[COVID-19] What consequences on the registration of deeds
Information current as of the date of publication of this article
In order to be effective or enforceable against the tax authorities, many legal acts require to be concluded in the form of notarial deeds (real estate transfers, deeds of gift, inheritance deeds, wills, etc.) or be subject to the formality of registration (transfer of shares, minutes or treaties recording mergers or contributions, deeds of transfer of business, Dutreil pacts, etc.), most of the time within a mandatory 30-day period.
Is it still possible to conclude notarial deeds and/or register legal acts within the prescribed deadlines?
In the current context of the fight against the spread of the Covid-19 virus, trips to the notary’s office or to the premises of the registration services are obviously not those which, in our opinion, are likely to be authorised as an exception to the general principle of confinement provided for by the decree of 16 March 2020.
The probability of being able to conclude a notarial deed in this context seems to us to be extremely limited at present. This is because notarial offices and notarial bodies have been officially closed to the public since 18 March 2020.
However, Decree No. 2020-395 of 3rd April 2020 expressly authorized the conclusion of notarial deeds remotely during the period of health emergency.
This decree provides that, until the expiry of a period of one month from the date of cessation of the state of health emergency, notaries may draw up a notarial deed in electronic form when one or more parties or any other person contributing to the deed are neither present nor represented.
The exchange of the information necessary for drawing up the instrument and the collection, by the notaries, of the consent or declaration of each party or person contributing to the instrument must then be carried out by means of a system of communication and transmission of information (i) guaranteeing the identification of the parties, the integrity and confidentiality of the content and (ii) approved by the Conseil supérieur du notariat.
Notaries will have to collect, simultaneously with the above-mentioned consent or declaration, the electronic signature of each party or person involved in the act by means of a qualified electronic signature process meeting specific requirements.
It should be noted that a certain number of notaries are currently reluctant to using such type of remote acts, due in particular to the costs associated with the software needed to draw up the said documents and to the disputes that could arise in connection with the conclusion of such acts.
With regard to the legal acts to be registered, it should be noted that they can be sent to the registration office on which the taxpayer depends by post in a stamped, ordinary or registered letter, the latter option to be obviously preferred as much as possible. The documents to be registered must imperatively be communicated in duplicate; one will be returned to you, the other will be kept by the service in charge of registration.
In all cases, we recommend finding out beforehand, as much as possible, how your deeds will be registered by the competent registration service.
Each department may indeed have set up specific procedures, particularly in the context of the Covid-19 crisis (e.g. some departments accept the registration of dematerialised documents, but only when they are made by lawyers).
Beyond formalism, what about the payment of registration fees ?
The principal measures taken in the tax field to help companies, such as the possibility of obtaining the postponement of certain tax deadlines or even the remission of certain tax debts for companies in difficulty, concern direct taxes and do not currently extend to registration fees which, like VAT, must therefore be paid on time and in the usual manner.
However, given the context, we believe that any interest charged to taxpayers due to late payment of registration fees should be eligible for an ex-gratia rebate, provided that the taxpayer can demonstrate good faith and genuine cash flow difficulties related to Covid-19.