Index:
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Legal searches
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Bank guarantee or insurance to protect your payments
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Reservation agreement
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Purchase agreement
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Additional documentation before notarization
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Recover your payments
Legal searches
When buying an off-plan property, it is very important to carry out the necessary legal searches to protect your investment.
Keep a copy of all documentation included in the offer, promotion, and advertising, as its content could be binding on the developer, even if not included in the purchase agreement (for example, urbanization plans with swimming pools, number of bedrooms, square meters, etc.).
The first step for your lawyer should be to verify at the Commercial Registry that the seller’s company exists, is operating normally, and that everything is in order. Additionally, they must check that the representatives appearing in the Commercial Registry are indeed the ones signing the purchase agreement.
You should request all mandatory documentation from the developer or real estate agent (some of which should already be available at the time the property is marketed) and review it before signing the reservation and purchase agreements.
Requirements may vary by Autonomous Community, but generally include:
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Identification of the developer and other professionals involved (e.g., architect), so the buyer knows who to hold accountable in case of construction defects.
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Details from the Land Registry regarding the land on which the properties will be built, to verify ownership and check for encumbrances or liens.
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Construction plans showing what will be built and how.
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Copy of the building permit.
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Certificate proving that the bank or insurance company will cover all payments you make until completion.
Bank guarantee or insurance to protect your payments
A key point in off-plan purchases is that all amounts paid are guaranteed in case the seller fails to fulfill the contract (e.g., delivers the property late, enters bankruptcy, or becomes insolvent).
There are two ways to guarantee your money:
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Through a bank guarantee, or
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Through an insurance policy.
In both cases, it is the seller’s obligation to provide a guarantee for each payment made. If the developer breaches the contract, you can claim not only against the developer but also against the guarantors.
It is essential that your payments are made into the seller’s special account. A special account is one where deposited funds can only be used for the construction of the property, and the developer cannot use the funds for any other purpose. The seller must open this special account and provide evidence of its existence.
It is common for the purchase agreement provided by the seller to include clauses that may be unclear or abusive to the consumer-buyer. For example, clauses that penalize the buyer with loss of funds in case of breach, while not penalizing the seller for late delivery or for deviations from the property description—such as fewer square meters—or agreements without a specific completion date. Depending on the clause and how it is drafted, it may be considered abusive under consumer law, and the courts may declare it null. In some cases, a clause should apply to both parties, even if the contract seems to apply it to only one side.
After handing over the keys and possession, the builder may still be liable for defects or construction failures.
If you pay the real estate agent, ensure you receive evidence of any payment made, what it covers, and that it is also covered by a guarantee.
Reservation agreement
Check whether you will receive your money back if you ultimately decide not to purchase the property, and ensure that a lawyer reviews the reservation agreement. Reservation agreements are usually very brief and may not adequately describe the property or the obligations of each party. You must ensure that everything is correct and includes a complete description of the property and the complex before proceeding with the purchase.
Purchase agreement
The purchase agreement should include the following information/documentation:
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Description of the property with plans showing the built area and usable area. Avoid vague descriptions like “cuerpo cierto” which means the property is sold without specifying square meters.
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Description of the complex or building (number of pools, bars, tennis courts, etc.).
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Construction details: materials used in construction.
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Specific delivery date of the property.
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Price and exact payment method, including any applicable taxes.
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Delivery of mandatory guarantees to secure the return of advance payments with interest and compensation.
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Specification that payments will be made into a special account (only for construction).
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Parking space number and square meters.
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Storage room number and square meters.
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Any furniture included at delivery should also be listed in the contract.
Additional documentation before notarization
Before notarizing, once the property is completed, you should have the following available:
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Copy of the certificate of completion of works.
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Energy efficiency certificate (CEE) and energy label.
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Community of Owners’ statutes.
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First occupancy permit and habitability certificate, where required.
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Utility companies and related certificates.
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Building logbook.
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Evidence that not only the property but the complex has been completed.
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Ten-year insurance covering construction defects (decennial insurance).
It is strongly recommended that, once the property is finished and before signing at the Notary, you visit the property and ensure that both the property and the development match the contract, including square meters, furniture, plot, etc.
Cantos Abogados is committed to defending the rights of consumers and users, with extensive and recognized experience in this sector, particularly regarding foreign national consumers.
