In this article we explain a little more about buying off plan Marbella property. We explain how your protection if anything goes wrong. Off Plan properties are new build Spanish properties. Purchased direct from the developer, often before building.
This article explains how to mitigate risks and what happens if things go wrong. For example your protection if
- the developers go out of business
- the property is not built to the design or standards promised
- the project runs late.
Here is a brief summary on the advantages and disadvantages to buying off plan property.
Some of the Pro’s:
- They will have modern designs and interiors.
- New properties have the latest building standards.
- They are often much more energy efficient.
- They will feature the latest technology.
- They should come with a 10 year builder’s guarantee.
- Developers are always trying to upstage each other. Offering more and more standard luxury items. For example communal spas in apartment complexes and Jacuzzi’s and elevators in villas.
Some possible con’s:
- You will have to wait until completion to move in
- Many of the prime locations have long gone. Newer developments are generally not in the most prime locations
- There are more perceived risks involved
Marbella Off Plan is nothing new
Tens of thousands of apartments and villas have purchased off plan in the Marbella area in the past. This is nothing new and almost every buyer will have had the same concerns as you may have. The legal system is very well developed for this market. The process works very well and buyers are well protected if things go wrong.
Mitigating the risk of buying off plan in Marbella
Taking the right steps will protect all your funds if you do not get the promised property.
Employing a good solicitor (abogado) on your side will mitigate your risks. Your solicitor will do most of the below work.
Does the developer own the land?
Your solicitor will check the Spanish Land Register to be sure the developer owns the land.
You should receive a copy of the cadastral certificate. This shows the exact development land sizes as well as your personal property sizes.
You should visit the development to ensure you are happy with things like:
- the location
- surrounding properties
Does the developer have planning permission in place?
Your solicitor should ensure this is in place before you make any payments. Without planning permission the Bank Guarantees (see below) are not valid.
You can also check this at the Spanish Land Registry. A description of the project in the registrar is evidence that the licence exists.
Is a railway line about to cross your Marbella plot?
Your solicitor should also check the planning certificate for the plot. This is available from the town planning (Urbanismo) department. They should let you know about any relevant information. For example:
- any building restrictions on the plot
- if it is in a green zone
- any public footpaths across the land
- any current plans to build a railway for example
Is your Marbella off plan property money safe?
It is vital to have a bank guarantee (aval bancario) in place to cover all the payments you make. It is a legal obligation that all off plan developers secure all deposits with a bank guarantee.
Your solicitor should ensure that your bank guarantee is an individual guarantee. Not a collective guarantee covering the whole development. Collective Guarantees do not give the same levels of protection.
You should get proof that your payments are being deposited into an escrow account. Funds from these accounts are only for the construction of the specified development.
Is your developer registered with the Mercantile Registry?
Your solicitor should ensure the developer has a valid Mercantile Registry registration. They should also ensure the person who is going to sign on the developer’s behalf can legally do so.
You can check this at any Mercantile Registry office. Or online using the Land Registry website.
Does your developer have the right insurances?
Your solicitor should ensure that the developer has suitable insurance in place. Including the 10 year building insurance (seguro decenal). This covers damage caused by structural defects to the building for 10 years. Details of this insurance should be in the property manual (libro del edificio). Supplied to you by the developer.
Taking possession of your Marbella off plan property
You will get a certificate of final works (certificado final de obra) when your property is ready. You must have this before you sign the title deed. You can check this at the Land Registry. This is your proof from the seller that the construction is complete.
You must also have a licence of first occupancy (licencia de primera occupación). The town hall issues this for all new buildings. It certifies that the property is habitable. Without this document you cannot get an electricity and water connection. The developers should not try and force you to complete without this licence.
Do I need a survey?
You should consider getting a chartered surveyor to check the property. This is not obligatory. It is wise to get a professional opinion on the property before you complete. The Royal Institute of Chartered Surveyors (RICS) exists in Spain. They offer independent and impartial advice.
The Spanish College of Architects also has a list of independent specialist surveyors.
What if thing go wrong?
If things go wrong, which is very rare these days, you can:
- cancel the contract and have the deposits returned plus interest
- extend the deadline, allowing the developer to complete the property
if any of the below circumstances occur:
- the developer does not build your property by the deadline in the contract
- or services and utilities are not completed and connected to standard
- the licence of first occupancy is not possible.
If you decide you wish to cancel the contract you should get independent legal advice.
You, or your solicitor, should write to the developer. Explain you wish to cancel the contract due to non-compliance with the contract. You should request the return of all deposits paid as well as any interest accrued.
Include all relevant documents including:
- a copy of the contract
- copies of all payments made
- copy of the bank guarantee
Specify a reasonable date by which you expect the amounts to be repaid. Write to the developer using Burofax, so you can get proof of delivery.
If you receive no response from the developer within the specified timeframe. Contact the claims department of the bank requesting a refund of all the payments made.
Again, you should use Burofax. Include copies of all the relevant documents above. Include the complaint submitted to the developer. Also include copies of any responses received from the developer.
If the bank does not comply you will need to instruct a lawyer to take a civil case against the bank.
Moving into your off plan Marbella property
The above can sound negative – it is an article showing how you are always covered in the event that things don’t go well.
Tens of thousands of buyers have purchased great properties off plan here in the past and continue to do so. The system is well tested and provides proven buyer protection.
We have some spectacular new developments for sale at the moment. Take a look at these two great beachside developments in Estepona. Or this superb hill side development in Ojen.
If you would like to discuss any of the items in this article please contact Luxury Villa Sales on (+34) 952 77 44 33.
E&EO – Errors and omissions excepted. The above information is felt to be accurate at the time of writing. You should seek expert legal advice from a suitably qualified solicitor at the time of your purchase.