3. VEFA Contract for 'Off Plan' French Property

1. Contract Documentation
2. Price
3. Delivery Date
4. Fees
5. Grounds for Withdrawal
6. Insurance

3.3. Delivery Date

The contract is unlikely to state a precise date for delivery of the property.

The best you are going to get is a period, something along the lines of 'scheduled for last quarter 2019', or similar.

Clearly, you need to go for a precise a date as possible, so you can be clear from what date any penalties will apply for late delivery. Try and insist on a final end date, e.g. 31 Dec 19.

Even if you are able to do so, the developer will wish to include grounds on which the delivery date may be exceeded without penalty, e.g. strike action, exceptional weather conditions.

The law prescribes no specific penalities for a developer who does not deliver a property by the due date. If you wish to impose penalties for late delivery you will need to negotiate them into the contract documentation.

You need to ask about the issue of penalties on late delivery before you sign the preliminary contract, as you will have greater leverage at this time.

The issue of penalties is one area of VEFA contracts where the law is silent and which, not surprisingly, developers resist being included in the contract! Unfortunately, delays in the completion of new off-plan developments is not uncommon, in most cases no more than a few months at the most, but in some cases running into a year or more.

In theory, you are entitled to withdraw from the contract and receive full reimbursement, if there is an unreasonable and substantial delay.

Only a court of law could determine what might reasonable in the circumstances, but the general principle the courts operate is that delay is not generally a sufficient reason to withdraw from the contract. You may well be awarded 'damages' if you suffered injury as a result of the delay, but you would not be awarded 'penalties', unless you had a suitable clause in the contract.

You may wish to argue with the developer that, as penalties will be contained in the VEFA contract against the client for late payment, then there ought to be a reciprocal obligation on the developer for delay, as recent legal decisions in the courts seem to imply!

Next: Fees

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