For Mohamed Lazrak, notary in Rabat and former secretary general of the National Council of the Order of Notaries of Morocco, the toughening of sanctions against developers concluding reservation contracts, provided for in the new text, remains insufficient. “With this new bill, we will move from monetary sanctions to criminal sanctions, including a prison sentence of one year to 5 years. However, developers proceed, as the subdivisions are completed, to the conclusion of reservation contracts for the benefit of future buyers. It is now, under the new bill, a criminal sanction,” he explains to Media24.
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According to him, the initiative is certainly good, “but it does not take into consideration the difficulty of financing housing developments. Bank loans only allow developers to cover 70% of their financing needs. Apart from personal funds, developers rely on advances of 10% to 15%, paid by future buyers, through subdivision reservation contracts. He will add: “We will remain in anarchy since even with the current law which provides for financial sanctions for this type of contract (fine of 100,000 DH to 1 million DH), the reservation of subdivision remains a common practice on the ground. 99% of developers engage in this practice.”
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If the new text will make it possible to punish those who reserve fictitious subdivisions, it should not however “be generalized to all operators”, indicates the notary, considering that “it would be wise to instead regulate the reservations of subdivisions in progress instead of banning them. For example, we can limit the amount of the advance, require a bank guarantee or grant mortgages for the benefit of future buyers of subdivisions. The amending law also provides for an increase from 3 to 5 years in the time limit for authorization to create a subdivision, with the possibility of suspension of the time limit in the event of unforeseen circumstances. The developer will also be obliged to provide a financial guarantee to cover the costs linked to possible repairs one year after provisional acceptance. This guarantee will be returned to it after final acceptance of the work.
Morocco
