VEFA: the practical limits of the legislation on completion guarantees – Article written by Vanessa Lomoro, Counsel and Avocat à la Cour at DSM Avocats à la Cour

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Friday 09 June 2023

After more than 45 years, it has now become necessary to update the Civil Code and the Grand Ducal Regulation of 24 February 1977 implementing Article 1601-5 of the Civil Code in order to guarantee optimum protection for purchasers of a property being sold in a future state of completion.

Few changes are necessary; we propose :

✅ Requiring purchasers to be better informed of both their rights and their obligations before the deed of sale is signed.

✅ Impose strict compliance with ART 1601-9 of the Civil Code :

➕ ensuring that the seller can only invoice purchasers after the state of progress has been validated by a member of the OAI – Ordre des Architectes et des Ingénieurs-Conseils or another approved professional.

➕ ensuring that the land’s share of the total VEFA sale price cannot exceed 10%, unless the seller can justify a higher cost price or completion value.

✅ Ensure that the specifications are as detailed as possible, avoiding vague wording.

EuroCaution can propose immediate solutions to its clients, such as including the eventual reimbursement of the Land in the completion guarantees.

Read the entire article by Vanessa Lomoro, Counsel and Avocat à la Cour at DSM Avocats à la Cour.