Off plan property purchases are transactions with very specific characteristics. The main difference with respect to a second-hand purchase and sale is that, at the time of signing the contract, the property has not been built or completed. In this week’s article we analyse several key aspects that every off plan buyer must consider. The documentation that the developer must provide before signing the contract. And the most important aspects to bear in mind.
Legal guarantees regarding the amounts paid. Consumer rights.
The two main guarantees established by the Law on Construction Regulation for off plan property purchases, are:
– Special account.
The developer must have a special bank account for the purchasers to deposit the amounts intended for the sale and purchase. This account must be separate from any other bank account held by the developer. In addition, the developer may only use these funds for services related to the construction of the property in question.
– Guarantee of amounts.
In addition, from the moment the building licence is granted, the developer is obliged to guarantee the return of the amounts paid. By means of a surety insurance policy with an insurance company authorised to operate in Spain. Or by means of a bank guarantee, issued by a credit institution. If the surety insurance is chosen, each purchaser must have an individual insurance policy. The bank guarantee must also be individual, and it must also be registered in the Special Guarantee Register.
In both cases (policy and guarantee) the amounts paid must be guaranteed, together with legal interest, from the time the building permit is obtained.
Documentation to be provided by the developer to the buyer.
In addition to the above, the developer is obliged, by law, to make certain documentation available to the buyer, including the following documents:
– The general plan of the location of the property.
– Information on the useful and constructed surface area of the property, and elements linked to it.
– The plan of the dwelling itself.
– A description and layout of the electrical, water, gas, and heating networks.
– Fire safety measures in the property.
– General description of the building, common areas and accessory services.
– List of materials used in the construction of the dwelling, including thermal and acoustic insulation, and of the building and common areas and accessory services.
– Details identifying the property’s inscription in the Land Registry.
– Total price of the property and method of payment.
– Full details of the developer and builder: name or company name, address, registration in the Trade Register or public registers.
– Etc.
Conclusions.
Off plan property purchases can be a very safe option when purchasing a property in Spain, as long as all the guarantees established by law are complied with. If you wish to buy a property off plan in Spain, from a developer, at White-Baos Lawyers we can help you throughout the whole process. Please do not hesitate to contact us.
The information provided in this article is not intended to be legal advice, but merely conveys information relating to legal issues.
Carlos Baos (Lawyer)
White & Baos.
Tel: +34 966 426 185
E-mail: info@white-baos.com
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