What does “sans rente” mean?

Accomodation, House and Garden
1
I’ve seen a few properties for sale that have a description like this:

"APPARTEMENT EN VIAGER OCCUPE SANS RENTE LIMITE A 5 ANS"

Appartement en viager occupé sans rente limité à 5 ans.

Valeur du bien: 530'000.-

Vous ne payez que

Bouquet: 450'000.-

Rente: sans

Propriétaires: Homme de 72 ans et femme de 74 ans Mais limité à 5 ans

What does it mean???

2

Hi, I guess it’s more important to understand “acheter en viager occupé” first.

It is buying a property to person that keeps the right to live there until death. In your example is a couple, so even if one dies, the other has the right to live there until death. In this context “sans rente” means you don’t pay a rent to them while they live there.

They are selling for 80’000 CHF below commercial value because they expect to live 5 years (limité a 5 ans) in the property you bought. The discount below commercial value should be comparable to the current price of rent to live there. The advantage is that you pay less in cash today. The disadvantage is you cannot live there or rent it for 5 years.

Use internet translation of this website for more details on the “en viage” contracts https://viagers.ch/le-viager/

3
And be aware that not every banks are willing to give mortgage to by properties en viager occupé.

All the banks I worked with in Geneva have immediately refused when I mentioned buying a house in viager occupé. Finally had to end up with buying a "normal" house.

4
The most famous example of a 'rente viagère' was that of Frenchwoman Jeanne Calment who lived more than 122 years. The lawyer who was paying her RV predeceased her, dying at age 77. His widow had to continue paying the rente !

5
In the quote above it says limited to 5 years. Which is probably the average waiting time for assisted living places.

6
Yep. It's feasible to assume this couple wants to live 5 more years on the apartment and then move to a retirement home. 80k for five years (60 months) yields 1'333 CHF/month. Considering property price is 530k, it may be a nice 3.5 room apartment. The rent of one of those is a bit higher, thus the initial payment (bouquet) could be lower.

I guess the point of this type of contracts is a low initial payment to avoid getting a mortgage. If a mortgage is needed anyway to afford the initial payment, there is no reason to get into this.

7
5yr mortgage costs at least 2.5%, assume 3%. 1% writeoff per year, also at the high end because it's better to be safe than sorry. Cumulated over 5 years, with 3% interest on the interest that alone adds up to some 20%, or 90k rebate in the example.

And that's without maintenance costs.

There's no guarantee that the couple will honor the contract and actually move out after five years. It would be extremely difficult to evict them, single or couple, in their late 70ies after they spent basically their entire adult life there, let alone if they're frail or in poor health. This risk is uncalculatable, so is the potential cost.

8
Thank you.

Not for us then! I want somewhere to move into asap!