New build apartments and buying off-plan
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 décor 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%.
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.