Performance Bond
Among the insurances dedicated to real estate professionals, the completion guarantee is an essential insurance contract. Mandatory, it protects the interests of your buyer clients who are certain to receive the completed project. Developers, builders, developers, rely on a recognized guarantor like Roederer to comply with your legal obligations with peace of mind.
Performance Bond (property developer's performance bond)
The Performance Bond is an independent guarantee that ensures the completion of the housing building programme. It must be taken out by the contracting authority on behalf of the purchasing clients. From a legal point of view, "completion" is understood to mean the finalization of the structure and installations that are essential for the use of the building. In practice, completion is decided once the Handover Report is signed and the declaration of completion of work (DAACT) has been notified.
In the case of the Performance Bond, a financial institution (bank, insurance company, surety company) undertakes to take over the cost of the work to complete the property project in the event of the developer's financial failure. It is therefore a major insurance product in the construction of new properties that aims not only to reassure – but above all to protect – future buyers.
Performance Bond: a legal obligation
As a property developer, taking out a Performance Bond is a legal requirement. According to Article L261-1 of the French Building and Housing Code, you must provide your buyers with a Performance Bond before the notary to finalize the property transaction.
In the context of an off-plan property sale, this guarantee must be taken out before the deeds of sale are signed with a notary. At this time, the notary checks the other insurance policies necessary for the proper execution of the work: Structural Damage insurance, Building All-Risk insurance, Civil Liability For the Contracting Authority, Builder-Developer insurance.
For the construction of non-housing properties (shopping centres, industrial buildings, offices, nursing homes, tourist residences, etc.), it is not compulsory to provide evidence of this insurance. However, it is highly recommended, as the purchaser or lessor may require a performance bond.
Performance Bond: Roederer support
Our construction and real estate department has a team of experts to support you. We intervene in all aspects that allow you to be in compliance with the legislation.