COMPASS IMMOBILIER: Purchase of off-plan property

PURCHASE OF PROPERTY TO BE OR THAT IS BEING CONSTRUCTED
OR IS THE OBJECT OF MAJOR RENOVATION

This differs from the purchase of re-sale property in terms of the regulatory framework and the procedure. The main differences are summarised hereafter:

• Instead of a compromis or sous-seing privé, a contract known as a ‘contrat préliminaire’ or ‘contrat de réservation’ is drawn up between the parties.

• The deposit is a maximum 5% of the purchase price if completion of the sale is envisaged within one year. Only 2% can be requested if completion is to be within two years and no deposit is payable beyond this period.

• Payment of the purchase price is made in stages in accordance with the point which the construction has reached. No more than 35% can be required before the foundations are completed. The final 5% of the price is always to be paid upon the hand-over of the completed property.

• An acte authentique is signed to transfer the ownership and this is usually finalised whilst the actual construction is in the early stages (at the earliest when the foundations are laid). A draft copy must be provided to the purchaser who has a period of one month in which to study it. He or she also has the right to consult the various documents relating to planning permission etc. The vendor is under a contractual obligation to deliver the finished product within a determined deadline.

• The property will be subject to warranties and obligatory insurance policies in relation to quality of workmanship, hidden and apparent defects, damage caused by the building work… A financial guarantee provided by a bank or financial institution to fund the costs of completing the construction or compensation of the purchaser in the event that the developer cannot finish the project must also be provided for most new constructions.

Copyright All Rights Reserved Victoria Headdon, Compass Immobilier