Off-plan property purchases now account for a significant share of Morocco’s residential and commercial real estate transactions. For foreign buyers — whether individuals investing in a Casablanca apartment, a Marrakech riad development, or a company acquiring new-build commercial premises — the VEFA structure offers real advantages: below-market entry prices, modern finishes, and the ability to personalise a property before it is built.
Those advantages come with a specific legal framework that is worth understanding before signing anything. The rules are protective, but they only protect buyers who know what to look for.
The Legal Framework: Law 44-00 and Law 107-12
The VEFA — vente en l’état futur d’achèvement — is defined in Article 618-1 of Morocco’s Code des Obligations et Contrats (COC), as amended by Law 44-00. The mechanism is a progressive transfer of ownership: title passes to the buyer as construction advances, at each stage certified and documented by a licensed surveyor and the notary.
The preliminary VEFA contract — the instrument that creates the buyer’s rights before the final notarial deed — must include, under penalty of nullity:
- The full identity of both parties
- The reference of the title deed (titre foncier) for the land
- The building permit reference
- A precise technical description of the property, its surface area, and its location within the development
- The total price, its payment schedule, and the financing arrangements
- The planned delivery date
Any preliminary contract missing these elements can be challenged. Foreign buyers relying on informal or inadequately drafted documents have found themselves without recourse when developers defaulted.
The Guarantees Introduced by Law 107-12
Law 107-12, enacted in February 2016, substantially strengthened buyer protection. Three additions matter most for foreign investors.
First, the completion guarantee (garantie d’achèvement): the developer must now provide — before the first payment is received — either a bank guarantee from a Moroccan credit institution, or an irrevocable commitment from a licensed insurer, to cover the cost of completing the building if the developer fails to do so.
Second, the written preliminary contract is mandatory for all VEFA transactions. Oral agreements no longer create enforceable rights under this regime.
Third, notarial involvement is required from the preliminary stage for properties above a defined value threshold. The notary does not simply authenticate the final deed — they are present and responsible from the first contractual commitment.
The Reservation Contract: Your First Written Commitment
For developments being marketed before a full building permit has been obtained, developers sometimes use a contrat de réservation as a precursor to the formal preliminary VEFA contract. This reservation agreement specifies the property’s characteristics, the planned delivery date, and the amount of the deposit — typically around 5% of the purchase price.
The deposit is held in escrow. Once the building permit is obtained and the formal VEFA preliminary contract is ready, the parties move to the notarial stage. The reservation deposit is credited against the first instalment.
A reservation contract without a defined delivery date, or one that leaves the description of the property vague, offers limited protection. Review it carefully before paying any deposit.
Staged Payments and the Notary’s Role
Moroccan law requires that all payments under a VEFA contract transit through the notary’s client account (compte de dépôt) — not directly to the developer’s bank account. This structure is not optional; it is a legal protection mechanism.
The notary releases funds to the developer at each certified stage of construction, following confirmation from the project surveyor that the works have actually reached the relevant milestone. Typical stages are: foundations completed, structure at water-tight level, shell finished, and practical completion.
A developer who asks for direct payment to their company account, bypassing the notary, is not operating within the legal framework. Any foreign buyer who makes direct payments and encounters a developer default has significantly fewer remedies.
Considering a property purchase in Morocco? Lafrouji Avocats advises foreign buyers at every stage — from reviewing the preliminary contract to securing your currency repatriation rights.
Contact us: contact@lafroujiavocats.com — +212 (5) 22 47 55 29
Delivery Timelines and Penalty Clauses
Delivery timelines under Moroccan VEFA contracts typically range from 12 to 36 months after signing the preliminary deed, depending on the scale of the development. In practice, delays of 6 to 12 months beyond the contractual date are not unusual.
Law 107-12 allows the contract to include a clause pénale imposing daily or monthly penalties on the developer for late delivery. Without such a clause, the buyer’s remedy is limited to a claim for damages before the commercial courts — which requires demonstrating actual loss and initiating litigation.
Negotiating a well-drafted penalty clause at the preliminary contract stage is considerably more straightforward than pursuing a developer through the courts after the fact.
Selling Before Delivery: The Contract Assignment
If the market moves in your favour during the construction period, it is possible to sell a VEFA property before delivery through a contract assignment (cession de contrat). The incoming buyer takes over all the original buyer’s rights and obligations.
The assignment requires the developer’s consent — which cannot be unreasonably withheld but creates a process — and involves an administrative fee. The notary must authenticate the assignment deed. This mechanism is commonly used by investors seeking a short-term capital gain on a rising market without completing the purchase.
The Real Cost of a VEFA Acquisition
The headline purchase price is not the total cost. Foreign buyers should budget for:
- Notary fees: 1 to 1.5% of the purchase price
- Land registration fees (droits d’enregistrement): 4% for residential property
- Conservation foncière fees: approximately 1.5%
- VAT on notary fees and agency commission
- Agency commission if applicable: typically 2 to 2.5%
In aggregate, total acquisition costs typically add 6 to 8% to the purchase price. Budgeting on the basis of the headline price alone is a common and costly error.
Recourse if the Developer Defaults
The primary instrument of protection against developer default is the completion guarantee required under Law 107-12. If the developer becomes insolvent or abandons the project, the guarantor bank or insurer is obliged to finance the completion of the works or reimburse the buyers.
Where the guarantee mechanism fails or is disputed, the competent court is the tribunal de commerce. Moroccan commercial courts have jurisdiction over real estate disputes involving professionals, pursuant to the applicable royal decree. Foreign buyers with judgment debts against Moroccan entities may also rely on Morocco’s bilateral enforcement treaties where applicable.
Foreign Buyers: Currency and Repatriation
For a foreign buyer to recover their investment in foreign currency upon a future sale, the purchase must be financed through a properly documented currency transfer into Morocco.
The mechanism works as follows: funds are transferred from abroad to a compte en dirhams convertibles at a Moroccan bank. The bank issues an exchange certificate (bordereau de change) for each transfer. These documents are essential — they prove that the investment was made in foreign currency and entitle the investor to repatriate the sale proceeds in the same currency.
Under the IGOC 2026 framework, investment declarations for real property acquisitions above defined thresholds must be filed with the Moroccan exchange control authority (Office des Changes). Non-compliance does not void the transaction but creates obstacles at the repatriation stage that are difficult to resolve retrospectively.
The practical rule is simple: document every foreign currency payment from day one. Reconstruct this documentation after the fact is time-consuming, uncertain, and sometimes impossible.
Lafrouji Avocats and Foreign Property Buyers
Lafrouji Avocats advises foreign individuals and companies purchasing off-plan property in Morocco. Our work covers the review and negotiation of preliminary VEFA contracts, the verification of completion guarantees, the supervision of notarial proceedings, and the structuring of currency transfers to preserve future repatriation rights.
64 rue Taha Houssein, 20000 Casablanca
+212 (5) 22 47 55 29
contact@lafroujiavocats.com
