longer the one buying: the company buys, and each of you holds shares in it. You draw up articles of association, you appoint one or more managers, and you are free to define the rules of the game — the majorities required, the conditions for partners joining and leaving, the manager's powers. This contractual freedom is the SCI's chief asset: it allows you to set down in advance what indivision leaves to the vagaries of the relationship.

The SCI also makes it easier to pass the property on and to let the project evolve: shares are sold or gifted more flexibly than a building, and a child or a third party can gradually be brought into the capital. Finally, it avoids the deadlock inherent in indivision, since the way it operates is organised by the articles of association.

In return, the SCI is a genuine company. It demands constant formality: incorporation and registration, meetings to be held, accounts to be kept, decisions to be recorded. It requires at least two partners and carries tax and wealth-planning consequences that vary according to the options chosen and the use made of the property — a point that only your notaire or your adviser can quantify in the light of your situation. For a main residence bought by a young couple, it is rarely the first instinct; for an investment or family-transfer project, it fully merits consideration.

The tontine is a clause inserted into the deed of purchase. Its mechanism is a singular one: on the death of one of the two purchasers, the survivor is deemed always to have been the sole owner of the property, from the very day of acquisition. In legal terms, the deceased is treated as never having owned anything at all. The property therefore falls outside their estate, which explains the appeal of the clause for unmarried couples anxious to protect the survivor, particularly where the home they occupy is concerned.

This effectiveness has a flip side: the tontine is very difficult to undo. For as long as both purchasers are alive, neither of them is regarded as owning a share; there can therefore be no division. Leaving the property requires, in practice, the agreement of both. Where a separation turns acrimonious, the situation can remain frozen for a long time. The clause further presupposes a genuine element of chance between the purchasers and a balance in their contributions, failing which it may be challenged. It is a powerful tool, but one to be handled with care and never without advice.

Indivision — principle

Each party owns a share of the property, fixed in the deed and meant to reflect what they have genuinely contributed.

Indivision — advantages

Immediate simplicity, no structure to create, flexibility in entering the project, and an exit that always remains possible.

Indivision — limits

Major decisions require the agreement of all, and any party may force a division: the project remains dependent on goodwill.

SCI — principle

A société civile holds the property; you hold shares in the company and the rules are set by the articles of association.

SCI — advantages

Management organised in advance, deadlock avoided, and easier transfer of the property and evolution of the partners involved.

SCI — limits

Formalities, accounts and corporate life to be maintained over time, and tax consequences to be studied case by case.

Tontine — principle

A clause in the deed provides that, on the death of one party, the survivor is deemed always to have been the sole owner.

Tontine — advantages

Strong protection for the survivor, particularly for unmarried couples who are keen to keep the home.

Tontine — limits

Almost impossible to undo unilaterally, no exit without the agreement of both, and a balance between the purchasers is required.

A main residence bought together

For a first purchase in Les Musiciens, around Libération or in Vieux-Nice, indivision combined with a well-drafted agreement answers most situations, provided the shares faithfully reflect the contributions made. Unmarried couples whose first concern is to protect one another would do well to raise the tontine with their notaire.

A second home or an investment

A pied-à-terre on the Côte d'Azur, a villa intended to bring the family together or an income-producing building bought by two people often call for more structured thinking. This is typically the territory of the SCI, which makes it possible to organise the management, anticipate disagreements and prepare the transfer to children without having to break up the ownership of the property itself.

• Speak to the notaire before the offer to purchase, not the day before signing: the framework chosen appears in the deed.
• Make the shares match the reality of the financing, including personal funds and monthly repayments.
• Keep written evidence of what each of you has contributed: transfers, statements, certificates. Such documents spare you a great many arguments.
• Consider the difficult scenarios — separation, death, the need to sell — while relations are still good.
• Check that the arrangement is consistent with your family situation: matrimonial regime, PACS, children from a previous relationship, any will.

Are you preparing a joint purchase in Nice? Our team will help you define your project, target the properties that match it and prepare properly for your appointment with the notaire. Our advisers are at your disposal at 8 avenue Auber, Nice.

This article provides general information on the legal principles of buying together. It is no substitute for the advice of a notaire, who alone is able to analyse your personal, family and wealth circumstances and to advise you on the framework best suited to your project.