Note

Buying off plan in Spain

§ 1What off plan means

Buying off plan means signing and paying while the home is still a plan or a building site. You pay in stages as the work advances, and you receive the home at the end. The attraction is a lower entry price and the chance to choose finishes. The cost is that you carry the risk of delay, change and failure before you have anything to inspect.

§ 2The legal protections

Spanish building law requires a developer who collects advance payments from buyers to guarantee their refund and to hold the money in a separate account used for that purpose. The ten-year structural guarantee also applies to the finished building. These protections are the reason off-plan buying is workable, but they depend on being in place, so ask for evidence of the guarantee and the account before you pay, not after.

§ 3Checks before you pay

The registrars advise checking, before paying any deposit, the developer's registration, its ownership of the land and the building licence. Ask for the plans and the specification and compare them with what the sales office showed you. Ask who holds the guarantee and whether it covers each payment. Read the clause on delay, since a completion date without a consequence is only a hope.

§ 4How to pay

Notaries prefer payment by bank transfer or nominative cheque. Pay each stage into the account named in the contract and keep the receipt. If a reservation uses arras, read which kind it is: confirmatory is the most common, and penitential applies only if agreed and changes the cost of withdrawing.

§ 5Typical problems

Delays are the commonest problem. Others include changes to the specification, a building that differs from the sales brochure and a developer that runs out of money. Each is easier to handle if the contract says what you can do. Ask your lawyer which clauses give you a right to cancel and to a refund, and which do not.

§ 6Where to read next

The refund guarantee is the heart of the matter, and protection for advance payments explains how it works. The risk of a developer that cannot finish is covered in the risk of an unfinished building.

For the end of the process, the handover inspection shows what to check when you receive the home, and the ten-year guarantee explains the long-term cover.

Completed new homes are covered in new homes from a developer, and what a resale involves describes the alternative.

Groups of buyers sometimes build together, which joining a housing cooperative explains, and the main comparison is on whether to buy new or used.

§ 7A rule of thumb

The more you pay before you see the home, the more you should have checked. A small, refundable reservation against a full contract is one thing. Large instalments against a promise are another. Let your lawyer see the contract, the guarantee and the account details before the first instalment, and do not be hurried by a limited offer.

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