Sell · Income-producing building
Selling an income-producing building: valuation, file and rules to know
An income-producing building is bought for its rents, so it sells to an investor, on the basis of a rent roll and a complete file. Covesta values the building, prepares the file and presents it to buyers whose project and financing have been checked, in full confidentiality if you wish. The fees are payable by the buyer.
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Selling an entire building: the rules to know
The main rules for the sale of a whole building. Each line states the applicable French law.
| Key point | What to remember | Source and date |
|---|---|---|
| Current leases | The sale does not end the leases: the buyer becomes the landlord of the sitting tenants, on the same terms, and is responsible for returning the deposits. | French Civil Code, article 1743; law of 6 July 1989, article 22 |
| Sale of a whole building with more than five homes | When a residential building of more than five homes is sold in its entirety and in a single transaction, the tenants have a pre-emption right, unless the buyer undertakes to extend the current leases for six years. | French law of 31 December 1975, article 10-1 |
| Municipal pre-emption right | In areas where the municipality has introduced this right, the sale is preceded by a declaration of intent to sell. The authority has two months to decide; silence amounts to a waiver. | French Town Planning Code, articles L. 213-1 and L. 213-2 |
| Energy audit | For a building held by a single owner, an energy audit must be given to the buyer when the building is rated F or G (since 1 April 2023) or E (since 1 January 2025). | French Construction and Housing Code, article L. 126-28-1; Service-Public, page checked on 14 September 2026 |
| Seller's capital gain | For an individual or a company subject to income tax, the capital gain benefits from allowances based on the holding period: it is exempt from income tax after twenty-two years and from social levies after thirty years. | French General Tax Code, article 150 VC |
How an income-producing building is valued
The price of an income-producing building is first reasoned in terms of income. The starting point is the rent roll: the annual rents excluding service charges actually collected, unit by unit. The buyer applies the yield expected for this type of asset and location, then adjusts for what will have to be spent and what can be hoped for.
We cross-check this income approach with comparable sales in the area. The yield stated to the buyer is always presented as an estimate, calculated on rents actually observed and not on hoped-for rents.
- Foreseeable works: roof, façade, utilities, common areas, energy rating of the homes.
- Quality of income: age of the leases, rents compliant with rent control, vacant homes, arrears.
- Potential: units to be re-let at market level, space to be converted, unit-by-unit sale.
- Owner's costs: property tax, insurance, maintenance contracts.
The file to prepare
We give you the list of documents, check each one and build the investor file. Documents are only sent to qualified buyers, under a confidentiality agreement for sensitive files.
- Title deed and, for a company, articles of association, company registration extract and the signatory's powers.
- Detailed rent roll: unit, floor area, rent, service charges, lease date, deposit.
- Leases, amendments and collection history over at least twelve months.
- Surveys: DPE, asbestos, lead, electricity, gas, risk report, plus an energy audit if the building is rated E, F or G.
- Property tax, insurance, maintenance contracts, invoices for recent works.
- Plans and, where one exists, the description of division into units.
As a whole or unit by unit?
Selling the building as a whole is the simplest route: one deed, one buyer, leases that continue. A unit-by-unit sale can achieve a better price for some buildings, but it requires setting up a co-ownership, takes longer, and gives each tenant a pre-emption right on the first sale of their home.
We put figures on both scenarios before agreeing the strategy with you.
Sale fees
In our sale mandates, the fees are payable by the buyer and included in the advertised price: you receive the agreed net seller price. For a building, they are set in the mandate, within the limit of the published scale, which decreases from 7% to 4% incl. VAT of the net seller price. No fee unless a sale is completed.
See the sale fee scaleFrequently asked questions
Selling an income-producing building: your questions
How is an income-producing building valued?
From its rents: the annual rents excluding service charges are related to the yield investors expect for this type of building and location, then adjusted for the works to be planned, the quality of the leases and the building's potential. This approach is cross-checked with comparable sales. The Covesta valuation is free and confidential.
Do tenants have priority to buy?
Not as a general rule: the sale of an occupied building does not give tenants a pre-emption right. There is an exception for the sale as a whole of a residential building of more than five homes: tenants may pre-empt, unless the buyer undertakes to extend the current leases for six years. A pre-emption right also exists on the first sale of a home after the building has been divided into units.
Is an energy audit required to sell?
Yes, if the building belongs to a single owner and is rated E, F or G. The audit is given to the buyer from the first viewing. It comes on top of the usual surveys and sets out works scenarios, with no obligation to carry them out before the sale.
Can a building be sold without advertising?
Yes. The building can be presented without its address or name, on a listing reserved for identified members, and the file is only sent to qualified buyers. You choose the level of confidentiality in the mandate.
Who pays the sale fees?
The buyer. In our sale mandates, the fees are included in the advertised price and you receive the agreed net seller price. For a building, they are set in the mandate within the limit of the scale published on the Sell page.
What happens to the leases after the sale?
They continue unchanged with the buyer, who becomes the landlord and is responsible for returning the deposits. If the buyer wishes, Covesta can take over the management of the building.
This information is general and does not replace personalised legal or tax advice. Any rent, price or yield figure is an estimate: property investment carries risks, including the risk of capital loss.
Have an income-producing building valued
A thirty-minute conversation to value your building, compare a sale as a whole with a unit-by-unit sale and set the level of confidentiality. Free and with no obligation.