HOW TO BUY NEW FRENCH RIVIERA PROPERTY.
In France this is called "vente en l’état futur d’achèvement" (VEFA). As in classic resales, the purchase
procedure in France is extremely well regulated, and much more secure than other jurisdictions where buying
off plan became popular in recent years. The scandals so prevalent in Spain, for example, just cannot happen in France.
Before selling any properties developers must have bank guarantees in place to ensure that building works will be
completed, even if they were to run into financial difficulties.
Note that it is rare for a developer to have a show flat or house. Usually most or all properties are sold well
before the building work is complete. They will usually have a model of the development and good plans.
The "Contrat de Réservation" - reservation contract.
This contract reserves the property in your name, and fixes the purchase price.
It will include your personal details and the developer’s details. It describes the property
and outlines the building schedule and required stage payments. It will also state whether you require a mortgage
to finance the purchase.
Once you have reserved the property you will pay a deposit. This is very strictly controlled by law - it is a maximum
of 5% of the purchase price, and is held in a notaire's escrow account. No further money can be asked for
until the final contract is signed. The deposit is refunded if you change your mind during a 7 day cooling off
period, or if you fail to obtain the necessary finance (there is a time limit usually of 4-6 weeks for you to
obtain a mortgage).
The "Acte de Vente" - final contract.
This could be signed anytime up to 6 months after the reservation contract, depending usually on the stage of
Stage payments are made as the construction progresses. The payments that developers can ask for is, once again,
strictly controlled by French law, and the construction progress is checked independently to authorise the payments.
Typical stage payments are:
15% when building starts
15% foundations laid
20% floors laid
10% upper flooring laid
5% building is water tight
15% partition walls completed
5% tiling/carpeting finished
5% on completion of works
Finally, 5% at the key handover and after "snagging"
Note that notaire's fees are lower than on a classic purchase for an older property - typically 2.5% rather than 6-8%.
As well as the bonds and bank guarantees required by developers to ensure completion of the project, there are other guarantees
in place for purchasers:
A ten year structural guarantee.
A two year fixtures and fittings guarantee.
A one year "perfect completion guarantee", covering any snagging problems arising after receiving the keys.
Receiving the keys.
Most developments are completed on time, however some delivery dates can slip. To hand over the keys the developer
will accompany you through the property and make a list of any snagging issues. You then have a further 30 days
to notify them of any further problems, and there is also the 1 year "perfect completion" guarantee.