BUYING OFF-PLAN IN MAURITIUS
Category Buying
When it comes to real estate transactions in Mauritius, the trend that is being observed of late is off-plan property acquisition. This simply implies buying a property from architects' drawings where the construction is only at the planning stage. The common name of the "Buying off-plan" contract is known as a VEFA (Vente en l'état future d'achèvement).
How does the VEFA work?
Under the VEFA, buyers are able to perform payments by installments according to the construction works progress. Future owners may contribute to the design of their dream homes' plans. One of the main features of a VEFA contract is that land ownership passes to the buyer upon execution of the deed of sale. On the other hand, building ownership only passes to the purchaser upon completion of constructions.
From a legal point of view A VEFA is governed by the French Civil Code (Mauritian civil law is based on French civil law as a result of the country's colonial past) and has to be validated by a contract.
In simpler terms, VEFA contracts are directed by the same rules, totally protective of buyers, as those laid down by the French Civil Code. Under the VEFA, the promoter is bound to provide for a GFA (Garantie financière d'achèvement), a financial guarantee which ensures the buyer that construction will be duly completed in case of failure in obligations from the promoter's side. (bankruptcy). It is either the promoter himself who shall provide this financial guarantee or a third-party, for instance a bank.
Author: Life in Mauritius