Building permit
An administrative authorisation issued by the local authority, required for any new construction or works modifying a building's external appearance or floor area beyond certain thresholds. In construction financing, the bank requires a building permit cleared of any legal challenge before disbursing funds. Obtaining it can take several months and conditions the start of construction.
Key points
- It conditions fund disbursement by the bank in construction or CCMI financing.
- The review period is typically two to three months for an individual house.
- Third parties have a two-month challenge period after posting to contest the permit.
- A permit cleared of all challenges is the prerequisite before any financed construction begins.
Frequently asked questions
Why does the bank wait for the permit to be cleared before disbursing funds?
A challenge to the permit can result in its annulment, which would halt construction and jeopardise the value of the mortgage security. The bank thus protects its mortgage or surety by ensuring the construction has a solid legal basis before committing its funds.
What happens if the building permit is refused after the preliminary sale agreement is signed?
If the preliminary sale agreement included a suspensive condition on obtaining the building permit, the buyer can withdraw without penalty and recover their deposit. This condition is virtually standard in VEFA or CCMI pre-contracts and must be carefully drafted with the notary.
Can work begin before the permit is cleared of challenges?
Technically, works can start from the moment the permit is posted on site, but starting before the challenge period expires is strongly discouraged. A successful challenge can require demolition of completed works. The bank will not commit funds regardless until the permit is cleared.
In practice
A borrower signs their CCMI contract in January. The permit is filed in February and obtained in May. After posting and expiry of the two-month challenge period in July, the bank releases the first funds and construction begins.
Official sources
- Building permit (PC) · Service-Public.gouv.fr
- Sale agreement and loan condition precedent · Service-Public.gouv.fr
- Housing and financing information · ANIL