My guarantees and insurances when I buy an off-plan property in France
When you are looking for a new-build property in France, it is usually not built yet. We say then that you buy off-plan. “How can I be sure that my French off-plan property purchase will be the one I signed for?” You might ask yourself.
When you buy a new apartment or a new house off-plan, you sign a contract of sale for a property in future state of completion (VEFA in French, Vente en Etat Futur d’Achevement). The definition of the off-plan contract is that it ensures and guarantees your home. It legally guarantees that your new home to be delivered corresponds to the description presented on the floor plan and in the technical description/brochure. In addition, it ensures your new French property will benefit from the 10-year new-build guarantee, against possible faults that may arise.
Discover the different guarantees and VEFA insurance (ten-year guarantee, financial guarantee of completion …) which you will benefit from when you buy your new property in France.
Guarantee of purchase price for an off-plan property in France (Garantie Prix Ferme et Definitif)
When buying your apartment or house off plan via the VEFA contract (see our new properties in French Alps), you are assured that the price will not increase, except hypothetical changes on your initiative (except VAT which can increase or decrease). Indeed, the only reasons that can lead to an increase in your purchase price are the possible changes you want to make when designing your home.
That is to say, that you are the guarantor of the evolution of the price according to the different options and modifications of arrangement that you will add during the technical meeting. It should be noted that changes will have to respect the laws and standards in force subject to a feasibility study by a technician. As you understand, the purchase price of the new property can not change without your consent, which ensures you to pay only the purchase price indicated for the service given at the time of signing.
Completion Financial Guarantee (Garantie Financiere d’Achèvement)
Definition of the financial completion guarantee with French new-build properties: it guarantees that your new home will be fully completed and delivered, regardless of any inconvenience encountered by the property developer during construction work.
The financial guarantee of completion is mandatory for the French real estate developer and you will not be able to exchange contracts unless this completion guarantee is in place. Your funds are then totally secure and if guarantee is not obtained by developer you are refunded the original deposit that you used to reserve the property. It is issued by a bank or insurer, and assures you that the new real estate program will have the necessary funds to be completed. Indeed, in the case of a possible financial difficulty, your home on plan is certain to be achieved through this deposit which will support the completion of the work. The financial completion guarantee (GFA) ends when the project is completed. You can stay confident, you are guaranteed the keys to your future home.
Perfect Completion Guarantee (Garantie de Parfait Achèvement)
Guarantee of perfect completion: it guarantees your new home against faults and poor workmanship that you could possibly spot during the first year of moving in, after handing over the keys.
The guarantee of perfect completion VEFA assures you of the conformity of your new housing after the handing over of the keys. It covers any disorders and defects that you may encounter during the first year. If you find a lack of conformity on your new apartment or new house during this period, you make a reservation. The company will then carry out the necessary work to restore imperfections. The real estate developer has every interest in properly checking the conformity of the work during key collection, because if there are defects, they will not be supported by the guarantee of perfect completion VEFA.
Two-year guarantee definition: it guarantees, in case of damage, the equipments present in your new house or your new apartment.
The two-year guarantee, also known as a guarantee of smooth operation (garantie de bon fonctionnement), covers all the removable fixture/equipment in your property as opposed to the unremovable fixtures like walls, roof, etc. That is, the equipment that can be removed without damaging the construction. Examples include windows, doors, partitions, tiles, plumbing fixtures, faucets, boilers, etc. This guarantee of good functioning allows you, therefore, if you note a failure, to renew its equipment in the case where it is not due to a lack of maintenance or a non-compliant use. The biennial warranty or operating guarantee is valid for the first two years after the delivery of your keys.
Ten-year guarantee definition: it guarantees the structural elements of your French home like walls, roof, etc.
The ten-year guarantee is obligatorily subscribed by the new property builder in the VEFA contract. This warranty is valid for up to 10 years after receiving your keys. It protects you against defects and poor workmanship compromising the work and its strength, making the house unsuitable for its original use. This concerns the inseparable elements of the new real estate, that is to say the non-separable elements of the construction. For example, we can mention the foundations, the frame, the facade or the pipes. Also, to understand the nature of the vices, here are some examples: crack on the facade, problem of tightness, bad behaviour of the roof or the frame, heating system not working correctly. The company then carries out the work to restore your new home. In definition, the ten-year guarantee perfectly ensures your new property for 10 years!
Property Damage Insurance (Assurance Dommages-Ouvrage)
Definition of damage insurance: it reimburses any costs related to the ten-year guarantee.
Compulsory damage insurance, reimburses all the costs covered by the ten-year guarantee, that is to say, being accepted by it. This insurance takes effect as soon as the guarantee of perfect completion comes to an end, ie 1 year after receipt. It ends 9 years later, 10 years after handing over the keys. The benefit of the property damage insurance is in the speed of repayment. Indeed, the payment of the costs is carried out by the insurance as soon as the vices or poor workmanship are noted, without being pronounced by a court the responsibility of the professional intervened. You are therefore assured not to leave the checkbook to advance the money of the work in case of concern found on your new house or new apartment. To specify that this is an insurance and not a damage-work guarantee. The difference is that an insurance meets the financial need, while the guarantee meets a need to note an anomaly.