Off-plan property acquisition has become the new trend since several years in Mauritius. This implies buying a property from architects' drawings and where the construction is only at the planning stage. The name for this type of contract for ' Buying off-plan' is known as a VEFA ( Vente en l'etat future d'achevement).
A legal point of view of the 'VEFA'
A VEFA is regied by the French Civil Code ( As a result of the country's colonial past , the Mauritian Civil law is based on French civil law) and has to be legalized by a contract. In other terms, VEFA contracts are governed by the same rules , totally protective of buyers, as those established by the French Civil Code. So under the VEFA, the promoter is obliged to provide a financial guarantee, a GFA ( Garantie Financiere d'achevement). This financial guarantee ascertain the purchaser that construction will be duly finalized in case of failure in obligations from the promoter's side (bankruptcy). The financial guarantee is to be produced by the promoter himself or a third-party, namely a bank.
The way VEFA works?
Under the VEFA, purchasers have the possibility to effect payments by installments in regards to the construction works progress. Future owners have the autonomy to participate in the design of their dream homes' plans. A key element of the VEFA contract is that the land ownership passes to the purchaser upon execution of the deed of sale. Meanwhile, building ownership only passes to the buyer upon completion of construction.
The deed of Sale
An off-plan property acquisition is concluded according to two specific procedures, each of which is legalized by a contract, in particular the Reservation contract and the Final Sale contract.
The reservation contract
Under an off-plan acquisition, in order to prove his firm intention to buy the property, the purchaser will have to sign a ' a preliminary reservation agreement' where he legally agrees to buy the property according to the various clauses included in it. It must be in a written form and must contain some related mandatory information. Once signed, the purchaser has to make a deposit, that will be deposited normally on a special account opened by the notary in charge of the sale.
The final Sale contract
The final sale contract stood for the title deed. It asserts the rights and obligations of the vendor until the construction works are finalized. So, one month prior to the signature, the purchaser receives the contract sent to him by the vendor. This will enable the buyer to cross check if the project is in conformity with the original commitments. This one month notice has been granted to allow the buyer to analyze meticulously all the elements of the title deed before the final signature.
Installments of payment
In accordance to the Article 1601-3 of the French Civil Code, the installments for a property sold under VEFA are as such:
- When signing the purchase agreement: 25%
- When foundations have been completed:10%
- When the roofing has been completed:35%
- When the construction works have been completed:25%
- On the day the keys of the property are handed over to the purchaser: 5%
® by Fatismet Properties Co Ltd