Yesterday evening, Susie and I went to see "My Old Lady," a new movie starring Maggie Smith, Kevin Kline, and Kristen Scott Thomas. The movie is set in Paris in the Marais, the fourth arrondisement, and I recognized many of the street scenes because I pass that way on one of my morning walks. [rue des Francs Bourgeois, etc.] The plot revolves around a ninety-two year old woman, played by Maggie Smith [who is actually only seventy-nine], who lives in an enormous old run-down apartment with a huge magnificent garden. She is living there en viager, which is the subject of this post. [I shall not spoil the movie for anyone by revealing important elements of the plot. Suffice it to say that it is a delight, with Kevin Kline in particular giving a wonderful performance.]
Throughout France, but especially in Paris, there are old folks who are what used to be called in the old days "land poor." They own the apartments or houses in which they live, but they have very little in the way of ready cash for their final years. Their homes have appreciated wildly over the years as a result of a continuing real estate boom, but if they were to cash out by selling, they would be faced with the painful necessity of moving, and then would be forced to spend all the money they had just realized buying a new home.
Enter the institution of the viager [which is French for "annuity."] In France, you can sell your home and continue to live in it, the new owner being obliged by the contract to pay you a monthly stipend [called rente, although it is not rent in our sense since you are the one occupying the property, which you no longer own.] When you die, the apartment or house becomes the property of the owner free and clear.
The property is sold under these conditions for much, much less than it would be worth on the open market. Indeed, the selling price is called a bouquet, which means just what it sounds like to an English speaker. The suggestion is that the price is so low that it is just a bunch of flowers for the old lady, a bouquet. The rente also is less than the property would bring in the rental market.
This sounds at first like what we call a reverse mortgage, but it is in fact quite different. What we have here is a gamble, pure and simple. The old lady or gentleman who sells en viager may drop dead five days after signing the contract, in which case the buyer has lucked into a very valuable property for a pittance. The occupant may live for as number of years, during which the buyer is paying monthly rente and is, in effect, chipping away at the value of the purchase. Or the occupant may live for a very long time, so long in fact that the original buyer dies and his or her heirs are stuck with the contract. There is one story, apparently true, of a little old lady who lived en viager to become the oldest person in France! The poor owner's heirs got stuck with her rente for decades.
When I went on-line to look up viager, I found a site offering properties all over France, on which the property is listed, along with the square meters [always, in France, the number one question], the normal market value, the bouquet, the monthly rente, and the sex and age of the occupant! Two blocks from our apartment in Paris, on rue Lagrange, is a little real estate office that specializes in apartments en viager. For a long time I was puzzled by their window each time I walked by until finally I looked it up.
All of this reminds me of the curious practice of the Tontine, which has figured in a number of movies and novels. The institution of the viager seems to me to capture the quintessence of the French petit bourgeois mentality. At all events, I recommend the movie.