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The Financial Guarantee of Completion is a special protection programme organised in favour of the purchaser in the future state of completion. The bankruptcy of certain real estate developers which were weakened by the economic and financial crisis, encouraged the consideration of the guarantees offered by the sale system in the future state of completion, and specifically the financial guarantee of completion – the most used in practice. This guarantee may take the form of an opening of credit or a guarantee agreement. It results from the intervention of a guarantor organisation – usually a bank – alongside the seller promoter. Guarantee: The client who plans to sell a building in order for it to be constructed or renovated is obliged to provide the purchasers with a Financial Guarantee of Completion (GFA). The financing of the Financial Guarantee is covered until the Declaration of Completion and Conformity of Works (DACT), because the risk of the client facing financial failure would then prevent him from continuing the construction work. It provides each of the purchasers of the program with the assurance that a third party guarantor will bring all the necessary funds to allow the completion of the building or houses if the proponent is no longer able to do so.
The beneficiaries of the GFA are:
- The buyers of the program who want to build.
- The seller of the land of trim of the operation if all or part of the payment of the price of the land is done by allocating lots (dation) in the program to be built. Thanks to the intervention of a guarantor, he will then renounce his privilege of seller.