Note

Buying through a housing cooperative in Spain

§ 1How a cooperative differs

In a developer sale, a company builds and sells. In a housing cooperative, a group of future owners organise the building for themselves, usually with professional managers. You become a member, you contribute money as the project advances and you receive a home at the end. The members share the decisions and, to a degree, the risk.

§ 2The attraction

The attraction is cost and control. There is no developer margin to pay, and members can influence the design and the choice of materials. For a group of friends or colleagues who want to live in the same place, it can fit well. Some foreign buyers meet cooperatives in newly planned areas, where the cooperative buys land and builds in phases.

§ 3The risks to weigh

The risks are those of off plan, plus some of its own. Your contributions are exposed until the building is complete. Costs can rise if the project is delayed. The quality of the management decides much, and a poorly run cooperative can stall. Leaving early can be expensive. These are reasons to read the statutes and the budget as carefully as you would a developer's contract.

§ 4What to check

The registrars advise checking, before paying any deposit, the registration of the promoter, ownership of the land and the building licence. In a cooperative, apply the same checks to the cooperative and to the land it holds. Ask for the latest accounts, the budget and the schedule, the statutes, the minutes of recent meetings and the manager's record. Ask whether the advance-payment guarantee applies to your contributions, and who holds the money.

§ 5Paying and leaving

Notaries prefer payment by bank transfer to a named account, so pay only into the cooperative's account as set in the documents and keep the proof. Before you join, ask what happens if you want to leave, if you cannot pay or if you die: how much is returned, when and who replaces you. These exit terms are the part of the deal most often overlooked.

§ 6Related reading

To compare the developer route, read new-build purchases and off-plan purchases, which cover payment before completion.

The protections are explained in off-plan bank guarantees and the ten-year structural insurance.

If the project fails, the risk of a developer failing describes the problems, and snagging a new build covers the inspection at the end.

For the alternative with no construction risk, see resale purchases, and for the full comparison, new homes against resale homes.

§ 7A question to settle first

Do you want the process of building, or only the home? Members of a cooperative take part in decisions, attend meetings and share problems, and some enjoy that while others find it a burden. If you only want a home at the end, a developer's sale with proper guarantees may suit you better. If you want to be part of a group, a cooperative can be rewarding, provided you read its rules first.

Legal note. How the process works in general. It is not legal advice, and it never replaces an independent Spanish lawyer acting for you.