Main features of VEFA:
Legal implications of VEFA
As a former French colony, the legal framework governing real estate in Mauritius is the French Civil Code. It requires that VEFA be binding by a contract. Under the VEFA, the promoter must provide for a GFA (Garantie financière d’achèvement).
The GFA is a financial guarantee which acts as a safeguard for the buyer if the promoter cannot respect his commitments. The GFA can be provided by either the promoter himself or a third party such as a bank.
The Sales contract
Investors in the real estate sector in Mauritius are increasingly going for off-plan property acquisitions. This type of acquisition means purchasing a property based on the architects’ drawings as the construction is at its planning stage.
“Buying off-plan” is commonly known as a VEFA (Vente en l’état future d’achèvement).
How does VEFA work?
According the provisions of Article 1601-3 of the French Civil Code, payments of a property sold under VEFA are thus scheduled :
Article by Know House