Questions and Answers about buying property in Spain

A. There are very good consumer protection laws in Spain.

Before the builder can get permission to build, he has to lodge either a cash sum or an insurance bond, so that should he go out of business there will be sufficient funds to repay your staged payments. Your lawyer should automatically check that these certificates are valid.

The law requires that the builder repays you your money plus interest at 6%, and that this must be stated in the contract that he asks you to sign; he is committing a serious criminal offence if he doesn't comply with the law.

A. The level of certainty concerning completion dates can vary enormously between different new purchases. Many people do not understand why this is the case, so I will try to explain.

Most developments are built in phases. There are a number of key points during the development that when reached (and only when reached) will allow the builder to continue. The developer will normally be required by the planning permission to have pre-sold a certain number of properties before building on phase 1 can start. Then for example, he will often not be allowed to start phase 2 until 80% of phase 1 is completed and cannot start selling phase 2 until all of phase 1 are sold, and so on.

So if the project is new and you are one of the first people to buy, you may be quoted one year for completion, but given that the builder cannot start work until a certain number are sold, nobody knows for sure when the work will start and so also when it will finish. If you buy at this early stage, then there will be considerable uncertainty over the actual completion date. The price of the property will, however, be low so as to attract enough early buyers so that he can quickly reached the point where he is allowed to start building. The prices will then rise (except for those who have already bought).

As the building continues and the properties start to take shape they become easier to sell and so the price goes up again. Phase 2 will soon start, and when phase 1 is complete the prices go up again, and so on. Clearly, buying at the start is the best way to make a good return on your investment, however there is greater uncertainty over the completion date. If the properties sell much quicker than expected, work will start earlier and so completion could be way ahead of the originally projected date.

If having a reliable completion date is important to you, then we will be happy to try and ascertain how reliable the completion date you've been quoted, really is.
It is important to remember that your contract for the purchase of your property will be with the builder and not with us. We will, however, assuming you take out our After Sales Service, monitor the progress of the building work for you, keep you informed of the progress and liaise with the builder on your behalf; we will even email photos of villa being built if you so request.