Off-plan property purchases in France (VEFA): a legal guide for international buyers

Legal Framework: Construction & Housing Code and Urban Planning Code

Off-plan purchases in France are primarily governed by two statutes: the Code de la Construction et de l’Habitation (CCH) – the Construction and Housing Code – and the Code de l’Urbanisme – the Urban Planning Code. These laws work in tandem to regulate VEFA transactions:

• Construction & Housing Code (CCH): This code lays out the specific rules for ventes d’immeubles à construire (sales of buildings to be constructed), including VEFA. The CCH defines what a VEFA contract is and mandates its form and content. For instance, Article L.261-3 CCH (echoing Civil Code 1601-3) stipulates that in a VEFA the seller immediately transfers to the buyer their rights in the land and any existing structures, while the future constructions will become the buyer’s property as they are built. The buyer must pay the price in installments as the work advances, and the seller retains control of the project until the work is completed. The CCH also imposes consumer-protection measures: the contract must be executed by a notary as an authentic deed, certain clauses are compulsory, stage payments are capped by law, and the developer must provide financial guarantees (more on these below). Additionally, the CCH gives the buyer a statutory 10-day cooling-off period after signing (délai de rétractation) during which the buyer can back out without penalty.
• Urban Planning Code: The Urban Planning Code governs land use, building permits, and zoning – factors critical to any development. Before a VEFA sale can proceed to completion, the developer must have obtained a valid Permis de Construire (building permit) for the project. Typically, the sale contract will reference the building permit and its key details (permit number, date of issue, etc.), and it may be made conditional on the permit being final and free of challenge. The Code de l’Urbanisme ensures that the project complies with local planning rules, and no off-plan development can lawfully go ahead without this authorization. As a buyer, you should check that the permit has been granted and purged of any third-party appeals (recours des tiers) – your notary or lawyer will usually verify this. In essence, the Urban Planning Code protects you from investing in a project that isn’t legally cleared to be built. It also means that any significant changes to the project (location, size, use of the building, etc.) would require permit amendments, which in turn should be disclosed to you if they occur.

Together, these codes create a secure legal environment for VEFA purchases. They dictate everything from contract terms to construction standards and buyer remedies. For example, the law requires that a VEFA contract include a detailed description of the property (plans, specifications), the price and payment schedule, the expected delivery date, and the guarantee of completion or reimbursement provided by the developer[7]. The result is that international buyers can invest in French off-plan properties with confidence, knowing the process is codified and supervised by law.

Step-by-Step Process of a VEFA Transaction

Buying property off-plan in France involves a series of formal steps. Below is an outline of the legal process and what to expect at each stage:

1. Preliminary Reservation Contract (Contrat de Réservation): This initial contract, also called a contrat préliminaire, is optional but common in VEFA transactions. It’s essentially a reservation agreement where the developer promises to sell you the finished property in the future, and you promise to purchase it under agreed terms. The reservation contract will describe the proposed property (plans, floor area, number of rooms, location in the development, etc.), an estimated price, and an approximate delivery date. At this stage, you typically pay a reservation deposit into escrow. French law limits this deposit to 5% of the price if the final sale is expected within one year, or 2% if completion is 1–2 years away (No deposit can be taken if the delivery will exceed two years.) The deposit must be held in a special escrow account (often with a notary or bank) and cannot be touched by the developer until the sale is finalized. After signing the reservation, you have a 10-day cooling-off period to reconsider your commitment. During this time, you can cancel the reservation for any reason, and your full deposit will be returned to you (no fees or penalties) within 21 days. The reservation contract may include conditional clauses as well – for example, a financing condition (so if your mortgage is denied, the contract ends and deposit is refunded) or a clause allowing contract cancellation if the final price exceeds the initially forecast price by more than 5%. These legal provisions protect you during the interim between reservation and the formal sale.
2. Signing the Notarial Sale Contract (Acte de Vente en VEFA): A few months after the reservation (once conditions are met, such as the building permit secured and your financing approved), the final VEFA contract is signed. This is the definitive acte de vente, executed by a notary (acte authentique), which transfers title to you under the VEFA arrangement. French law requires that you receive a draft of this contract at least one month in advance of signing, so you have time to review it (and get it translated or checked by a lawyer). The contract itself will be very detailed. It must include: a detailed description of the property (plans, technical specs, location in the building), the final purchase price and how it will be paid in stages, any conditions for price revision (usually tied to a construction cost index), the delivery deadline for the completed property, and the financial guarantee that the developer has obtained (either a completion guarantee or a refund guarantee). It will also specify any penalty for your late payment (capped by law at 1% per month), and any relevant conditions suspensives (e.g. a clause confirming that if your loan hasn’t been obtained by a certain date, the sale can be canceled without loss). On the signing day, the notary will read the deed and the parties execute it, making you officially the owner of the land and any part of the building already constructed. At this point, the developer is legally required to have in place a financial guarantee for the project – this will be either a Guarantee of Completion or a Guarantee of Refund, issued by a bank or insurance company for your protection (explained in detail later). You will typically make an initial substantial payment at this stage (for example, if the building’s foundations are complete by now, you might pay up to 35% of the price, minus any deposit already paid). The notary will register the sale, and you become the owner of record of a property under construction.
3. Construction Phase and Stage Payments: After the sale deed, the project enters the construction phase (if it hasn’t already). One hallmark of VEFA is that payments are made in installments as the building progresses. Rather than paying the entire price at once, you pay according to construction milestones, which are usually outlined in the contract’s payment schedule (échelonnement du paiement). French law strictly regulates these stage payments: including the deposit, the total paid cannot exceed 35% of the price at completion of foundations, 70% when the structure is weatherproof (i.e. roof and exterior walls finished), and 95% upon full completion of construction. The remaining 5% is paid at handover of the keys, but a buyer can withhold this final 5% if there are disputes about contract conformity (more on this below). In practice, the schedule might be broken into finer increments (for example, 5% at purchase, then 30% at foundations, 35% at weatherproof, 25% at completion, and 5% at delivery – which still respects the legal maxima). Each call for payment from the developer must be accompanied by a certificated proof of progress – typically an architect’s certificate or attestation confirming that the construction stage in question has been reached. For example, an architect or technical controller will issue a certificate when foundations are finished, allowing the developer to request the next installment. Never pay a stage invoice without receiving this official attestation of work completion. If you are financing the purchase with a French mortgage, your bank will also require these certificates before releasing funds for each stage. The law permits the contract to include penalties if you pay late (often interest up to 1% per month on overdue sums), so be prepared to send each installment on schedule. To protect yourself, it’s wise to monitor the construction: ask for progress reports and, if possible, visit the site at key stages (with permission – construction sites are usually restricted). Many foreign buyers arrange for a local architect or inspector to represent them for interim inspections. By staying vigilant during construction, you ensure that what you’re paying for aligns with what’s being built.
4. Completion, Handover, and Post-Completion Warranties: Upon the building’s completion, a formal handover of the property to you will take place. This handover (delivery of the logement) is when you receive the keys and get to inspect your new property. It is critical to thoroughly inspect the apartment or house at this stage. You (and/or your surveyor) will walk through and verify that the property conforms to the plans and specifications in the contract (the notice descriptive), and note any defects or unfinished work. Any issues should be listed as réserves (snag items) in the handover report. If everything is in order, you will authorize release of the final 5% payment and take possession. If there are problems – for example, minor defects or missing items – French law allows you to withhold the final 5% of the price provided you formally consign it (deposit it with a stakeholder, such as the Caisse des Dépôts escrow service) until the problems are resolved. In other words, you don’t pay the developer that last portion directly if there’s a dispute; instead, the money is held in escrow, giving the developer an incentive to correct issues. Once the property is delivered, several statutory warranties kick in for your protection. First, there is the garantie de parfait achèvement (perfect completion guarantee) – for one year, the developer (and contractors) must fix any defects you report, whether noted at handover or that appear within the first year. Next is a biennial warranty (garantie de bon fonctionnement) of two years on movable equipment and systems (plumbing, heating, shutters, etc.) covering defects in those non-structural elements. Finally, there is the 10-year structural warranty (garantie décennale) for major structural defects affecting the building’s integrity or habitability. The developer is required to carry insurance (called assurance dommages-ouvrage) that backs up this 10-year warranty, so that if any serious structural issue arises, repairs can be financed without delay. These post-completion guarantees mean that buying new is especially safe: even after you’ve taken the keys, the law ensures you have recourse to get any construction issues remedied. Make sure at handover that the developer provides you with documentation on these warranties and the insurance policy certificates. After handover, you can enjoy your new French property – built to modern standards and protected by law.

Mandatory Financial Guarantees: Completion and Refund Protection

One of the most important safeguards for VEFA buyers is the financial guarantee that developers must provide by law. Before the final sale contract is signed, the developer must obtain a guarantee to secure the project’s outcome. There are two types of guarantees, and the contract will state which one is in place:

• Garantie Financière d’Achèvement (GFA) – Financial Guarantee of Completion: This is a completion guarantee. It means a bank or insurance company guarantees that the building will be finished even if the developer fails financially. If the developer cannot complete the construction (e.g. due to bankruptcy), the guarantor (bank/insurer) will either provide the funds or appoint contractors to ensure the property is completed and delivered to the buyers. Essentially, you get what you paid for – the home itself – albeit possibly with some delay if the guarantor takes over the project. A GFA is highly reassuring because it ensures you won’t be left with an unfinished structure.
• Garantie Financière de Remboursement (GFR) – Financial Guarantee of Refund: This is a refund guarantee. If the developer cannot finish the project, this guarantee ensures that you get back the money you’ve paid in installments. In such a scenario, you would be reimbursed all your stage payments (often via the guarantor stepping in to refund buyers) and the sale would be cancelled. You would recover your funds, but notably you would not get the property – effectively you lose the opportunity and time invested, ending up back at square one (perhaps with potential damages to claim for lost value, etc.). This guarantee protects your money, but not the completion of the home itself.

French law mandates that one of these guarantees be in place for residential VEFA developments. In fact, since January 1, 2015, the law has required that for homes sold to individuals, the guarantee must be extrinsic – i.e. provided by an external financial institution, not by the developer’s own promise. This effectively made the completion guarantee (extrinsic GFA) the norm, because a mere refund promise from the developer (so-called garantie intrinsèque) is no longer sufficient in most cases. The notary will demand proof of the guarantee (often a certificate from the bank/insurer) before allowing the sale to proceed. The VEFA contract itself will include an attestation or reference to the guarantee, confirming its existence. As a buyer, it is wise to insist on a completion guarantee. In practice, most reputable developers automatically provide a GFA, which is often obtained through a bank line of credit or a special insurance policy. This guarantee gives you peace of mind that you won’t be stuck with an unfinished building – the project will be completed or you’ll be made whole financially.

Tip: You should receive a copy of the guarantee certificate, or at least know the guarantor’s details. If a developer were ever unable to perform, you as the buyer have the right to contact the guarantor to invoke the guarantee. Fortunately, these guarantees rarely need to be called upon in France’s well-regulated market, but knowing you’re protected is essential for a sound investment.

Stage Payments and Work Completion Certificates

One distinctive aspect of buying off-plan is the schedule of stage payments (calendrier d’échelonnement des paiements) required by law. Unlike a normal home purchase where you pay the entire price at closing, a VEFA purchase spreads out payments over the construction period. The French Construction Code sets maximum percentages that the developer can ask for at various stages:

• Foundation Stage: Maximum 35% of the total price can be collected by the time the building’s foundations are completed. (This includes any deposit you paid; for example, if you paid a 5% reservation deposit, then at foundation completion the developer could ask for up to an additional 30% to bring the total paid to 35%)
• “Hors d’eau” Stage (Weatherproof Shell): Maximum 70% of the price by the point the structure is weatherproof (sealed from water) – meaning external walls are up, roof is on, and the building is closed in. At this stage, the property has a basic shell and won’t suffer weather damage.
• Completion of Construction: Maximum 95% of the price when the construction is fully completed. “Completed” here means all key construction work is done and the property is in a habitable state (all main systems and fixtures installed). Essentially, before the final handover, the developer can ask for up to 95% in total payment.
• Handover of Keys: The remaining 5% is due when the finished property is made available to the buyer (delivery/handover). However, if you as the buyer find any issues of non-conformity with the contract at the handover, you are legally allowed to consign (hold back) this final 5% in escrow until the issues are resolved. In practice, you would deposit the 5% with a notary or the Caisse des Dépôts rather than pay the developer directly, and that sum is released once the developer fixes the problems or an agreement is reached.

These stage payment caps are set in Article R.261-14 of the CCH and cannot be exceeded. A developer is free to ask for less at each stage or to break the stages into smaller increments, but they cannot demand more than the law’s ceiling at a given milestone. For example, some contracts for individual houses might schedule 20% at foundation, then additional payments reaching 85% at completion and 15% at handover – that’s also legal since it stays under the maxima. The key is that by law you will always have at least 5% of the price in your control until you get the keys and are satisfied.

Work Completion Certificates: With each stage payment request, the developer or builder should provide a certificate of completion for that phase. Typically, the project’s architect or an independent surveyor will issue an attestation d’état d’avancement des travaux (certificate of stage completion) confirming that, say, the foundations are done, or the building is now weatherproof. Do not release funds without this proof. In fact, if you have a mortgage, the bank will require these certificates as a condition to disburse each installment of the loan. This system keeps the payment tied strictly to progress – you only pay for what has actually been built. It’s a powerful protection against a rogue developer demanding money prematurely. If there’s a delay in construction, the payment schedule automatically stretches since no payment is due until the corresponding milestone is met.

Keep records of all such certificates and payment receipts. Upon the final completion, you should have a paper trail showing that each stage was signed off by a qualified professional. This can be useful for your own assurance and, if needed, in any dispute resolution.

Protecting Your Rights: Practical Tips for Foreign Buyers

Buying real estate in a foreign country can be daunting, but France’s VEFA process is designed to be transparent and secure. Here are some practical tips for international buyers to safeguard their interests and avoid common pitfalls:

• Engage Professional Advice: While the notary will handle the official conveyancing, remember that the notary is a neutral party – not your personal attorney. It’s wise to hire an independent lawyer (or a bilingual notaire of your choosing) to review the reservation agreement and sale contract, especially if you are not fluent in French. A real estate lawyer can explain the terms in plain English, negotiate any overly risky clauses, and ensure your rights are fully protected. This is where a firm like FRELA.law can be invaluable, guiding you through French legal documents and practices.
• Verify the Developer’s Credentials: Do some homework on the developer’s track record. Reliable developers should have a history of completed projects and satisfied buyers. Check if the developer is registered and in good financial health. Because the law now requires an external guarantee, the very presence of a bank’s completion guarantee is a good sign (a bank will only back a developer after due diligence). Nonetheless, it doesn’t hurt to ask for references or visit a previous development if possible.
• Ensure the Building Permit is Secured: Confirm that the building permit (permis de construire) for the project has been obtained and is final. If the permit was recently issued, there is usually a statutory period (often 2 months) during which third parties (like neighbors) could appeal it. A project that’s “purged” of any such recourse is ideal. The sale contract might explicitly state the permit details and that it’s free of challenges – verify that. If the permit or other regulatory approvals are still pending, make sure the contract includes a condition suspensive that allows you to cancel (with refund of your deposit) if these approvals don’t come through by a certain date.
• Understand the Contract and Specifications: The VEFA contract will have a detailed notice descriptive (specification document) listing materials, fixtures, and equipment to be provided. Review this carefully (with translation if needed) to ensure you know what you’re getting. This document is legally binding on the developer. Be aware that marketing materials (brochures, artist’s impressions) are not contractual – only the plans and notice attached to the contract truly count. If something in the glossy brochure is important to you (e.g. specific brand of appliance or a certain layout), ensure it’s written in the contract. French law is on your side here: if the completed property deviates significantly from what was promised – for example, a key feature is left out (say, an elevator that was in the contract plans is not built) or the size/quality is so reduced that the value drops over 10% – you have the right to withdraw and get your money back.
• Budget for All Costs: As an international buyer, remember that the purchase price in a new-build VEFA typically includes VAT (TVA) at 20%, and you will benefit from reduced notary fees (around 2–3% of price, instead of ~7–8% for older properties). The price stated is usually inclusive of VAT and covers the construction; you should verify if things like parking spaces or storage rooms are extra. There are no French property transfer taxes on new builds beyond the notary’s minimal registration fee. If you plan to rent out the property furnished, you might be eligible for a VAT rebate – consult a tax advisor for that. Also factor in currency exchange fluctuations (if buying in euros from a non-euro currency) and bank transfer fees for stage payments. It may be helpful to open a French bank account to facilitate the multiple payments.
• Stay on Top of Stage Payments: Mark the expected construction milestones on your calendar and be prepared when a payment is approaching. Upon receiving a call for funds, verify it comes with the required architect’s certificate. Do not pay blindly without that document. If you have concerns that work isn’t actually as advanced as claimed, raise the issue immediately – once paid, it’s harder to dispute. As a buyer, you have leverage before you pay. Additionally, ensure you fund the payments on time to avoid late penalties. If you anticipate any delay (for example, an international bank transfer taking longer), inform the developer to work out a solution.
• Right to Site Visits: Many developers restrict site access during construction for safety reasons. However, it’s reasonable to request the right to visit the site at certain stages (often it’s allowed during specific open days or by appointment with safety gear). Negotiate this upfront in the contract if possible – being able to see the progress can be reassuring, and it allows you to spot any major issues early. If you can’t visit, consider hiring a local surveyor or project manager to do so on your behalf and send you reports.
• Handover – Be Diligent: When the property is ready, you’ll be invited to the réception or handover appointment. This is effectively your final inspection. On that day, take your time. Test all lights, outlets, faucets; flush toilets; open and close doors and windows; examine walls and floors; and check that all items in the specification are present. Document any imperfections. Culturally, don’t worry about seeming “too picky” – developers expect snag lists. If there’s a cosmetic issue (like paint touch-ups or a scratch) or a missing piece (like an incorrectly installed fixture), note it. For serious issues, you can refuse to sign off completion until resolved. For minor issues, note them and agree on a timeline for fixes. Remember, you have the right to withhold the final 5% if needed, but you must do so by legally consigning it rather than just not paying. The notary or a special government escrow service can hold the money while the developer addresses the problems. This procedure protects both parties: the developer knows you have the money ready, and you have assurance the issues will be fixed to release it.
• Post-Delivery Follow-up: Even after a smooth handover, keep an eye on the property in the initial months. If any defect arises, notify the developer in writing (and keep proof). For the first year, they are obliged to fix any defect you report (this is the perfect completion guarantee). For two years, any equipment failures (e.g. built-in appliances, heating system) are covered – report those promptly to have them repaired under warranty. And for major structural issues up to 10 years, you would typically go through the developer’s insurance. It’s a good idea to schedule a thorough inspection of the property around the 11th month after completion to catch any latent defects and inform the developer before the one-year deadline, ensuring they are obliged to address them.
• Cultural and Legal Differences: International buyers should be aware that French property transactions are very formal. All official documents will be in French (an English translation, if provided, is for convenience but the French version prevails legally). Don’t sign anything you don’t fully understand. Also, note that verbal promises or side letters have no weight if not included in the notarized contract. France’s system is document-centric, so insist that everything agreed is put into the contract or its annexes. Lastly, unlike some countries, in France the notary handles title registration and tax formalities, so there is no separate title company or escrow company as you might have in the U.S. The notary acts somewhat like both a lawyer and an escrow agent combined, holding your deposit and stage funds (or instructing payments) and ensuring clear title. It’s a reliable system, but if you ever feel the need for extra assurance, that’s where your own lawyer’s counsel is helpful.

By following these tips and relying on the French legal safeguards, you can avoid pitfalls and make your off-plan purchase experience as smooth as possible.

Conclusion: Navigating VEFA Safely with Professional Support

Purchasing property through a VEFA in France can be an excellent investment, yielding a brand-new home built to modern standards, with lower purchase taxes and strong legal protections. France’s laws – from the Construction Code’s staged payments and guarantees to the Urbanism Code’s planning oversight – create a buyer-friendly framework that has attracted many international investors. The key is understanding the process and leveraging those protections. Always ensure the contract is comprehensive and compliant, the developer is reputable and backed by a solid guarantee, and that you remain an informed participant throughout construction and delivery.

While the VEFA process is highly regulated, it can still feel complex, especially if you’re unfamiliar with French legal language or practices. This is where engaging experienced advisors pays off. FRELA.law offers support services tailored to foreign buyers navigating French real estate transactions, including off-plan purchases. Our team can assist you at every step – reviewing contracts, monitoring compliance with the Code de la Construction et de l’Habitation, and liaising with developers and notaries on your behalf – to ensure your rights are secured.

In summary, buying off-plan in France is a well-trodden path protected by law. With thorough due diligence and the right guidance, international buyers can confidently acquire their dream property in France, en l’état futur d’achèvement, and look forward to receiving the keys to a completed home that meets all expectations. By being informed and well-advised, you’ll be able to enjoy the excitement of watching your French property take shape, knowing that your investment is legally safeguarded every step of the way.