Real estate: station with the trap of intermediate interests

In case of delay of delivery of his housing, the purchaser can quickly be asphyxiated by the expenses related to the credit.

Des logements en construction, à Montreuil (93), en juillet 2014.

By buying a three-room apartment in Ivry-sur-Seine (Val-de-Marne) from the developer Brémond in a group called “The Quai aux grains” for just under 200 000 euros, Sophie F. thought to have done a good deal. But significant delays in the delivery of housing have made him disillusioned.

“The apartment, which was originally scheduled to be delivered in June 2014, will not be finished until February, ” she said. To justify this delay, the developer invokes bad weather conditions, but I think he did not mobilize the necessary means to complete the work in time. “


What would have been a simple mishap for an investor has taken on serious proportions for Sophie, because she has to simultaneously pay the rent of her former home, which she continues to occupy, and the interim interest of the mortgage credit subscribed from The Postal Bank.

“Sale on plan”

When buying in the old, the mortgage is usually released at once at the time of signing the deed of sale at the notary, and amortization of the loan can begin the following month. But the situation is different when, like Sophie, the borrower acquires a property for sale in the future state of completion (VEFA).

Also known as “off-plan sales”, the VEFA is a contract that allows buying a new home before its construction. “In this case, the installments are staggered and the loan subscribed is released according to a very precise schedule: 5% at the reservation, 30% of the price when the foundations are completed, 35% at the laying of the roof and at the realization of the waterproofing of the terraces (theout of waterin the real estate jargon), 25% when the work is completed and finally 5% on delivery, “ says Benjamin Nicaise, president of the real estate investment company Cerenicimo.

This credit splitting has a cost for the bank which passes it on to the borrower by making him pay so-called interim interest. These apply to the number of funds remaining to be paid by the bank until the full release of the loan. Inevitably, their costs increase when delivery is delayed.

Conciliating banks

“At the first call of funds, I had to pay the bank 300 euros per month for the only intermediate interest. Now, I pay 700 euros each month, which is half of the monthly payment. And this money is definitely lost because it is not used to repay capital, Sophie exasperated.

“To avoid this trap, we must monitor the progress of the site and try to anticipate delays, advises Marc Gédoux, president of Pierre Etoile. Most banks are conciliatory, but they must be alerted early enough. “

As it is forbidden to visit a construction site for safety reasons, it is not easy to follow the progress of the work. “But if the roof is not laid when the call for funds at the stadiumout of wateris supposed to approach, you can be sure that the yard will be late! “ Says Philippe Dupont, commercial director of Réalités.

Late penalties

In the event of a significant delay, to avoid being asphyxiated, it is sometimes possible to obtain a total deferral (interest + amortization of capital). In this case, the buyer has nothing to pay until the final implementation of the loan. But the total cost of the loan is increased because the interim interest is added to the loan amount for the calculation of future monthly payments.

When construction times are not respected, unless it is due to bad weather or the failure of a business, the developer must pay late penalties to the buyer. “The details and the conditions of these penalties are mentioned very precisely in the contract of VEFA. For example, the number of days of rain selected is calculated based on the information provided by Météo France, “ explains Pierre Ménanteau, notary in Nantes.

When their liability is incurred, the promoters are generally conciliatory and agree to cover the interim interest. However, when the damage suffered does not exceed a few hundred euros, the promoter refuses any compensation because he thinks that the buyer will not start an expensive legal battle for such a small amount.