How do you buy off-plan (VEFA): guarantees and payment schedule?
VEFA, or off-plan purchase, makes you owner as the construction progresses. The developer must provide a financial completion guarantee and comply with a payment schedule capped by law (35% at the foundations, 70% weathertight, 95% at completion, balance on delivery).
The principle of the sale in a future state of completion
VEFA (sale in a future state of completion), governed by Articles L.261-1 and following of the French Construction and Housing Code, is the contract by which you buy a home to be built or under construction. You become owner of the land and the existing constructions from signing, then of the future works as they are carried out, paying through staggered fund calls.
The purchase takes place in two stages: a preliminary reservation contract (optional but almost systematic), and then the authenticated deed of sale received by a notary, which details the price, the specifications, the schedule and the estimated delivery date.
The legal guarantees protecting the buyer
The off-plan purchase is very tightly regulated. The financial completion guarantee (GFA) is mandatory: it is an extrinsic guarantee given by a third party (bank or insurer) that ensures the building's completion even if the developer defaults. For sales whose building-permit application was filed from 1 January 2015, it can no longer be intrinsic.
On delivery, you benefit from a base of construction guarantees, as with any completed new home.
- Financial completion guarantee (GFA): completion ensured despite a developer default
- Guarantee of perfect completion: repair of defects reported in the first year
- Two-year guarantee: proper functioning of separable equipment
- Ten-year guarantee (décennale): damage compromising the solidity or making the structure unfit for its purpose
- Structural-damage insurance taken out by the project owner (the developer), from which the buyer benefits as owner, to pre-finance repairs falling under the ten-year guarantee
The schedule of fund calls
You do not pay everything at once: the payments follow the progress of the construction site, within limits strictly capped by Article R.261-14 of the French Construction and Housing Code. No developer can demand more at each stage.
A security deposit may be requested at reservation. It is capped by Article R.261-28 of the French Construction and Housing Code: 5% of the price if the sale is to take place within one year, 2% if it is to take place within one to two years, no deposit beyond that. It is placed in an escrow account. On delivery, hold back the final 5% if reservations are raised in the acceptance report, until they are cleared.
- 35% of the price at most at the completion of the foundations
- 70% of the price at most at the weathertight stage (roof completed)
- 95% of the price at most at the completion of the building
- The balance of 5% on delivery (handing over the keys)
Frequently asked questions
Can you withdraw after signing a VEFA reservation contract?
Yes. The non-professional buyer has a 10-day cooling-off period after notification of the reservation contract, under Article L.271-1 of the French Construction and Housing Code. The security deposit paid is then refunded to them.
What happens if the developer goes bankrupt?
The financial completion guarantee comes into play: the guarantor (bank or insurer) finances the building's completion. This is the main safeguard of VEFA, mandatory and extrinsic for operations whose permit was filed since 2015. Always check its existence in the deed of sale.
Can you refuse to pay in the event of a delivery delay?
The schedule remains tied to the actual progress of the construction site: you only pay a fund call if the corresponding stage is reached. In the event of a delay, contractual penalties may be provided. Have the progress precisely recorded before any payment.
Do you need a notary for a VEFA purchase?
Yes, the VEFA deed of sale must be received by a notary. The preliminary reservation contract can be signed by private deed or directly at the developer's, but the final sale is authenticated and published with the land registry service.
Read next
- Code de la construction et de l'habitation, articles L261-1 et suivants (Légifrance)
- Code de la construction et de l'habitation, article R261-14 (échéancier) (Légifrance)
- Code de la construction et de l'habitation, article R261-28 (dépôt de garantie) (Légifrance)
- Code de la construction et de l'habitation, article L261-10-1 (garantie d'achèvement) (Légifrance)
- Service-Public.fr - Achat d'un logement en VEFA (F2961)
- Notaires de France - Acheter sur plan (VEFA)
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