The main worry buyers have about off-plan is simple: what happens to my money if the development is never finished? Spanish law answers it, and once you understand the protection, off-plan becomes far less daunting than it sounds.
Under current Spanish law, a developer selling off-plan must guarantee every amount you pay before completion — your reservation deposit and each staged payment — through a bank guarantee or an insurance policy. The money is tied to the specific project and the agreed delivery date. If the developer fails to deliver, you are entitled to recover what you paid, with interest.
What to check before you pay anything
- That the developer provides an individual guarantee or insurance certificate for your payments, in your name. Ask to see it.
- That your staged payments go into a special, separate account for the development, not the developer's general account.
- That the contract states a completion date and what happens if it slips.
- That the developer has the building licence in place.
Why off-plan is still attractive
You usually buy below the finished-home price, you can often choose finishes, and on the Costa del Sol's rising new-build market the value at completion has frequently exceeded the price paid. The protections above are what let you capture that upside without carrying the construction risk yourself.
A good lawyer verifies all of this before you sign. If a developer cannot produce the guarantees, walk away.
General information, not legal advice. Have your lawyer confirm the guarantees for each specific purchase.
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