Castle Asia Share Discussion Threads

[maxk] 02/11/2003 10:40

Bit short of time at the mo glen, will have a good look later.

[glennborthwick] 02/11/2003 09:40

my first effort comments please

[glennborthwick] 01/11/2003 09:45

just playing around with the basic html service offered by aol

[glennborthwick] 01/11/2003 09:12

I've just registered www.frenchbuy2let.com.
I have a vision of two websites, one a portal for all leaseback sites and opportunities. The other for traditional buy2lets. Better start learning how to build a website ;)

[glennborthwick] 31/10/2003 20:16

pound really motoring in my favour at moment

price 1.464

15 grand to be paid in March , I'd budgeted at 1.40 so 1.47 will be 5% or £750 cheaper for me.

I think with the UK about to raise rates we could see 1.50 by xmas so I'll let it ride at the moment rather than forward contract.

[glennborthwick] 30/10/2003 21:41

Buying property that is to be constructed (Part 1)

Many more of those interested in purchasing French real estate property are considering buying property that is to be constructed. There are many such developments now coming onto the market in France and buying a villa or apartment off the plans is becoming popular.

The purchase of such properties raises distinct legal issues and this issue of the week will look at the basic legal framework for the purchase of a property off the plans. The second part of this issue of the week will look at the financial aspects of such a purchase, including an analysis of tax saving schemes commonly referred to as 'leasebacks'.

How is the purchase structured?

The normal structure for such a purchase is what is known as a 'vente en état futur d'achèvement', of which the acronym commonly used is 'VEFA'. This means that the property will be sold prior to the construction being completed. With a VEFA, a preliminary contract is signed which is very different from the type of contract used with a re-sale property. Effectively, the purchaser reserves a particular property and the developer agrees to sell the property to him or her at the agreed price and with the agreed specifications if the development goes ahead. The developer must formally offer the sale to the purchaser within a time period specified in the contract.

The preliminary reservation contract should specify, amongst other things:

- the approximate habitable surface area of the property;

- the number of principal rooms;

- where the property reserved is situated in the development;

- the quality of the construction;

- time limits for completion of the purchase and the construction.

The purchaser becomes the owner of the property before the actual construction is completed by signing the deed of completion. In the deed, the developer undertakes to complete the construction within a given time frame.

Once the developer is in a position to formalise the sale to the purchaser (i.e. planning permission has been obtained, the purchaser is protected in the event that the project cannot be completed, the commercial viability of the development has been ascertained), the draft deed of completion will be notified to the purchaser. The purchaser must then sign the deed one month after this notification and could forfeit the deposit if he or she does not do so.

Is a deposit payable and if so what is the amount?

A deposit of up to 5% of the purchase price is payable at the time of signing the reservation contract. Should the signature of the deed of completion be envisaged in more than one year from the time of the reservation contract, the deposit cannot exceed 2%. If completion of the purchase is not scheduled to occur until more than two years after the signing of the preliminary contract, no deposit is payable.

How is the price paid?

The price is paid in accordance with a schedule of payments. Once the next stage in the construction of the property has been reached (foundations, roof e.t.c.) then an additional percentage is payable. The balance of the remaining 5% is only due upon delivery of the completed property to the purchaser. The schedule of payments is defined by the law. If a purchaser is seeking to obtain a mortgage then it must be ensured that the preliminary contract includes a condition that the mortgage is granted as the law does not protect the purchaser to the same extent as with the purchase of re-sale property.

How is the purchaser protected against the developer's insolvency and thus inability to complete the project?

In most cases (save where it is literally guaranteed that the development will be finished), the developer is required to provide one of two types of warranty to the purchaser, bonded by a bank or other such financial institution. This ensures that the purchaser is refunded if the development cannot be completed or the completion is finished regardless of the developer's insolvency.

What warranties exist in relation to the property itself?

There are several different types of warranty in relation to newly constructed property to protect the purchaser against apparent and hidden defects, problems with phonic insulation e.t.c. These are subject to varying rules and time limits for claims. There must be in place insurance covering overall liability for damage caused by the building works for ten years post completion of the construction. In addition, each contractor that works on the property must be covered by professional indemnity insurance covering a ten year period from completion of the works.

Part 2 – Financial aspects and taxation issues - will be published next week

02/06/2003 - Issue of the week

BACK TO NEWS

[maxk] 29/10/2003 23:08

Talk about pump! You are going to get your balls blown off glen.

[glennborthwick] 29/10/2003 22:25

hers the company who are leasing the properties off me - Odalys a massive french company.

[glennborthwick] 29/10/2003 16:27

Id do say 30% because I think we could see 1.47-1.50 by xmas. Europe wants the euro lower and rates in UK look set to rise IMO

[alphorn] 29/10/2003 15:31

Yes, I shall do a forward contract this week for my French purchase.

[glennborthwick] 29/10/2003 15:02

Currency moving nicely in my favour. I'd budgeted at 1.40 and can now get 1.45 so on my 34k euro deposit/costs needed when the build is finished is nearly 4% cheaper or about £800 pound.

[glennborthwick] 29/10/2003 13:43

a website has been developed by the well respected voila france outlet

[glennborthwick] 27/10/2003 19:56

and ive just registered www.frenchleasebacks.com

not sure what i will do with it - never even built a website before

[glennborthwick] 27/10/2003 19:08

My list of leaseback websites; (in constuction)

[glennborthwick] 20/10/2003 21:00

great site losta and part of the 4less group who I deal with for foreign currency

[lostafortune] 20/10/2003 20:29

Glenn, try www.freedom4sale.com

[ladron] 20/10/2003 20:27

I would strongly recommend a look at Turkey for a holiday home investment. We bought a 3 large three bed flat with large lounge/diner 3 double bedrooms toilet and bathroom and a large balcony with a magnificent harbour / sea / mountain views in Fethiye ( opposite Rhodes on the Turkish Lycian coast for £45k last year - latest price is around £60k+ . We also still have a duplex in Javea , Costa Blanca and the prices there have become ridiculous - plus they are building like there is no tomorrow ! A similar flat to our Turkish flat in Spain would be would be £150k min. There is a growing building programme and the market , I believe is set to expand and become more expensive .Climate is very similar to Spain and the locals are very friendly and prices are very cheap if you avoid the tourist areas.Fethiye is at the southern tip of the Fethiye Gulf which boasts some of the most beautifull sailing waters anywhere in the world......Ladron

[glennborthwick] 20/10/2003 20:08

I've been told Tenerife has superb rental yields due to all year round trade.

Anyone got experience of there?

[lostafortune] 20/10/2003 17:41

Glenn, tried that site for plan de la tour, but couldn't find it. Can you bring up the page, then paste the exact link here. Thanks in advance, Steve.

[maxk] 20/10/2003 10:43

Andy,

Yep, the costa del plenty is bonkers too. However, there may be problems, the german market is dead, and they account for over 50% of the foreign owned props down there. The estate reptiles wont tell you that either.