Investing in property in Mauritius can be an uphill battle. You are advised to choose carefully before purchasing property.
Choosing your house in Mauritius
What you should check:
- Old or new? The advantages and disadvantages.
- What is the size of the property compared to your family size?
- Comfort elements, such as: watchman, basement, parking, exposure, terrace, air-conditioning, etc.
- The eventual cost of any work that will need to be done.
- What are the nearby shops like? Schools? The distance of your property from bus stops (particularly important for your future employees, such as maid, gardener, etc).
- Planning your budget.
- What are the current prices?
If your property is located in a residential estate, ask for a copy of the Rules and Regulations Document and read it carefully as it will provide you with all of the regulations which apply specifically to the estate, as well as an indication of what your expenses will be.
If your property is located in a block of flats, find out about the maintenance costs, as well as the rules and regulations of the building.
Do some researches when registering, or in General’s Registrar office on these questions, otherwise ask the notary to do it.
The visit of the property
Go and visit the property several times and at different times of the day. This will give you a better idea of the prevailing winds and where the sun rises and sets, so as to know whether it will be hot or not.
Check all of the areas; check the state of all of the main installations, such as electricity, plumbing, heating, etc. Don’t forget to ask about any future projects in the area (building, industrial projects, etc.).
Do some researches when registering, or in General’s Registrar office on these questions, otherwise require from the notary that he made it. Verify especially the area of constraints, that is the rights that the other parts (nearby, ancient owners, public authorities cf. CEB, CWA, Government of Mauritius) own on the ground: rights of way, sight, non-constructability, limitation of heights, passage of electric cords, etc...
The purchase offer
During negotiations, in the majority of cases, the potential buyer makes a verbal offer to the owner, naming a price which is normally less than the asking price. Sometimes, it may also happen that this offer is formalised in writing in order to give the offer more weight. This is a proposal that is more binding than we think, because agreement of sale or purchase is worth sale or purchase, as the case may be.
The purchase offer expresses the intent of the potential buyer to purchase that property at the indicated price. It is, to a certain extent, a promise of sale, and can therefore, cause some problems if the sale does not go through.
Precautions to take
If it is essential to have a written purchase offer in order to avoid losing the property, it is advisable to indicate a short deadline (8-15 days) for the offer, as well as the conditions regarding the seller’s response and to indicate that the sale will be legally binding only upon signature of the pre-sale contract. It is also advisable to stipulate that the offer can be revoked by the buyer if the seller does not accept the offer within the deadline given.
The pre-sale contract, commonly known as the “bordereau” here, is not a mere formality. It defines the terms and conditions under which both parties will buy and sell the property. Legally speaking, the pre-sale contract entails serious obligations on both parties. The time frame between this pre-sale contract and the signature of the final contract enables both parties to proceed with the completion of a certain number of formalities, whilst waiting for the notarised contract.
If the seller is a private individual, he is not allowed to ask for any payment to be made before the end of the retraction limit.
The promise of sale
The promise of sale is a sort of pre-sale contract that binds both parties. The owner gives an option on the property to the buyer in accordance with the conditions laid out in the pre-sale contract. It goes without saying, that all promise of sale contracts have an expiry limit, within which the buyer makes a commitment to buy the good.
Down payment and deposit
A cash deposit is normally made when an agreement form is signed. We must make the distinction between down payment and a simple deposit. Whenever the sale is cancelled by the seller, the deposit is refundable to the buyer provided the latter agrees to cancel the sale against interests very often. On the other hand, if the buyer cancels the sale, the seller has the right to claim for the loss of earnings upon the forthcoming conclusion of the sale. However, if the deposit received with the pre-sale contract has been qualified as down payment, the penalty is automatic: if the sale is dishonoured by the buyer, the seller may confiscate the deposit; whenever the sale is dishonoured by the seller, twice the sum deposited must be refunded to the buyer. In all circumstances, any unsatisfied party can request the court to oblige the other party to conclude the sale together with all costs incurred and/or to claim damages.
The final contract
On the day of the signing of the final sale contract, the seller commits to hand over the keys, as well as all necessary documents (Title Deeds, certificates, etc.) to the buyer.
The buyer is, in turn, obliged to pay the price stipulated in the contract. Normally, the buyer does not have any Land Transfer Tax to pay; this is at the owner’s cost. However, this can depend on the individual contract.
This document must be drafted by a notary, generally the buyer’s. The seller may, however, also involve his own notary at no additional cost. The notary will confirm that both parties are in agreement with regards to their respective obligations and will read the contract of sale during the signing. Then, the original sale contract is kept with the notary and an authentic copy is given to the buyer. This is the title of ownership, which enables him to assert his rights as owner.