Advantages and drawbacks of an off-plan purchase in Mauritius
Advantages
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Buying off-plan enables payment to be spread out over the course of the construction.
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You can personalise your acquisition.
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The notary fees are relatively low and you will benefit from a reduction of 2 years Land Tax.
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No upkeep is required as the property is new.
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The developer who sold you the property will ensure that the work is well implemented. On the day the keys are handed over to you,you can insist on the repair of all of the faults you find, as well as over the course of the following months.
Drawbacks
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You can only personalise the original plan to a certain extent.
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You will have to wait for at least 2 years before being able to move in, without taking into account any extension to building works.
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The site is not necessarily amongst the most advantageous ones.
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The quality of the property will only be evident after construction is over.Disappointments are frequent and even though you can always find a sollution – improvement may take a long time, and thus, be costly.
Contract characteristics
Reservation contract
Purchasing new property always takes place in 2 steps. For a start, you will be required by the developer to sign a ‘’preliminary reservation agreement’’ .
Do not be misled by the use of the word “reservation”. By signing this type of agreement, you are not agreeing to reserve the property - you are agreeing to purchase it and will be legally bound to proceed once it is signed. This document must be established in writing and include some mandatory information.
1. The handing over date.
2. The selling price and revision terms, should be the case arise.
3. The date for the completion of constructions.
4. A detailed description of the property :
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Living space in square metres.
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Number of main and adjoining rooms (garage, basement, etc.).
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The quality of the construction (used materials, supplied appurtenances)
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Location in the estate or building.
5. Date for signing the agreement.
6. The selling price, VAT included, and the terms of the various mortgages the vendor has committed to obtain for you.
Once the preliminary agreement is signed, you will pay 2 to 5 % deposit of the estimated selling price in order to reserve the premises. This security deposit, which does not bear interest is deposited in a special account, generally opened by a notary.
You have 7 days to rescind the contract for purchase, as from the day you receive the preliminary contract.
The final Sale Contract
This final contract constitutes the title deed. It specifies the entitlements and obligations of the vendor until the works are completed. The vendor will send you the project a month before the final signature, which will enable you to check if the project conforms to the original commitment or not.
This contract generally comprises more detail than the reservation agreement .
1. Accurate and detailed description of the premises and its precise location in the building or on the estate as a whole (complying with the reservation contract).
2. A copy of the co-ownership regulations.
3. The handing over date.
4. Sum of the penalty the vendor will have to pay in case of late delivery.This is generally 0.1% of the total sale price per day of delay.
5. The price and terms of payment.
6. Completion or refund guarantee.
7. Specifications.
If the Final Sale Contract differs from the Reservation Contract, you can abandon the sale and the security deposit will be reimbursed to you within 3 months.
The Final Sale Contract f must imperatively be signed before a notary, who certifies that the clauses of the contract conform to what has been agreed.
Schedule of Payment of an off-plan purchase in Mauritius
The bill of sale has to specify the final selling price and the installment payment terms. You will, infact, be required to pay for the property in installments as work proceeds.
In line with the provisions of article 1601-30 of the Civil Code, the price of a property sold “en état futur d’achèvement” is to be paid in stages, which are as follows:
• Upon the signing of the purchase agreement: 25%
• Upon completion of the foundations: 10%
• Upon completion of the roofing: 35%
• Upon completion of the building works: 25%
• On the date the keys to the property are handed over: 5%
