Should you buy an off-plan property in Spain!

In the current state of the property market, including some instability following a coronavirus pandemic in Spain, people are looking for cheaper ways to buy an apartment or house in Spain, particularly new buildings with wider surfaces and open space. One way to reduce costs is to buy a non-proprietary property, which is estimated on average 15% cheaper than to buy a used, second-hand home. lusail qatar

What does the property off-plan mean?

How does it work to purchase the plan?

Things to remember before you purchase off-plan

 

What does the property off-plan mean?

An off-plan property is simply a building not yet constructed, which means that potential buyers make their decision only by looking at a property's designs.

How does it work to buy the plan?

A particularly popular option among real estate investors and speculators is to buy off plans in Spain before the work has started but after the construction plans are drafted and the design permit is granted. This provides the buyer with some safety that the place in which they invest is above board and legal and the chance to see what the place looks like. At the end of the day. One of the big benefits of buying out-of-plan is that you can buy in an upcoming area or in somewhere where you really get your heart set before it's all built up and there is too much demand.

Things to consider before you purchase off schedule

Whilst the significantly lower costs of off-plane purchases may be more attractive, there are certain risks associated with them, which do not apply to other transaction types. Of these, not least, is the fact that the developer can run out before the work is finished, so your investment money goes down the drain.

Off-plan property options were fairly popular in Spain until the 2008 economic crisis arose and many people lost their money in purchasing pre-construction properties. Since then, banks have been offering guarantees (bank avales) against this option. You are strongly advised to have one with your bank for your individual property instead of a collective one for the whole development before you sign anything with the promoter, because it will provide more coverage.

As soon as the plan authorisation is granted, the developer is also required by law to safeguard all deposits with a bank guarantee. You can either check the planning permit on your own or in the Land Registry to ensure that the developer has every legal documentation in order and the land on which they are building is actually registered.

Furthermore, make sure the developer has a separate building damage insurance, which is available in the property manual (libro del edificio).

In addition, you should receive a Catastral certificate stating land information, such as where the borders really lie, and a certificate stating the planning situation including all construction restrictions, green zones, public walking trails or future construction plans on the same parcel. These can be found at cadastre offices or online and at the local city hall.

Only when you are sure that it is all right should you sign a contract to ensure that the contract contains the amount to be paid and the deadline to complete the construction work. Once the building is completed, you will be issued with the seller's certificate of finalization (certificado final de obra) and a first occupancy license (licencia de primera ocupación) meaning that it is safe to live in. If you want, you can also look over the property from a chartered surveyor just to see how everything is, as the developer promised.

If any problem arises with the developer, such as that the work is not terminated on time or the purchase contract standards are not met, you can either extend or cancel your contract by returning all your deposits with interest. If you decide to take the latter route, a lawyer will best help you with all the required documentation and processes. You could also be helped by a lawyer if you had to go to court.

Although all these risks may sound daunting, do not let your shopping off schedule be discarded. As long as you are prepared to wait until construction of the apartment or house is complete, you will probably do well to purchase your next home or investment property if you take the necessary precautions and do not cut corners.

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