Process · Off-plan
Off-plan property purchases in Spain: legal framework, advantages and risks
Buying off-plan can be an attractive and legitimate way to acquire a new home, provided the developer meets its legal obligations and you check them first.
SHORT ANSWER
An off-plan purchase is a contract with a developer for a home that has not been built, or is still under construction. By law the developer must guarantee every advance payment with a bank guarantee or an insurance policy, issued individually in your favour, and must hold your payments in a segregated account for that project. Before paying anything, check the guarantee, the licence and the land registry, and use a specialist lawyer.
IN THIS ARTICLE
Off-plan purchases are common in the Spanish market, particularly in times of urban expansion. This summary, prepared by a specialist law firm, covers the essential legal aspects.
What is an off-plan purchase?
Buying off-plan means acquiring a home that has not yet been built or is still under construction. You sign a sale contract with a developer or builder for a property that will be delivered at a future date. It offers certain advantages, but also a number of legal and practical risks.
Which laws govern off-plan sales in Spain?
- Law 38/1999, of 5 November, on Building Regulation (Ley de Ordenación de la Edificación, LOE).
- Royal Legislative Decree 1/2007, approving the Consolidated Text of the General Law for the Protection of Consumers and Users.
- In general, the provisions of the Spanish Civil Code, particularly those on contractual obligations and termination for breach.
What must the developer do?
Guarantee your advance payments
The developer must secure all amounts paid before or during construction with a bank guarantee or an insurance policy (surety bond). It must ensure the refund of everything paid on account, plus statutory interest, if construction does not start or delivery does not happen on time. It must be issued individually in favour of each buyer and expressly referenced in the contract. Your lawyer should make sure the guarantee is issued and handed over, or the policy duly signed.
Use a special bank account
All advance payments must go into a separate bank account used exclusively to finance construction of that specific project. Ask for a bank certificate naming the developer and the project. This matters because the developer can only use your money for that development, and the bank must authorise each payment and ensure there is no misappropriation of funds.
Inform you fully and accurately
The developer must give you detailed and accurate information, including technical specifications, building plans, construction licences, delivery schedules and the total price, as required by Royal Decree 515/1989. This is usually done through a document called the DIA (Documento de Información Abreviada).
What are the advantages of buying off-plan?
- More competitive pricing: buyers usually get lower prices than for completed homes, because they help finance the project from its early stages.
- Customisation: you can often choose finishes or make minor modifications during construction.
- Capital appreciation: in a rising market, the value may increase before completion, generating a potential gain.
- Financial planning: payments are typically made in instalments during construction, which helps cash-flow management.
What are the risks?
The risks are significant, particularly when the statutory guarantees are not properly in place.
- Delays or construction stoppages: if the developer does not complete or deliver on time, you may face lengthy recovery procedures, especially if no valid guarantee or bond was issued.
- Missing or defective guarantees: failing to provide a valid bank guarantee or insurance policy, contrary to Law 20/2015, leaves you exposed to financial loss.
- Unilateral changes to specifications: unauthorised changes to plans or materials may be a breach of contract and lead to disputes.
- Developer insolvency: without properly individualised guarantees, buyers may rank only as ordinary creditors and risk losing their deposits.
What should you check before signing?
- Verify that a valid building licence and an approved project exist
- Make sure an individual guarantee or insurance policy has been issued and remains in force
- Obtain a land registry extract (nota simple) to confirm ownership of the land
- Include clear contractual clauses on delivery dates and penalties for delay
- Take independent advice from a lawyer specialised in real estate law before making any payment
Spanish legislation provides robust consumer protection, provided that the developer duly complies with its obligations on guarantees and transparency.
Marbella Solicitors
Article prepared by Marbella Solicitors, a law firm specialised in property and tax law, with lawyers registered with the Bar Association and six offices on the Costa del Sol. It assists with off-plan purchases from reservation onwards. For more on the market, read new-build prices on the Costa del Sol and the buying process.
Frequently asked questions
What guarantee must an off-plan developer provide in Spain?
A bank guarantee or insurance policy covering all advance payments, plus statutory interest, issued individually in favour of each buyer and referenced in the contract.
Where does my money go when I pay a deposit on a home under construction?
Into a special, segregated bank account used only to finance that specific project. You can ask for a bank certificate naming the developer and the project.
What is the main risk of buying off-plan?
Paying without a valid individual guarantee. If the project stalls or the developer becomes insolvent, you may rank only as an ordinary creditor and risk losing your deposit.
What should I check before signing an off-plan contract?
The building licence and approved project, the individual guarantee, a land registry extract (nota simple), delivery dates and penalties in the contract, and independent advice from a specialist real estate lawyer.
Every case is different: before you sign or decide, confirm your situation with your own lawyer, notary or tax adviser.
Sources: Law 38/1999 (LOE); Royal Legislative Decree 1/2007; Royal Decree 515/1989; Law 20/2015; Spanish Civil Code. Article prepared by Marbella Solicitors. Last updated: 5 February 2026.
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