Since RTL Infos' investigative series on the sales in future state of completion (VEFA) sector was published, a steady stream of affected homebuyers have come forward. For some, the ordeal began more than seven years ago; for others, it has only just started. Yet the true scale of the problem remains unknown: how many households are affected, how many legal cases are ongoing, and what sums are involved?
The government cannot answer these questions. When pressed for figures, it admitted it cannot estimate how many buyers have been hit by bankruptcies or construction halts in the VEFA sector. According to the Ministry of Justice, no central authority collects or manages such data.
Information on work stoppages and bankruptcies comes from several sources, including buyers, guarantors and court-appointed administrators, but there is no single repository. The government says it is following the situation closely and recognises the difficulties facing affected households.
Although the government acknowledges the hardship, it has not committed to any financial compensation. In its response to RTL's questions, it mentioned no dedicated fund or allocated financial support for those affected.
Instead, it points to existing options for free legal assistance, such as legal aid, which is available to households that meet certain criteria. It remains unclear, however, whether people who bought property in recent years would qualify.
Authorities also recommend that buyers seek mediation with the developer. Many buyers say this is often ineffective: the lack of response from developers, even through legal channels, is precisely the problem many households are already facing.
The government has acknowledged shortcomings in the current legislation and buyer protection mechanisms, particularly the legal guarantee of project completion. The Ministry of Justice says "concrete reform proposals are being developed".
Officials describe work on reforming the VEFA framework as "at a very advanced stage" but have given no timeline for when changes might be enacted. Consultations took place throughout 2025, involving representatives of several ministries and the Directorate for Consumer Protection.
According to the ministry, the working group has analysed various proposals, identified reform paths and begun drafting legislative and regulatory measures. Progress, it says, is slower than expected because of the subject's technical complexity.
Our colleagues at RTL Infos also raised concerns about the judicial reorganisation status introduced by the Law of 7 August 2023 on business preservation, questioning its timing: the law was enacted during an acute crisis in Luxembourg's property market.
The government defended its approach, saying the law is part of a broader effort to implement European Directive (EU) 2019/1023 on preventive restructuring. The reform, it notes, was years in the making at both national and European level, and aims to help viable companies restructure before bankruptcy becomes unavoidable.
On judicial reorganisation specifically, the government stated that the measure is not meant to exempt companies from their obligations indefinitely. Instead, it gives businesses a limited period, under court oversight, to implement a recovery plan.
However, as the case of Alejandro shows, companies can request successive extensions of this status without involving creditors or buyers. Alejandro’s lawyer argues this makes the law easy to circumvent. The government remains firm in its position.
If the reorganisation fails, creditors, including homebuyers, regain their rights and may start or resume legal proceedings. The government argues that VEFA buyers are no worse off than if the developer had entered bankruptcy proceedings immediately.
That is cold comfort for buyers who may face at least twelve months of additional waiting while continuing to pay mortgages, rent and legal fees. RTL has asked the government for further clarification and is awaiting a response.
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