{"id":6340,"date":"2011-09-27T12:09:00","date_gmt":"2011-09-27T12:09:00","guid":{"rendered":"https:\/\/www.white-baos.com\/legal-differences-between-buying-a-villa-off-plan-from-a-developer-or-buy-the-land-first-and-then-build-on-it\/"},"modified":"2020-09-10T07:24:38","modified_gmt":"2020-09-10T07:24:38","slug":"legal-differences-between-buying-a-villa-off-plan-from-a-developer-or-buy-the-land-first-and-then-build-on-it","status":"publish","type":"post","link":"https:\/\/www.white-baos.com\/en\/legal-differences-between-buying-a-villa-off-plan-from-a-developer-or-buy-the-land-first-and-then-build-on-it\/","title":{"rendered":"LEGAL DIFFERENCES BETWEEN BUYING A VILLA OFF PLAN FROM A DEVELOPER OR BUY THE LAND FIRST AND THEN BUILD ON IT."},"content":{"rendered":"

Dear Sirs,<\/strong><\/p>\n

My wife and I are interested in purchasing a Villa (off plan) in the Costa Blanca. The land is owned by the developer who has given us 3 different options to choose from for the construction of our Villa. He has told us that instead of signing a purchase agreement for the house, it is better to first sign a purchase agreement for the plot and built the house afterwards so that we have the assurance that the land is ours before construction. Although this will mean paying a bit more on VAT we believe it is worth it. Are you in agreement with this, is this the best option?<\/strong><\/p>\n

\u00a0<\/strong><\/p>\n

\u00a0Dear reader,<\/p>\n

\u00a0Thank you for your Email.<\/p>\n

\u00a0Firstly we must clarify that in Spain there is a huge difference between your legal position or rights if decide to purchase a finished house,\u00a0 OR to purchase of a piece of land and then built on it.<\/p>\n

In the first case if you\u00a0purchase a finished, completed or (as in this case off plan)\u00a0villa you are considered\u00a0purchaser-consumer\u00a0and the developer(vendor) legally becomes the promoter. BUT in the second case,\u00a0if you buy and registered the plot in your name and built the house\u00a0afterwards then you will be owners of a plot and\u00a0promoters or self promoters\u00a0for the construction works and the developer-seller becomes the builder or\u00a0 constructor. This is very important because the duties and responsibilities of apurchaser-consumer\u00a0are quite different from those of\u00a0promoters \/ self promoters.<\/p>\n

\u00a0<\/p>\n

As for your query, it is true that if you first sign a purchase Deed for the land and built afterwards you will have the \u201cguarantee\u201d of not loosing all your money if the promoter disappears. However and contrary to what you have been advised we believe that your investments can be better ensured as we understand that an off plan purchase is more convenient in your case.\u00a0As always, we remind you that each case must be individually analyzed to be able to advise accordingly<\/a>.<\/strong><\/strong><\/p>\n

It is our understanding that IN GENERAL it is preferable to buy an off plan property rather than just to buy the land and built afterwards for the following reasons:<\/p>\n

\u00a0<\/p>\n

1.-TAX SAVINGS IN THE VAT<\/strong>:\u00a0 from a fiscal tax point of view our option is cheaper:<\/p>\n

1.1.-If you purchase a complete package (land & house) off plan\u00a0it is considered a new property purchase or a first transmission purchase and the taxes to be paid are 8% VAT(although from 20-08-2011 to 31-12-2011 it will only be 4%)\u00a0<\/strong><\/a><\/strong><\/p>\n

1.2.-If you first buy the land and built after\u00a0you will pay 18% tax on the land purchase and 8% afterwards for the construction.<\/p>\n

\u00a0<\/p>\n

2.-RISKS AND RESPONSIBILITIES:\u00a0<\/strong>The risks inherent to the development of the Villa are not considered in your option.<\/p>\n

2.1.-If you purchase a complete package (land & house) off plan:\u00a0you are considered the final consumer and therefore you will not be responsible for obtaining any building permits, first occupancy license, compliance with Town Hall regulations or any constructions problems that may arise during or after the construction. Your only responsibility is to pay the builder<\/p>\n

2.2.-If\u00a0you first buy the land and built after: as legal owner of the plot you will be considered\u00a0PROMOTER\u00a0for the construction works and therefore will be liable to third parties, Town Hall regulations, building permits and first occupancy license, etc. –<\/p>\n

You will be equally responsible for any\u00a0possible problems or construction defects that may appear in the house such as cracks, dampness etc<\/a>.<\/a>\u00a0<\/strong><\/strong>Should you decide to sell the house in the future, the purchaser could sue you for any building defects since you as PROMOTER \/ SELF PROMOTER are jointly and severally liable for any other agents involved in the construction (architects, builders, etc). This is clearly pointed out in article 17.3 of the LOE\u00a0Building<\/em>\u00a0Law Order\u00a0<\/em>(Ley de Ordenaci\u00f3n de la Edificaci\u00f3n)\u00a0<\/em>that states:<\/p>\n

\u201c\u2026..In any case the\u00a0promoter will be jointly and severally liable as well as the other agents involved in the construction for any property damages due to building defects in front of the purchasers.\u00a0<\/em>\u201c<\/em><\/p>\n

\u00a0<\/p>\n

3.-<\/a>CONSIDERATION FOR THE CONSUMER AND PROTECTION BY THE LAW 57\/1968<\/a><\/strong>\u00a0<\/strong><\/strong><\/p>\n

3.1.-\u00a0If you purchase the land & the off plan Villa at the same time :you are considered purchaser-consumer and are protected, among others,\u00a0by the Law 57\/1968 that forces the seller \/promoter to have an insurance policy or bank guarantee for all the funds he receives from the purchaser<\/a>\u00a0as well as the interest accrued on the funds, until he is able to hand over the completed\u00a0 property with a\u00a0 first occupancy licence.\u00a0 Therefore if you receive adequate legal advice your monies will be guaranteed if the developer is not able to fulfil his obligations.<\/p>\n

\u00a03.2.- If\u00a0you first buy the land and built after: you will not have this guarantee since you\u00a0 are the promoter and thus any problems arising from the builder, architect or just from\u00a0 trying to obtain the relevant permits will not have this guarantee or insurance policy, although you could, in principle, sue the person responsible (being other than yourself).<\/p>\n

\u00a0<\/p>\n

Although there are other aspects to be taken into consideration such as the possibility to obtain funds from a bank for one option and the other, it is our understanding, for all the above given reasons that it is better, cheaper and above all more secured to buy off plan from the promoter (with all due guarantees) than purchasing first the land (plot) and built afterwards.<\/p>\n

\u00a0It is essential in any case to receive the appropriate\u00a0expert legal advice in the negotiation and drafting of contracts to insure the adequate protection for your interest.<\/a>\u00a0\u00a0<\/strong><\/strong><\/p>\n

\u00a0Should any reader find himself or herself in this situation or similar please do not hesitate to contact us and the appropriate advice will be provided.<\/p>\n

\u00a0The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.<\/em><\/p>\n

\u00a0This article is available in English and Spanish at our Web site:\u00a0www.white-baos.com<\/a><\/p>\n

\u00a0Carlos Baos (Lawyer). Tel: 966 426 185. E-mail: info@white-baos.com. White & Baos 2011 \u2013 All rights reserved<\/p>\n","protected":false},"excerpt":{"rendered":"

Dear Sirs, My wife and I are interested in purchasing a Villa (off plan) in the Costa Blanca. The land is owned by the developer who has given us 3 different options to choose from for the construction of our Villa. He has told us that instead of signing a purchase agreement for the house, […]<\/p>\n

Read More…<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[427,412,428],"tags":[],"yoast_head":"\nLEGAL DIFFERENCES BETWEEN BUYING A VILLA OFF PLAN FROM A DEVELOPER OR BUY THE LAND FIRST AND THEN BUILD ON IT. - White & Baos, Abogados & Solicitors<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.white-baos.com\/en\/legal-differences-between-buying-a-villa-off-plan-from-a-developer-or-buy-the-land-first-and-then-build-on-it\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"LEGAL DIFFERENCES BETWEEN BUYING A VILLA OFF PLAN FROM A DEVELOPER OR BUY THE LAND FIRST AND THEN BUILD ON IT. - White & Baos, Abogados & Solicitors\" \/>\n<meta property=\"og:description\" content=\"Dear Sirs, My wife and I are interested in purchasing a Villa (off plan) in the Costa Blanca. 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