Investors from overseas have an opportunity to invest in developments still in the planning stage or in the pre-construction phase. Popularly known as preselling in other countries, this mode is called VEFA in Mauritius, which stands for Vente en l’Etat Futur d’Achevement or sale in future state of completion.
There are many real estate developments wherein VEFA has served as a window to buy a property in in Mauritius. One great example comes in the Manta Cove development of 2Futures, the leading luxury real estate developer in the country. This developer completed the beachfront Manta Cove in September 2019, thus affirming Mauritius as a winsome destination for foreign homebuyers keen on preselling properties.
Manta Cove by 2Futures: a successful VEFA delivery in Tamarin
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Advantages of a pre-construction purchase
VEFAs are typically offered in multi-unit real estate developments for condos or apartments. These projects have proliferated since Mauritius promoted foreign investments in the country’s real estate sector through the following schemes:
Foreign investors can enjoy several advantages once they buy through VEFA. Firstly, developers usually set prices at lower levels in pre-construction units than in ready-for-occupancy residences. Moreover, the buyers have the option to pay in instalments under terms set under the Mauritian Civil Code. Initial cash out can amount to 25 percent of the total purchase price.
The construction process is worry-free for a buyer under VEFA, as this is entirely the responsibility of the developer. It is possible for the buyers, however, to be involved in the interior design of the residential unit they are buying. This way, they can inject their personal tastes and preferences to the residence of their choice.
Completion guarantee
Several mechanisms in VEFA protect foreign homebuyers in case the developer fails to complete and deliver the residence. These include the guarantees set under the Mauritian Civil Code and the contractual agreement. Banks and Mauritian financial institutions also provide GFA or Garantie Financière d’Achèvement as a guarantee in the event of a developer’s failure to complete a project.
Essentially, the pre-construction choice of buyers is based just on the plans and marketing collaterals that a developer presents. The developer proposes to deliver to the buyer within a specified period a completed residence following the plans and descriptions presented.
Here are three key steps for a VEFA:
Signing of a contract for reservation and payment of security deposit
Notarising a deed of sale and instalment payment of the price
Receipt of the property and delivery of the residence
This three-step process indeed looks simple enough. It is critically important for a VEFA buyer though to avail of the expert services of a notary. Your rights as a buyer are guaranteed with a notary at your side. As important, you buy real estate in Mauritius on terms that satisfy all the parties concerned.
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