Careful with changes concerning the guarantees on purchases of properties off plan.

Guarantees on purchases of properties off plan. Change in the Law.

Spanish legislation forces developers who sell properties off plan to guarantee the amounts paid on account by the buyers – consumers. This must be done through a bank guarantee or insurance policy. Is the guarantees on purchases of properties off plan regulations.

This legislation should mean that Spain is one of the safest countries in the world for buying properties ‘off plan’ (still unbuilt). Unfortunately, in practice, many abuses have been committed by developers and promoters; so it is always essential to employ proper legal due diligence before agreeing to a purchase of this type.

Change in the law.

Recent Spanish legislation, specifically the Law 20/2015 (which modifies the Law 38/1999), of Construction “Regulation”; has amended the law making it less in favour of the consumers’ interests.

From these changes, we highlight two amendments. That we do not like because they limit and affect the rights that the consumers and buyers had before:

1) Under the amendment, developers selling off plan must ensure the money paid from buyers, from the moment the development has obtained the building permit or license.

In other words,  the new wording seems to exclude the obligation to guarantee the amounts paid before Building license is obtained. Which was not the case previously.

Given the above, it is absolutely inadvisable to pay any money or buy any property off plan until there is a building license in place; or sufficient guarantee provided to the purchaser covering the money to be paid.

2) There has also been a new time limit added (limitation period). Now, after a period of two years, starting from the failure by the promoter or developer in its obligation. That is from the agreed date for delivery and handing over of the property. If the buyer-consumer does not request for the termination of the contract and reimbursement of the money paid, the bank guarantee will expire.

It should be noted that the above changes will take effect from the 1st of January 2016.

Therefore, those who have purchased prior to this date, should not be affected by these changes.

However, those who plan to buy off plan from January 2016 onwards, should take every precaution and make all necessary legal checks and verifications through their lawyers.

For any questions about buying properties off plan, or claiming for lost money, contact us.


The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.

Carlos Baos (Lawyer)

Spanish Law.

White & Baos 2015 – All rights reserved

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