Follow our complete guide to off-plan sales: discover the principles, guarantees and advantages of this mode of real estate acquisition strictly framed by law.
Definition and meaning of "VEFA"
In civil law, VEFA or Sale in the State of Future Completion is a contract used in real estate transactions for goods to be built. We also frequently hear "off-plan sale" instead of off-plan sales or "off-plan purchase" instead of off-plan purchase.
It is therefore used during the sale or purchase of a house or an apartment off plan: that is to say that the transaction takes place before or during the construction of the property, in all cases before its completion. It is said that the purchase is made off plan since the purchaser has a complete set of descriptive documents, models and 2D or 3D plans to visualize the property after work. Among other fundamental elements, we will mention the ground plan, the floor plan and the summary descriptive notice which ensure the best possible projection for the buyer.
The developer behind a new program thus begins its marketing before the start of construction, and continues it as necessary during construction. Client, the promoter will thus be the privileged interlocutor of the purchaser until delivery, the date of which is fixed by the signing of the sales contract (authentic deed before a notary).
Specificity of off-plan sales : the phasing of payments
Payment of the price of the property is made as the construction progresses. Each stage of the work thus corresponds to a percentage of the total cost to be paid. This phasing is strictly framed by the Construction and Housing Code, which sets intermediate ceilings in order to protect the interests of buyers.
As part of a VEFA, the progress of the work can be broken down into 8 stages which are:
- The opening of the site
- Completion of the foundations
- The pouring of the first concrete slab
- The elevation of the walls
- Putting out of water
- Installation of exterior joinery
- Completion of the work
- The delivery
At each of these stages, when they are validated and certified as compliant, the purchaser pays a percentage of the total price, until the payment of 100% on delivery is reached, including the last 5% paid at the time of keys delivery.
The Construction and Housing Code only retains the three stages of foundation, waterproofing and completion to set the phasing ceilings.
The promoter will thus be able to claim from the purchaser a maximum of 35% of the total price upon completion of the foundations, 70% upon removal from the water, and 95% upon completion of the work. During the other stages, the rates must therefore be set on the basis of these ceilings, reached by cumulation. The last 5% must be paid upon delivery of the keys.
In the case of a VEFA mortgage, the bank releases the sums of money requested by the promoter as and when funds are called.
Good to know : For your VEFA mortgage, you can ask your bank to defer the start of the repayment of the capital. In this way, from the first release of funds by the bank until the end of the work, you can be content to pay only loan interest, or interim interest. The advantage is that you can start the loan repayment only when you enter your new home.
Reservation contract and sales contract
The purchase of a house or an apartment off plan requires the signing of a reservation contract, which is accompanied by a security deposit of 5% of the total price of the lot concerned in the case of a delivery expected within 1 year, and 2% of the total price if delivery is expected within 2 years. After signing a VEFA reservation contract, you have 10 days to retract.
The reservation contract must include mandatory information on the characteristics of the property, the delivery time, and the conditions of withdrawal. You will need to submit an application for a mortgage loan from a bank.
The transaction will be formalized through a sales contract signed before a notary when the site opens. Only the signing of this contract commits the buyer to payment, the schedule of which is then specified.
Compulsory off-plan guarantees
Very supervised, the sale in the state of future completion obliges the promoter to several guarantees intended to cover possible defects or damage:
- The guarantee of perfect completion: 12 months coverage against defects in workmanship or apparent defects noted upon receipt of the work.
- The two-year guarantee: 24-month coverage for poor workmanship in the finishing work.
- The ten-year guarantee: 10-year insurance against damage likely to compromise the solidity of the frame or its use.
- Damage insurance works which allows damage to be repaired quickly, even before the search for liability.
Good to know: There is also a guaranteed capacity, stipulating that the difference between the advertised area of the accommodation and its actual area must not exceed 5% maximum. Otherwise, a price reduction proportional to the missing area may be applied or a cancellation of the sale may be requested. Manufacturers generally commit to a lower% and errors are extremely rare on this point.
The advantages of VEFA
The purchase of new real estate under a VEFA has many advantages, in particular thanks to the strict supervision it enjoys, intended to protect the interests of buyers.
Opting for an off-plan sale offers the assurance of acquiring housing whose construction is approved by the various bodies concerned (town hall planning, CAUE and ABF), which respects the municipal PLU, the SRU law and thermal regulations in force. The product is also secure, since all the necessary technical studies are carried out upstream of the project and all the regulations in force are respected.
Responsibility for the construction of the work rests exclusively with the developer until delivery. The purchaser of an off-plan property is relieved of these concerns and enjoys the comfort of a single point of contact. Going through a promoter is also the guarantee of personalized support and a high level of service. The purchaser is in contact with a dedicated advisor from the sale to the handing over of the keys, and then benefits from an after-sales service after delivery.
Finally, the purchase of a new property allows you to benefit from reduced notary fees on the transaction, with a reduction of around 2.5% compared to a purchase of old property. Investing in real estate off-plan also allows tax savings thanks to the system provided for by the Pinel law. Finally, the promoters sometimes offer possibilities of customizing the property, and in this case you can signify your specific work requests when signing the reservation to obtain accommodation even more suited to your desires.
The key stages of buying off-plan housing
Barnes takes you through the 10 key steps to expect when buying off-plan property.
1) The search for real estate
Buying off-plan can involve several ways of visualizing future housing: 2D and 3D plans, models, virtual reality, visit to sample housing.
2) The signing of a reservation contract
The reservation of a lot in a state of future completion must be the subject of a contract with suspensive clauses signed by the future purchaser and by the real estate developer.
3) The security deposit
The reservation contract stipulates the amount of a security deposit, which will be paid into a blocked account until the final sale is signed.
4) The financing request
The reservation contract also sets, where applicable, a deadline for the purchaser to seek financing. It is generally 45 days.
5) The personalization of the accommodation
Upon signature of the reservation contract, and generally up to one month later, it is possible to request modification work. The request may be refused due to regulatory or technical constraints.
6) The signing of the deed of sale
The draft deed of sale is sent to the purchaser one month before the date of signature before a notary, for verification.
7) The various calls for funds
The payment of the sale price is staggered over the major stages of construction, with a ceiling of 35% of the total price to be paid after the completion of the foundations, 70% when the building is out of water, and 95% to completion.
The site is launched by the promoter when the marketing of the lots has reached 30% or 50% of the available goods. Construction takes around 9 months for a single-family house, and 16 to 24 months for a collective residential complex.
The keys are handed over during an on-site visit. 5% of the total amount of the sale price is retained until delivery to allow the purchaser to issue reservations on the conformity of the property.
10) Guarantee periods
Several guarantees allow the purchaser to notify the promoter of disorders, malfunctions or hidden defects: the deadlines after receipt of the work are 1 year for the guarantee of perfect completion, 2 years for the two-year guarantee (equipment malfunction) and 10 years for the decennial (hidden defects).
Contact our VEFA experts
Looking for an attic, a top floor apartment or any other type of off-plan property in Savoie, Haute Savoie or Ain? Discover new high-quality programs in the Geneva region near Lake Geneva, in the Pays de Gex, near Lake Annecy, around Lake Bourget, or even near the most beautiful Savoyard ski slopes! Contact the VEFA experts from our BARNES Mont-Blanc agencies now to find out more, and benefit from advice and personalized support for your plan to purchase a luxury property.