There’s a wonderful 1972 French film called Le Viager. Its comic plot revolves around an unscrupulous French doctor who becomes so convinced one of his patients is about to die that he persuades the supposed invalid to enter into a very particular type of annuity contract.
Every year the doctor will pay his patient a sum of money on the understanding that when his patient finally snuffs it his villa in Saint-Tropez will become the doctor’s. It’s the essence of the French practice known as buying en viager. Unfortunately for the doctor, his diagnosis is way off the mark…and his patient long outlives him
It’s sheer coincidence that my own viager property bears the name “Le Saint-Tropez.” It’s a long way from Provençe…and it’s no villa. It’s a studio apartment in a 17th-century building in the Marais district of Paris. It is Saint- Tropez in name alone; rather than the Mediterranean Sea, the views are of the rooftops of Paris’s oldest quartier.
I wanted the apartment the first time I saw it—at a committee meeting to decide how to deal with the terrace, which had been built illegally. When I whispered to the syndic (manager) that I wanted to buy the apartment, he shushed me and said, “Don’t tell anyone. I will help you.” Little did I know how much help I would end up needing. The property had more in store for me than just an illegal terrace.
A viager is a French term for a property sold on a reverse annuity basis. Put simply, anyone in France can sell their property in exchange for a down payment and regular cash installments for the rest of their life while they continue to live in their house or apartment.
When they die, the property is surrendered to the buyer.
Selling en viager allows elderly people to release capital from their homes while still living in them. For buyers, it offers a rare chance to buy a property at a fraction of its market value.
If the owner, for example, dies one month after agreeing to the viager arrangement, the buyer gets the property for the price of a lick of paint.