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REAL ESTATE INVESTMENT under “ Vente en l ’ État Futur d ’ Achèvement ” ( VEFA )
The trend of purchasing property under VEFA , also known as “ off plan ” or “ sale before completion ” has become increasingly popular in Mauritius recently , and offers a particularly attractive option for potential first-time home buyers , largely because of the staged payment nature of the transaction .
It entails buying a property which has yet to be built , or before construction is complete , based on the plans for the building .
In terms of a VEFA contract :
• the buyer makes payment for the property according to a schedule of instalments and building progress , as laid out by the Civil Code ;
• the buyer is bound to pay the relevant amounts as work progresses , and
• the seller undertakes to deliver the property to the buyer once completed .
In so doing ,
• the buyer owns the land upon signing the Deed of Sale ,
• the building gradually becomes theirs as construction progresses , and
• on completion of construction , they own the property entirely .
In addition , the developer has to provide a “ Garantie de Fin d ’ Achèvement ” ( GFA ), or a “ Guarantee of Completion ”, so the buyer is assured of the protection of their investment in the event that the developer fails to meet his obligations . In terms of Article 1601-3 of the Civil Code , the schedule of payments for a property sold under VEFA is as follows :
25 %
Signing of the Preliminary Reservation Agreement
10 %
Completion of the foundations
35 %
Completion of the roofing
25 %
Completion of the building works ( the Sale Contract is signed )
5 %
On completion ( the date the keys to the property are handed over )
12