New build apartments in France, or purchasing property off plan

VEFA - Vente en l’Etat du Futur Achèvement - sale of a project under construction  – means that the building is not yet completed, sometimes the works have not even started yet, so the buyer purchases the apartment off plan.
 

A lot of buyers of French Riviera properties dream of buying a new build apartment. However, usually they imagine the completed project. In reality the sale starts when the foundations are not yet ready. When you can see the first floor is already built, most of the options will be sold.

So, it’s up to you to imagine your future apartment from the developer’s presentation and specifications.

How to buy an off plan property  in France

Step 1

You sign a reservation contract with a promotor in which are detailed the price, the description and the location of the apartment/cellar/car park.  Also the living space, the specifications of the construction and the finish, the date of delivery and the developer’s insurance.

Each developer in France has to have an insurance policy, which guarantees  that the building will be completed in all eventualities. If a promoter goes bankrupt, the buyers have a guarantee that the project will be completed with another one.

You have to pay 5% of the price when signing the contract of reservation

Step 2

Then you have to sign a notary’s sale contract signed by the buyer, the promoter and the notary.

The notary fees are 2-3% for buying real estate which is under construction in France.

Usually the buyer pays 25% of the price on signature of the notary’s contract, if the foundations are not yet completed.

If the foundations are already laid, the buyer in VEFA has to pay 35% of the price.

The buyer has a 10 day cooling-off period to change his mind, without paying any penalties.

Step 3

Financing VEFA apartment:

The schedule and the amount of the payments in a new build are regulated by law:

Payment schedule

35% -  on completion of the foundations

Step 4

70% -  on completion of structural works ( roof, walls with windows, and terraces)

Step 5

90% - the building is completed

Step 6

100% - delivery

The advantages of purchasing new build property in France are a gradual payment schedule (payment by instalment) and the reduced notary fees. The purchase of off plan property is secure for the buyer in France, and offers different guarantees:

• The guarantee of completion. The developer has bank insurance, and in case of financial problems the bank will finance the completion.
   
• 2 year guarantee. If there are defects in the equipment or installations,  they will be repaired and the costs covered by insurance for a period of 2 years.
   
• 10 year guarantee. The developer bears full responsibility for 10 years for any more significant defects of construction ( foundations, walls, roof, lift or terraces)

The period of construction for the new development is usually between 16-24 months.

You can deal directly with a developer. At the same time the cost of using a real estate agent is free for you, and has no influence on the price of the property. The  developer is happy to pay the agency commission.