Note
Developer risks when buying new in Spain
Quick answer
The main risks are delay, change and insolvency. Reduce them before you pay: check the developer, the land and the licence, get the advance-payment guarantee in writing and have a lawyer read the contract. The longer the gap between payment and handover, the more these checks matter.
Applies toBuyers paying a developer before or at completion, especially off plan. Buyers of finished resale homes face different risks.
On this page: 7 sections
§ 1What can go wrong
Most developer problems fall into three groups. The first is delay: the building is finished later than promised. The second is change: the specification or the design differs from what you were shown. The third is failure: the developer cannot finish, or becomes insolvent. All three are more serious the earlier you pay, which is why the checks come before the deposit.
§ 2Check the developer first
The registrars advise checking, before paying any deposit, the developer's registration, its ownership of the land and the building licence. Those three documents show whether the company exists, whether it owns what it is selling and whether it has permission to build. A developer that cannot produce them has given you the most useful information you will get.
Look at past projects as well. Visit completed buildings, speak to owners and see how defects were handled. A record of finished projects is better evidence than a promise.
§ 3Insist on the guarantee
The building law requires advance payments to be secured by a guarantee and held in a separate account, and the ten-year structural guarantee applies to housing. Ask for both documents in writing, with the insurer, the bank and the account details. Notaries prefer payment by bank transfer, so pay only into the account named in the contract and keep the proof.
§ 4Read the contract for delay and exit
A contract that sets a completion date but no remedy for delay protects the developer. Ask your lawyer to look for the right to cancel and be refunded after a stated delay, the effect of changes to the specification and the process for resolving disputes. These clauses decide what you can do when something goes wrong.
§ 5If trouble starts
Warning signs include stalled work, missed dates, unreturned calls and requests for money outside the schedule. At the first sign, write to the developer, keep records and see a lawyer. Check the guarantee and its conditions, because the time limits for claims are short. Delay in acting is the most common reason buyers lose protections they had.
§ 6Related reading
For the legal protection of your money, guarantees for money paid in advance explains the rule, and an off-plan purchase describes the route.
Finished new homes are covered in a new build, and the handover of a new home explains the inspection.
The long-term cover is explained under seguro decenal.
If you want to avoid the developer relationship, a resale home is the alternative, and housing cooperatives are another route with their own risks.
The overview is in the new-or-resale choice.
§ 7A simple test
Before you pay, ask yourself whether you could explain to a friend, in two sentences, who the developer is, where your money goes and what happens if the building is never finished. If you cannot, you are not ready to pay. The answer to each part should come from a document, not from a conversation, and your lawyer should have seen the documents.
FAQRelated questions
How can I check a developer?
Ask for its registration details, the registry entry that shows who owns the land and a copy of the building licence, as the registrars advise. Ask your lawyer to read them, and search for the developer's history of past projects.
What if the developer goes bankrupt before the home is finished?
Your position depends on the guarantee for advance payments and on the contract. The law requires advance payments to be secured by a guarantee, so ask for the document, and take legal advice at once, because the conditions and time limits are strict.
Are small developers riskier than large ones?
Not automatically. Size is not a guarantee, and a small developer with a clean record and proper guarantees can be safer than a large one without. Judge by the documents, not by the sales brochure.
Sources
- Boletín Oficial del Estado: Ley 38/1999 de Ordenación de la Edificación (official source, opens in a new window), Articles 17 and 19; disposiciones adicionales primera y segundaLast checked 17 October 2026
- Colegio de Registradores de España: Cómo comprar una vivienda en España (edición revisada, February 2020) (official source, opens in a new window), The five steps, nota simple, taxes and costsLast checked 17 October 2026
- Consejo General del Notariado: Houses and real estate properties (official source, opens in a new window), Steps, documents and the notary's roleLast checked 17 October 2026
Legal note. How the process works in general. It is not legal advice, and it never replaces an independent Spanish lawyer acting for you.