Ask for a detailed floor plan
As construction returns to Spain we see the resurgence of off-plan property sales following years of decline after the housing bubble burst.
Now, to help those looking at an off-plan purchase, the General Council of Real Estate Property Agents (COAPI) has generously published a 12-step guide to ensure you know your rights and understand the process completely.
- Be informed. Ensure you have as much information about the developer as you can find. Ask for proof that they own the land where the building will be and the steps they have already taken to ensure legitimacy, e.g. building licences.
- Check, and check again. Carefully review any contract you are presented with BEFORE signing. You will not be put before a notary until handover so it is advisable to get your legal representative to review the contract first paying special attention to payment terms, your rights in the case of a delay or the cancellation of the sale. The contract should also include the exact price, including all fees, but remember that it may not include taxes, and the specific date you should expect completion and to receive your keys.
- Everything written down. Request a detailed memorandum of materials, surfaces, communal areas, fixtures and fittings, services and facilities to avoid any disputes following completion. For example, if the memorandum states that your property will include outside lights then the finished property should include outside lights.
- Floor plans. It is important to know the exact dimensions of the property including not just your unit, but the entire building. Ensure you receive a detailed floor plan showing the size and orientation of the property, size and positioning of windows, doors and electrical outlets, light switches, door handles etc.
- Arm yourself. Collect as many brochures and advertising materials for the promotion you are buying as you can find. The more you have in writing at the time of signing, the more ammunition you have in the case of a dispute at a later date.
- Beware of delivery delays! The contract should include a penalty for the developer in case of delays in construction or handover, and in some cases this includes a clause ensuring that the developer makes a contribution to any accommodation costs you may have while awaiting completion.
- Paying Deposits. The buyer risks losing their deposit if the development does not go ahead. The most important thing here is to ask for proof of where the deposit will be held and that the money is specifically for the purpose of paying construction costs.
- Ask for a guarantee on the deposit. It is important to require the developer to guarantee your deposit will be returned to you if construction does not proceed, which will help you to reclaim the money.
- Personal needs? One of the advantages of buying off-plan is that the property is not yet built. In this respect it is sometimes possible, but not always, to request minor changes in the design, specifically, if you have any disability that requires changes in access or door width. Once construction is under way you cannot change the design so be sure to discuss this at the start of the process.
- Review. Before handover, ensure you use all the materials you have collected to review the property. It is essential to be sure everything promised in the contract and memorandum of qualities and fixtures/fittings has been delivered before signing. Once you sign the property is yours and it is too late to complain about the light switches being too low.
- Assert your rights as a consumer. Regulations set out by autonomous communities are there to protect you as the consumer and ensure the developer is liable to fines in the case of misrepresenting the product or failure to deliver on contractual obligations.
- Get legal advice. Sometimes the developer will not provide you with everything you request and will simply present a contract and ask you to sign it. In these cases, do not sign. Seek an alternative promotor for the same development or look at a completely different developer who is more transparent and accommodating. If you do decide to accept it you must get legal advice on the contract before signing to ensure your rights are taken into account and to check for possible unfair clauses or contractual obligations you did not expect. Ultimately, you can take the case to court for resolution of any conflicts.
In summary, buying off-plan property can be a risky business; will it complete? will it be legal? will it match the marketing and be the property you expected? When all goes well an off-plan purchase can be a great choice. Not only are you the first and only person to have lived in your new property, you will usually find you are paying less than those who wait until the property is finished.
Of course there are pitfalls, but aren’t there always? Be aware. Check every piece of paper, every clause and option. Get legal advice and then sit back and relax while your new property is constructed for you.
