Buying an off-plan property in France offers the opportunity to secure a brand-new home in a desirable location, often at a competitive price.

However, as the property does not yet exist at the point of purchase, buyers benefit from specific legal protections designed to ensure their investment is secure.

Simon Attey from Alpine 3V, a French notaire and English solicitor, explained all the ways your money is protected in one of our recent webinars.

From reservation to completion

The off-plan buying process begins with the reservation contract, a legally binding agreement between the developer and the purchaser. This contract grants the buyer an option to purchase, provided that certain conditions are met.

“There need to be assurances that the building will be constructed and that it will be built solidly,” says Attey. “That process starts with signing a reservation contract, which is an option to purchase given by the developer, subject to conditions being fulfilled.”

For developers, these conditions include securing ownership of the land, obtaining planning permission that is beyond challenge, and obtaining a Garantie Financière d’Achèvement (GFA), a financial guarantee ensuring the completion of the building works. Banks or other financial institutions provide this guarantee, standing behind the developer to protect buyers should any issues arise.

What you pay and when

Buyers must provide an initial deposit upon signing the reservation contract. “It is generally 5%, but it can be lower if the project is at an earlier stage,” explains Attey. This deposit is held in escrow and remains protected if the developer fails to meet the agreed conditions.

Once the final off-plan purchase agreement is signed, payments are made in instalments based on construction milestones. “If it’s just a hole in the ground, only a fraction of the purchase price – between 25 and 35% – will be due, depending on whether the foundations are complete. Further payments are made as construction progresses.”

A GFA keeps your money safe if a development fails

Developer obligations and the all-important GFA certificate

A key protection for buyers is the requirement for developers to secure a GFA certificate before proceeding with the main stages of construction.

This backing assures that a bank will pay reimburse purchasers if the development project collapses, but a developer can only gain a GFA once it has secured enough reservation contracts. “There’s no hard and fast rule,” Attey explains. “Generally, it’s around 50% of the units in the development, but this can vary depending on the bank providing the guarantee.”

Importantly, buyers are not expected to make further payments before the developer obtains the GFA. “That 5% deposit is held in escrow and returned if the GFA isn’t obtained within the timeframe set in the reservation contract,” Attey confirms. “The only payment made before the GFA is the initial deposit. The next payment is due only when all guarantees, including the GFA certificate, are in place and the final purchase agreement is signed.”

This means that if the project falls through before the developer acquires a GFA, then your 5% deposit is safe and returned to you. And if it fails afterwards, then the bank that provided the GFA will reimburse you.

What you pay and how much is determined by the project’s timeline

Understanding the timeline

Unlike purchasing an existing property, where the timeline from exchange to completion is relatively short, buying off-plan means waiting for the development to be completed.

“For a cash purchaser [buying a finished property], completion can take a couple of months,” Attey says. “For buyers using a mortgage, it’s often closer to three months. But for off-plan purchases, it could be a year or more, depending on the stage of development.”

While that is a long time to wait, there is a further security in place if a project starts to take too long. “In a reservation contract, there will always be a deadline for signing the final purchase agreement,” Attey says. “If a buyer has paid a 5% deposit, the agreement must be signed within a year. If the deposit is only 2%, the timeline extends to two years. If the developer cannot commit to this timeframe, they cannot request a deposit at all.”

If the developer has not put in place the required protections, including the GFA, within the agreed period, buyers have the right to withdraw. “If it’s coming up to the end of the year and the developer hasn’t fulfilled all necessary conditions, the purchaser can walk away and recover their deposit.”

You can invest in a French off-plan development, confident your money is protected

Off-plan purchases in France come with extensive legal protections designed to safeguard buyers from financial risk. From the requirement of a GFA certificate to strict payment schedules and withdrawal rights, these regulations ensure that purchasers can invest with confidence.

However, buyers should carefully review reservation contracts, understand their rights, and seek expert advice before committing to an off-plan property purchase.

For those considering an off-plan investment in the French Alps or elsewhere, professional guidance from a notaire or solicitor experienced in cross-border transactions can be invaluable in navigating the process smoothly.

For an excellent example of what off-plan properties can offer, take a look at the Fleur des Alpes development in Méribel.