Sale of real-estate renovation (VIR)
The seller of real estate for residential and/or professional use, who undertakes to carry out work within a specified period and receives sums from the purchaser before the completion.
How to draft the Sale of real-estate renovation contract?
The seller must round off the "sale of real-estate renovation contract" through a notarial act which allows better protection for the purchaser. Due to this act, the seller immediately transfers the ownership of the land to the purchaser but also of the constructions, when the latter is completed.
Sale of real-estate renovation contract and the related works
They are necessarily related to an existing built building. Their nature is specified negatively by the application decree dated 16 December 2008. These works are those that do not correspond to expansion or complete restructuring of the building, comparable to reconstruction, for which only the sale system of buildings to be constructed is open.
Is it possible to sign a preliminary contract during sale of real-estate renovation?
A preliminary sales contract can be rounded off and must include, under penalty of nullity , the key information relating to the description and the time of completion of the work, its price, but also the seller's commitment to produce, while signing the authentic act of sale, proof of the completion guarantee , not to mention the compulsory insurance. This preliminary contract can be rounded off, under a suspensive condition . In which case, the law provides that no payment can be carried out before the condition has been fulfilled. There is a principle which is specific to the sale in the future state of completion.
What are the payment methods for sale of real-estate renovation?
The law organizes an instalment payment scheme for the sale price: the price of the existing one is to be paid while signing the authentic act of sale. The payment of the price of the works must, for its part, be carried out as follows:
- 50% upon completion of the work representing half of the work’s total price.
- 95% upon completion of all work, the balance upon delivery.
It should be noted that since the decree dated 27 September 2010, it is possible to provide interim payments as long as the above limits are respected.
Sale of real-estate renovation and completion guarantee
The law requires the seller to provide a completion guarantee carried out through a joint guarantee, given by a credit institution or through an insurance company approved for this purpose. This warranty is exclusive of any other form of guarantee.
The guarantee ends with the acknowledgment of completion resulting from the declaration certified, by a skilled person appointed through the agreement between the parties. A work acceptance record is then signed between the seller and the buyer
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