Tuesday, June 29, 2010

New French Apartments and the Buying Process

If you can bear waiting a year or two for your property to be completed then buying off-plan in France can be an excellent way to purchase your holiday home or investment. They are built to high modern standards and kitted with modern equipment but crucially there is a 10 year guarantee on the building work so that any structural problems that arise in this time are fixed and paid for by the insurance company. You therefore have no expensive and unexpected renovation work to do and minimal hassle. Add to this the fact that most off-plan property increases in value by the time it is built and it is much easier to rent out than old property and you have an excellent recipe for a good investment. If you require a guaranteed rental income then the French Leaseback scheme can be a good option too.

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 properties are very easy to rent out (providing the location is suitable) as they are ready to move into 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 bonus is that the type of people wanting a holiday home on the coast which is rented out for much of the year will be similar to you. 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. Once built you can then view the property 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 can also include which management company they choose to maintain and run the residence.

(ArticlesBase SC #243082)

Nick Dowlatshahi - About the Author:
French Property expert Nick Dowlatshahi is the Managing Director of Leapfrog Properties who specialise in the sale of Property across France. http://www.leapfrog-properties.com

Source:  http://www.articlesbase.com/finance-articles/new-french-apartments-and-the-buying-process-243082.html