The reservation agreement: a preliminary agreement to a sale of a prospective building
In Luxembourg, the sale of a building which has not yet been built is governed by specific mandatory legislation (see Art. 1601-1 to Art. 1601-14 of the Civil Code), which ensures the protection of the buyer against risks related to the execution of the works. This legislation permits the parties to conclude a preliminary agreement, called a ‘reservation agreement’, to the final deed of sale. As the reservation agreement has practical relevance in securing the deed of sale, it could be useful to have one.
However, you should not underestimate its importance and keep in mind that a reservation agreement has to be carefully drafted, as several rules must be followed in order to give full effect to such an agreement and prevent it from being invalid. Below you will also find guidelines on the reservation agreement.
A sale of a building which has not yet been built is a sale in which the seller commits himself to build or complete or to subcontract the construction of the building or its completion or part of it within a set time frame…
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