Understanding the VEFA Process for Purchasing Off-Plan Ski Properties in France
When it comes to purchasing an off-plan new-build ski property in France, the VEFA process, standing for “Vente en l’État Futur d’Achèvement” or Sale Before Completion, offers a highly regulated and secure framework for buyers interested in off-plan properties. This purchase method is particularly appealing for its protective measures towards buyers, offering more security than similar processes in other countries. Let’s delve into the steps involved in purchasing a property under the VEFA contract, using the example of a €750,000 3-bedroom apartment.
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Initial Steps: The Reservation Contract
The journey begins with the signing of a reservation contract, along with various appendices such as property plans, a technical description, and a summary of Natural & Technological risks. Essential documents like a copy of your passport, birth certificate, and proof of address are required. Importantly, this contract should also detail your mortgage finance information, with a separate memo available to explain the mortgage finance process in France.
Following the signing, a 10-day cooling-off period is provided, during which you can opt to withdraw from the purchase. To solidify your reservation, a 5% deposit of the purchase price is sent to the “Notaire,” a legal advisor overseeing conveyancing transactions in France. This deposit is securely held until the exchange of contracts is finalised (once the financial guarantee is in place to protect the customer against any financial problems the developer could run into. This guarantee is call the GFA (garantie financiere d’achevement).
Finalising the Purchase: The Acte de Vente
The Notaire plays a crucial role in advancing the process, issuing an official notification for the “Acte de Vente” or Deeds of Sale once the completion guarantee for the development is in place and construction has commenced. A meeting is then scheduled for the signature of these deeds, which can occur directly at the Notaire’s office or via proxy for those unable to travel. A 30-day timeframe is typically allowed to complete this step, requiring the necessary funds to be transferred to the Notaire in advance.
The Payment Structure: Stage Payments
A distinctive aspect of the VEFA contract is the stage payment system (“l’appel de fond”), which aligns payments with the progression of construction phases. Payments are made as percentages of the total purchase price, corresponding to the completion of specific construction milestones.
Typically a 5% deposit / 30% terracing & foundations / 70% roof stage (airtight) / 95% completion / 100% delivery
Example of Stage Payments for a €750,000 3-Bed Apartment
Assuming a typical stage payment structure, here’s how it might break down for a €750,000 new-build ski property sold off-plan:
- Reservation Deposit: Upon signing the reservation contract, a 5% deposit is paid, amounting to €37,500.
- Start of Construction: Upon commencement, typically 35% is due, minus the deposit, equating to €262,500.
- Completion of Foundations: At this stage, an additional 15% is payable, which would be €112,500.
- Building Watertight: On reaching a watertight stage, another 15% is expected, totalling €112,500.
- Completion of Partitioning and Plumbing: At this point, 25% is due, or €187,500.
- Delivery: Upon completion, the remaining balance is settled, which could be the final 5% (€37,500), assuming the previous stages add up to 95%.
Taking Ownership: Delivery
The conclusion of the VEFA process is marked by the delivery of the property. You will be invited to an official handover event, accompanied by a developer’s representative, to receive your new home. This milestone signifies the completion of construction and the beginning of your ownership.
The VEFA process, with its structured approach and protective measures, offers a transparent and secure path to owning off-plan property in France. Through stage payments and regulated steps, buyers can navigate their purchase with confidence, looking forward to taking ownership of their new home.
