Buying Off Plan (VEFA): Buyer's Guarantees and Remedies for Late Delivery or Defects

Buying off plan attracts a growing number of purchasers, drawn by reduced notary fees, the energy performance of new-build homes and the possibility of customising their home. But signing for a property that does not yet exist carries concrete risks: a building site that falls six months behind, an apartment delivered with defects, cracks that appear two years after moving in. French law protects the purchaser through a mandatory (public policy) regime, but it remains necessary to know which levers to use and when. This guide sets out the guarantees available to the buyer in a VEFA (vente en l'état futur d'achèvement, sale of property off plan), the procedure for recording reservations at handover, and the remedies available against the developer in the event of late delivery or defects.

What an off-plan property purchase (VEFA) actually involves

The sale of property off plan (VEFA) is defined by Article 1601-3 of the French Civil Code: the purchaser becomes owner of the land and of the existing constructions as they are built, while paying the price as the works progress. In practical terms, the buyer pays for a property that is being built and which they take possession of only on completion.

This type of sale is governed by Articles L.261-1 et seq. of the French Construction and Housing Code (CCH). Where the property is intended for residential use, these rules are mandatory: the developer cannot derogate from them by a contractual clause, and any contrary stipulation is deemed unwritten.

The reservation contract, often wrongly called a "preliminary sale agreement"

Many purchasers speak of a "VEFA preliminary sale agreement (compromis de vente)". The expression is misleading. In an off-plan sale, the first step is not a compromis de vente but a reservation contract (or preliminary contract), governed by Article L.261-15 of the CCH. This document binds the reserving purchaser and the reserving seller before the notarial deed of sale is signed at the notary's office.

The reservation contract must state the approximate living area, the number of rooms, the location of the property within the building, the quality of the materials, the estimated price and the expected date for signing the deed. It may be accompanied by a deposit paid into an escrow account. Its amount is capped by Article R.261-28 of the CCH:

• 5% of the price if the deed of sale is to be signed within one year
• 2% if that period is between one and two years
• no deposit if the period exceeds two years

The final deed of sale, signed at the notary's office, restates and completes these elements in accordance with Article L.261-11 of the CCH. It is the deed that transfers ownership and fixes the final price, the payment schedule and the delivery date.

Withdrawing after signature: the ten-day period

A non-professional purchaser has a right of withdrawal of ten days, provided for by Article L.271-1 of the CCH. The period runs from the day after the first presentation of the letter notifying them of the signed reservation contract. During these ten days, the reserving purchaser may withdraw without giving a reason and without penalty: the deposit is refunded to them in full within twenty-one days.

Drafting a withdrawal letter for a VEFA property purchase

Withdrawal must be exercised by a means giving a certain date. In practice, the withdrawal letter for a VEFA property purchase is sent by registered letter with acknowledgement of receipt, or by any other means offering an equivalent guarantee of receipt (hand delivery against a signed receipt, document served by a commissaire de justice (bailiff)). The content must be unambiguous: identification of the reserving purchaser, reference to the reservation contract, date of signature, and a clear intention to withdraw.

The point requiring care is the date. The period is counted from the actual presentation of the notification letter, not from its drafting. Keeping the acknowledgement of receipt and the postal stamp is therefore decisive in the event of a dispute over compliance with the ten days. Once this period has expired, the purchaser remains bound and can only be released in the cases provided for in the contract (refusal of a loan under a condition precedent, in particular).

Staged payment and the financial completion guarantee

In a VEFA, the purchaser does not pay the price in one go. Article R.261-14 of the CCH strictly regulates the staging of payment calls, which may not exceed:

• 35% of the price on completion of the foundations
• 70% on the building being made watertight (roof in place, building enclosed)
• 95% on completion of the building

The balance of 5% falls due on delivery. This final payment plays a protective role, to which we return in connection with reservations.

The most important protection against developer default is the financial completion guarantee (garantie financière d'achèvement, GFA). Since the decree of 25 March 2014, applicable to contracts signed from 1 January 2015, only the so-called extrinsic guarantee is permitted for sales of buildings for residential use: it is issued by a credit institution, a finance company or an insurance undertaking, pursuant to Article L.261-10-1 of the CCH.

In practical terms, if the developer fails before the works are finished, the guarantor funds the completion of the works or reimburses the sums paid. Take a couple who have paid 70% of the price of an apartment whose developer is placed in compulsory liquidation when the building has only reached the watertight stage: the GFA allows the construction to be completed by another contractor, without the purchasers having to pay twice. The presence and identity of the guarantor must be checked in the deed of sale: it is a mandatory statement. The position of purchasers and subcontractors faced with a property developer in court-supervised reorganisation (redressement judiciaire) is analysed in our article devoted to that situation.

Delivery and acceptance: the decisive moment for reservations

Delivery is the moment when the developer hands over the keys to the purchaser and the purchaser takes possession of the property. It is the most important stage of the process, because it is where defects are recorded and the guarantees are triggered.

Two notions that are often confused must be distinguished. Acceptance of the works (réception) is the act by which the developer (as client of the works) declares that it accepts the works carried out by the construction contractors; it starts the running of the completion, two-year and ten-year guarantees. Delivery is the handing over of the property to the purchaser. For the buyer, the practical milestone is delivery, recorded in a report.

Recording reservations at delivery

At delivery, the purchaser must examine the property carefully and record in writing, in the delivery report, all apparent defects: cracked tiling, a door that closes badly, sloppy paintwork, missing equipment or equipment not conforming to the contract, floor area smaller than advertised. These observations are the reservations (réserves).

Article 1642-1 of the French Civil Code allows the purchaser to report apparent defects and non-conformities either at delivery or within one month following taking possession. It is therefore prudent to carry out a second inspection after a few days of use to identify what escapes a first examination (heating problem, water ingress, faulty taps and fittings).

The buyer's financial leverage lies in the 5% balance. Where reservations have been recorded, Article R.261-14 of the CCH allows the purchaser to deposit this balance with a third party (notary, Caisse des dépôts) until the reservations are lifted. This consignment is a powerful means of pressure: the developer recovers the last 5% only once the defects have been corrected. Simply refusing to pay would, on the other hand, be a fault; the sum must be consigned, not withheld.

Late delivery and contractual penalties

Late delivery is the most frequent source of disputes in VEFA. The deed of sale sets a delivery date or period, sometimes expressed by quarter ("delivery scheduled for the third quarter"). The law does not impose a scale of penalties: their amount and terms depend on the penalty clause set out in the contract.

Two difficulties arise in practice. First, contracts often provide for legitimate grounds for suspending the period: bad weather, strikes, default of a contractor, third-party challenges to the building permit. These grounds postpone the delivery date without giving rise to compensation, provided they are genuine and justified. A developer cannot invoke bad weather indefinitely to mask poor organisation of the building site.

Second, contractual penalties are sometimes derisory in relation to the loss suffered. A purchaser who has to extend a rental lease or pay double rent for several months may suffer a loss greater than the penalties provided for. Case law accepts that the court may revise a penalty clause that is manifestly derisory or excessive, and that the purchaser may claim compensation for their actual loss where they show fault on the developer's part going beyond the mere operation of the clause.

Remedies against the developer in the event of delay

Faced with delay, the first step is to send the developer a formal notice (mise en demeure) by registered letter with acknowledgement of receipt, recalling the contractual delivery date, the delay observed and the penalties due. This step is essential: it is the formal starting point of the dispute and puts an end to silence.

If the developer does not reply or disputes the claim, several routes open up. The purchaser may bring proceedings before the judicial court (tribunal judiciaire) to obtain payment of late-delivery penalties and, where appropriate, additional damages covering the loss not compensated by the penalty clause (double rent, storage costs, loss of enjoyment). In cases of serious deadlock, where the delay is such that it deprives the contract of its purpose, termination of the sale at the developer's fault may be sought, with repayment of the sums paid.

Anticipation remains the best protection. Before the deed is signed, a careful review of the delivery clause, the grounds for suspension and the amount of the penalties makes it possible to negotiate more balanced terms. An informed purchaser sometimes obtains the removal of overly broad grounds for suspension or an increase in the daily penalties.

Overview of the guarantees after delivery

Once the property has been delivered, the purchaser benefits from the same cascade of statutory guarantees as in a conventional construction. These guarantees are cumulative and succeed one another over time. The choice of the guarantee to rely on according to the nature of the defect is detailed in our article on the ten-year guarantee, the two-year guarantee and the completion guarantee.

The completion guarantee (garantie de parfait achèvement)

The completion guarantee, provided for by Article 1792-6 of the French Civil Code, covers for one year from acceptance of the works all defects notified, whether or not they were the subject of reservations at delivery or appeared during the year. It requires the contractor, and the developer as seller, to remedy all defects notified, whatever their seriousness. It is the broadest guarantee in its scope, but the shortest in time.

In practice, for defects noted in the apartment (finishing cracks, poorly adjusted joinery, plumbing defects), the purchaser sends the list of defects to the developer by registered letter referring to the completion guarantee, and sets a reasonable period for repair.

The two-year functioning guarantee (garantie biennale de bon fonctionnement)

The two-year guarantee, or functioning guarantee, is provided for by Article 1792-3 of the French Civil Code. It covers for two years from acceptance of the works the items of equipment that can be separated from the structure, that is, those that can be replaced without damaging the construction: roller shutters, taps and fittings, individual boiler, entry phone, hot water tank. If one of these items of equipment breaks down within the two years, the purchaser may require its repair or replacement.

The ten-year guarantee in a VEFA (garantie décennale)

The ten-year guarantee in a VEFA derives from Article 1792 of the French Civil Code. It covers for ten years from acceptance of the works damage that compromises the structural soundness of the building or renders it unfit for its purpose, as well as damage affecting an item of equipment that forms an inseparable part of the structure. It applies to major structural defects: subsidence of foundations, widespread water ingress through the roof or façade, through-cracks, lack of watertightness making the property uninhabitable.

This guarantee is backed by the construction damage insurance (assurance dommages-ouvrage) that the developer is required to take out before the start of the works pursuant to Article L.242-1 of the French Insurance Code. Its value is decisive: it allows the purchaser to obtain pre-financing of repairs without waiting for a court to establish liability. The construction damage insurance certificate must be handed to the purchaser; it must absolutely be requested and kept, because it will be required on resale.

In practical terms, the ten-year guarantee in a VEFA works in the same way as for a detached house. A co-owner who discovers, three years after delivery, recurring water ingress through the façade making a bedroom uninhabitable falls within the ten-year guarantee: they notify the claim to the construction damage insurer, who must take a position and, where appropriate, pre-finance the works. Where the house is built under a detached house construction contract (contrat de construction de maison individuelle, CCMI), the remedies in the event of delay or abandonment of the site are dealt with in our article on CCMI disputes.

Co-ownership charges and VEFA: a point often overlooked

The off-plan purchase of an apartment almost always entails joining a co-ownership (copropriété). From delivery, the purchaser becomes a co-owner and must pay the co-ownership charges in a VEFA corresponding to their share of the common parts. These charges start to run on taking possession, even if the building is not yet fully occupied.

A point requiring care concerns the first period in the life of the co-ownership. As long as all the lots are not sold, the developer remains owner of the unsold lots and must bear the charges on them. It must be checked that the forecast budget voted reflects reality and that the developer bears its share on the lots it retains. In addition, certain defects affecting the common parts (hall, roof, façade, lift) fall within the statutory guarantees and must be pursued by the syndicate of co-owners, not by each purchaser individually. Coordination between the purchaser's individual action on their lot and the syndicate's collective action on the common parts is essential so as not to allow a remedy to become time-barred.

Finally, the purchaser must pay attention to the forecast amount of charges announced at the time of reservation. An estimate that is manifestly understated by the developer to make the transaction attractive may hold unpleasant surprises once the co-ownership is operating.

Conclusion

Buying in a VEFA is not a gamble: it is a transaction framed by an arsenal of mandatory rules that genuinely protect the purchaser, provided the purchaser understands how they work. The main line to remember is chronological. Before signing, everything depends on reading the reservation contract and then the deed of sale: presence of the financial completion guarantee, identity of the guarantor, delivery clause, grounds for suspension of the period and amount of the penalties. At delivery, everything depends on the rigour of the reservations and the use of the leverage of the 5% consigned. After delivery, the cascade of completion, two-year and ten-year guarantees offers ten years of protection, provided defects are notified within the right time limits and under the right guarantee.

The decisive reflex, too often neglected, is never to sign the delivery report without having recorded in it all the defects noted and without having checked that the construction damage insurance certificate has been handed over. Before signing your deed of sale, have the delivery clause and the terms of the completion guarantee reviewed by a real estate law professional: it is at this stage, and not after the dispute, that the balance of the contract is negotiated.

Frequently asked questions

Is the VEFA reservation contract a preliminary sale agreement (compromis de vente)? No. In a VEFA, the first step is a reservation contract (preliminary contract) governed by Article L.261-15 of the French Construction and Housing Code, and not a compromis de vente as in the sale of existing property. It precedes the notarial deed signed at the notary's office, which alone transfers ownership. The expression "VEFA compromis de vente" is therefore a common misuse of language but legally inaccurate.

What is the time limit for sending a withdrawal letter in a VEFA? A non-professional purchaser has ten days pursuant to Article L.271-1 of the CCH. This period runs from the day after the first presentation of the letter notifying the signed reservation contract. The withdrawal letter for a VEFA property purchase must be sent by registered post with acknowledgement of receipt, and the deposit is refunded within twenty-one days.

What should be done in the event of late delivery by the developer? A formal notice must first be sent by registered letter recalling the contractual date and the delay. If the developer does not react, the purchaser may bring proceedings before the judicial court to obtain the late-delivery penalties provided for in the contract and, if they can show a greater loss (double rent, ancillary costs), additional damages. First check the grounds for suspension of the period stipulated in the contract, as bad weather or challenges to the permit may legitimately postpone delivery.

How long does the ten-year guarantee last in a VEFA? The ten-year guarantee in a VEFA lasts ten years from acceptance of the works, pursuant to Article 1792 of the French Civil Code. It covers defects compromising the structural soundness of the building or rendering it unfit for its purpose, such as widespread water ingress or structural cracks. It is backed by the construction damage insurance taken out by the developer, which allows rapid pre-financing of repairs.

Can I refuse to pay the remaining 5% if there are defects? The purchaser must not simply withhold the balance, which would be a fault, but may consign it. Article R.261-14 of the CCH allows the 5% to be consigned with a third party (notary, Caisse des dépôts) for as long as the reservations recorded at delivery have not been lifted. The developer recovers this sum only after the defects have been corrected, which is an effective means of pressure.

From when are co-ownership charges payable in a VEFA? Co-ownership charges in a VEFA are due from delivery, that is, from taking possession of the property, even if the building is not fully occupied. The developer remains liable for the charges relating to the unsold lots it retains. It is prudent to check the forecast budget voted and whether the estimate of charges announced at reservation is realistic.

What is the difference between acceptance of the works and delivery in a VEFA? Acceptance of the works (réception) is the act by which the developer accepts the works of the construction contractors; it starts the running of the completion, two-year and ten-year guarantees. Delivery is the handing over of the property to the purchaser, recorded in a report on which they note their reservations. For the buyer, the practical milestone is delivery, but the guarantee periods are counted from acceptance of the works.