When buying off plan in Mauritius, the legal framework is governed by the Code Civil for VEFA (Vente en l’état future d’achèvement) where the Buyer is 100% protected against any potential default by the Promoter (Developer).

Understanding the VEFA

The below principles apply:

• The Property is sold based on the architect’s drawings as the construction is at its planning stage.
• he sale is carried out in 2 steps namely the reservation contract (Contract de Reservation Preliminaire) and the Deed of Sale, which is a contract signed before a Notary Public
• The deposit on the reservation contract is affected on the bank account of the Notary Public (ESCROW Account)
• The Buyer is, from the date of the deed, the owner of the property and of a share of the common areas depending on the progress of the works. He will become the owner of the works, as and when such works progress. He will have the right of possession and will be vested with it upon completion of the construction works provided he has fulfilled all his engagement relative to the payment of the property to the Promoter.
• Stage Progress payment will be required based on the work in progress as certified by the engineers and will be paid to Promoter.
• Institution of repute that it will step in to ensure delivery in case the promoter cannot respect his commitments.

Payments under the VEFA principle are set as follows:

• 10% deposit upon signature of the reservation contract
• 15% when appointment taken with notary public for signature of the Deed of Sale
• 10% on day of signing the purchase agreement
• 35% upon completion of the roofing
• 25% when building works are done
• 5% at hand-over of keys

Understanding the GFA

The GFA is a guarantee of due completion where a reputable financial institution is bind towards the Buyer, jointly and in solido with the Promoter, to pay all sums necessary to the completion of the unit purchased until such completion is established as stipulated in the Title Deed.

Flow chart to ownership:

VEFA is the Mauritian Government moderated process for the selling “off plan” units in a project, for an agreed price, with a determined programme for delivery and with scheduled payments as works progress.

The Buyer’s position is fully secured by the fact that the Promoter gives a bank guarantee to them ensuring the completion of the project, and in return, the Buyer provides a guarantee to the Promoter in respect to the complete payment of the purchase price.

The process occurs as follows:

1. Signature of the Preliminary Reservation Contract:10% deposit (within 10 days after signature)
2. When scheduling the appointment to sign the Sales Contract: payment of 15%
3. Signature of the Sales Contract: payment of 10%scheduling the appointment to sign the Sales Contract: payment of 15%
4. During the construction period, payment of 10% to 15% every 3 to 4 Months
5. On delivery: 5% payment

Step 1 - Signature of the Preliminary Reservation Agreement (CRP)

The General Principles:

• The Promoter serves the sale of a property on plan to a buyer at a fixed price with payment by the latter of a deposit in the Notary’s ESCROW Account
• The promoter proposes to develop a project subject to a number of undertakings (conditions precedent) being achieved by both the buyer and the Promoter. These will be stipulated in the Reservation Agreement signed by both parties (referred to as the CRP)

The Description of the Property:

• The prospective buyer is reserving a property that will exist in the future, and as a result, it is very important that as much details as possible concerning the property is identified, the law, therefore, imposes that for residential properties the CRP must contain clear indications as to
• The location of the property
• What the property consists of; number of rooms, total area, room areas etc
• The specifications; what type of material will be used for construction, fixtures and furnishings and what type of equipment will be provided
• Maximum duration of works

The Price:

• The Promoter and the prospective Buyer will contract on a fixed price at which property will be sold at completion.

The Guarantee Deposit:

• During the signature of the Reservation Agreement, the buyer will take a deposit amounting to 10% of the final agreed unit price of the property to confirm the reservation, payable in 2 parts. The first 5% within 10 days from the signature date of the CRP and the additional 5% at a later date which will be defined by the Promoter. This guarantee will only forfeit in the situation where the Promoter has fulfilled all his undertakings (conditions precedent) yet the Buyer renounces on the purchase.
• The Buyer has his guaranteed deposit protected against a default as the deposits are placed in an Escrow account in the name of the prospective Buyer under the control of a third party, a Notary, and remains there until signature of the authentic Deed of Sale
• After signature of the Deed of Sale, the Buyer, is then protected by a Certificate of Guaranteed Completion (referred to as GFA)
• If the sale does not occur due to a failure by either parties to achieve its conditions precedent, then the deposit will be fully refunded to the prospective Buyer if:
• The Promoter failed to complete the sale as per the agreed conditions
• If the final price exceeds the provisional price by more than 5% except through results of additional works requested by the buyer
• If common area essential equipment promised are not provided

Step 2 - Economic Development Board (EDB) Acquisition of Property Application:

Permission to acquire a property by the Economic Development Board (EDB) is an essential step in the process of acquiring and granting residence permits to foreign owners and the procedure is as follows:

• The Buyer submits the required documents:
• As an individual:
  Certified documents such as a copy of your passport, birth certificate, marriage certificate, proof of address and a bank reference (original document)
• As a business:
  Certified documents such as a copy of your passport, certification of incorporation, the BRN, a list of shareholders with certified copies of their passports, a proof of address and a bank reference (original document)
• Application submissions to the EDB per applicant and relevant cost payable
• The EDB examines the application, approves it and issues an Acquisition of Property license for each individual Buyer
• This procedure takes about 3 to 4 weeks

Step 3 - The Deed of Sale:

• The certified documents are sent (by mail) to the Notary so that he prepares a KYC (Know Your Client) and the Deed of Sale
• Once all the conditions precedent has been successfully completed (including authorisation to purchase from EDB for Purchaser), the Buyer will be invited to sign the Deed of Sale
• He will be notified one month before effective signature of the Deed of Sale by registered mail

Attached to this notification, will be:

• The final draft documents and attachments for signature
• The Buyer will have a maximum delay of one month for such review
• A Request to pay a further 15% deposit into the ESCROW account
• A detailed invoice of the fees and taxes to be paid on the date of signature of the Deed of Sale, as well as the references of the bank account on which these amounts must be submitted in order to be available no later than the date of signature of the Deed of Sale
• The Deed of Sale can be signed by the Buyer on the day selected or by proxy via a Power of Attorney. The Power of Attorney shall be drawn up in front of a Notary/Solicitor and legalised (apostilled) before being sent to Mauritius
• On the day selected for signature of the Deed of Sale:
• The Notary will read and explain the full content of the Deed of Sale to the Parties
• The Parties will sign the Deed of Sale
• Transfer of property between the parties will happen instantly
• The Buyer will be remitted a GFA (Garantie Financiere d’Achevement)
• The Buyer will pay the Notary the Registration Duty of 5% and the Notary Fees of up to 2% of the selling price
• Notary will request the bank to transfer the funds into the ESCROW Account to the Promoter’s account
• The Buyer will have to pay an additional of 10% upon signature of DOS

Registration and publication of title deed takes around two weeks. After the deed of sale signature, the residence permit application will be processed.

Step 4 - Residency permit application with EDB:

The application must be accompanied by the following documentation:

• Medical Certificate to the effect that the applicant is free from any contagious disease
• Original morality certificate
• Certified true copy of the birth certificate
• Certified true copy of the first 5 pages of the passport
• Marriage certificate
• 4 passport size photos
• Application form to enter Mauritius duly filled
• A scanned copy of the UID from (Unique Identifier) to be filled individually)

If the applicant is accompanied by dependents, the following additional documents are required:

• Certified true copy of the passport
• Certified true copy of the birth certificate
• Medical Certificate to the effect that the applicant is free from any contagious disease
• 4 passport size photos
• A scanned copy of the identity from (to be filled individually)

Step 5 - Construction and handover process:

• Once the Deed of Sale has been signed the Buyer proceeds with construction of the villa as per the VEFA system
• When the Promoter has satisfactorily completed the works the Buyer will be invited to a meeting
• In that meeting the Buyer can accept the handover with or without reserve:
• Without reserves, last 5% is paid and keys are remitted
• With reserves, same will apply; but in addition, the Promoter will commit to wave the reserves in a reasonable delay
• Although the buyer becomes the owner of the property as from signature the promoter remains Master of Works until delivery and is responsible for the insurance of the site until such date

NOTE:

If there are substantial defects money can be paid in the ESCROW account and keys only remitted once the issues are resolved Additional Issues to be considered by purchasers:

• Finance
• Estate and Trust planning
• Structure of the acquisition

The contents of these guidelines are intended to be an overview of the process and all parties should refer to their legal counsel in respect to satisfying themselves fully of the process involved.

Monthly Syndicate Levies:
The total levy will range from development to development per month for contribution.

The Co-ownership Syndicate Levy (payable by each owner on the share of the whole assigned to each owner) Per month for landscaping, road maintenance and maintenance of the common areas.

The Estate Levy
As being part of a development and sharing a certain number of areas, equipment and soft services in common, each bloc of owners does contribute to its fair share of the estate management cost. It include utilities consumption, beach and common gardens landscaping & maintenance, soft services as pest control, waste management and security, technical services such as sewerage treatment plant maintenance, storage and distribution of potable water, road and external lighting maintenance amongst others. The allocation of the cost to each stakeholder is deemed to be fair and allocation keys are discussed and agreed by all owners representatives.

All Prices are subject to change.