There are in fact a number of promising advantages about
buying new build property, not least because everything is
usually up to a very high technical standard and you know
that everything is going to work with the peace of mind
that no expensive refurbishment bills will crop up for a
number of years. When a new property is built it must come
with a building insurance certificate (assurance
dommage-ouvrage) which means that any structural defects in
the first 10 years are covered and paid for by the
insurance company. If you like the idea of a brand new
property where you can choose the decor before it is built
and don't mind waiting a year or more for the property to
be built then buying off-plan could be the way to go. It is
also not uncommon for properties to be worth more than you
paid for them once they have been completed and ease of
rental makes them a good investment. For guaranteed rental
schemes the "leaseback" option is also proving to be very
popular amongst investors and can be found within our
portfolio.
The off-plan home
The building of new property in France is highly regulated
and must conform to a high level of criteria and the
contracts are very much in favour of protecting the buyer's
interests, making it a very safe and enjoyable way to buy
your new apartment or house. Often buying in such a
development is fairly hassle free and there is always a
management company in charge of the day to day running of
the development from minor repairs to mowing the lawns and
cleaning the swimming pool. These apartments or houses are
usually very easy to rent out as they come ready to move in
to and are generally very appealing to holiday makers.
These developments are usually in very good locations with
good views and if on the coast then generally not too far
from the beach. The other added bonus is that quite often,
if it is a new build holiday apartment on the coast, the
type of people buying are likely to be in a similar
position to you in that they are looking for a holiday home
for a few weeks a year with it being rented out for the
rest. Hence it can be a good way to make friends who you
can visit when down there. You do however have to pay VAT
on the property which will be included in the sales price
but this means that you will only have to pay about 3%
notaire fees rather than the typical 7-8%
Payment schedule
As iterated before the buyer is well protected within the
contract for these types of sales and will only pay when
certain stages are complete. It is common to only pay a 5%
deposit on signing the preliminary contract unlike the
usual 10%, with the remaining stage payments following as
stipulated in the contract which normally progresses as
follows- After the deposit, the first payment of 25% is
usually paid once the foundations have been laid at which
time you will have to sign the "acte authentique" making
you the legal owner of the property and pay the notaire
fees of about 3%. Further payments will follow as each
stage is completed until 95% has been paid. You will then
be able to view the property once completed and pay the
remaining 5%. Properties are generally sold six months or
so before construction begins possibly with the remaining
few being sold during construction so there is usually a
good 18 month wait. This is of course subject to delays
either through weather or delivery problems but once the
foundations are laid and the "acte authentique" (final
contract) signed then you will be given a specific quarter
in which it shall be finished.
How apartment blocks are run
On purchasing an apartment in France regardless of whether
it is on the Riviera or Paris there are certain rules which
govern the way that they are run which do not change from
region to region. When you buy an apartment you own part of
a communal freehold and you agree to pay your share of the
upkeep of the building which may include repairing the
walls or roofs or laying new carpet in the stairs and
shared corridors etc. Therefore if you are not buying a new
apartment you should check in what state of repair
expensive items such as roofs are in by sending in a
surveyor. The costs of any communal repairs or decisions
on anything to do with the apartment block are discussed by
the co-owners (coproprietaires) in an annual meeting and
votes are taken to pass particular agendas. These agendas
could also include what management company they employ to
run the apartment block from day to day.
----------------------------------------------------
Nick Dowlatshahi is an expert on the French property market
and managing Director of Leapfrog Properties. Leapfrog
Properties is a French Property agency which specialises in
property sales across France.
http://www.leapfrog-properties.com
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