For many years the idea of a buying an off-plan property in the Costa del Sol was unimaginable for many. And understandably so. During the era of scant regulation, when buyers were much less well-informed, the pickings were rife for unscrupolous snake-oil salesmen to feast on. But the property market is no longer the Wild West that it once was, and the client has access to all of the information necessary to make his own definitive research.
Buying “off plan” certainly takes a leap of faith. To buy a home based on images, words and models is a step too far for many.
But for those who keep an open mind, engage a trusted agent and an impartial lawyer, and understand the benefits of buying a new home in this way, the rewards are wonderful. Property development on the Costa del Sol is a booming industry and has become highly regulated. The days of the Wild West are gone, times which saw enthusiastic and gullible buyers committing large sums of money to sometimes 2 or 3 apartments offered with 100% finance or even 110%, based on the word of a silver-tongued real estate agent. Although such smooth-talking individuals are still in plentiful supply on the Costa del Sol, the legislation brought in to oversee the market within the European Unión has put a nail in the coffin of those who wish to pitch heat to sell property, and oull the wool over the eyes of investors. And more importantly, the access of all information via the internet allows for switched-on clients to do their own research.
It is nevertheless a daunting task to establish the confidence needed to buy off-plan in a foreign land. But with a few straight forward pointers, it is simple enough to ensure that you have the checklist at your finger tips. But before we look at that, lets´s look at why so many people today choose to purchase a lovely home in this way, when they have to wait patiently for the delivery date.
Buying off-plan gives:
Early investor low entry prices. Developers reléase the early units to attract the interest of buyers, which then continues to attract others.
Easy staged payments during the construction term. The cost of an off-plan property is paid in installments during the construction, and if this is an 18 or 24 month oeriod, it can be very advantageous to buyers.
Option to model your own interior. Often, a developer can work with the end-user to make personal changes within the interior of the property.
On completion mortgage accessible. A mortgage can only be granted on existing bricks and mortar. And so once the propert is built, the new owner Will be able to apply for a mortgage of the remaining amount owed to the developer.
Brand new home. The dream of owning your own bespoke home that has never before been lived in is a reality.Under Spanish property law, a new build home has to be delivered with a Seguro Decenal, a 10 year building guarantee, which is never a prerequisite with a resale property.
And so, what is important to know?
Be absolutely clear about the ownership of the land on which the complex is to be built. The Land Registry can be easily accessed (]https://sede.registradores.org/contenido/buyingahouse/) in order to confirm the ownership of the land. All planning certificates can be requested from the town planning (Urbanismo) department of the town hall.
Understanding the length of time that you could be waiting for your home to be built and completed is paramount. It must be clear as to whether or not the building licence (Licencia de Obras) is in place, because without this no work can be instigated on the site. Perhaps you will be told that it will only be a matter of a few weeks for it to be granted. Be absolutely clear. No agent, promotor, developer or lawyer is in a position to make such a statement. The granting of the licence is down to the Town Hall planning department exclusively, and they will grant it as and when they have carried out their own due diligence searches and technical inspections. Sometimes this can take months, depending to some extent on the jurisdiction in which the property will be built.
The benefit of buying off-plan is that the payments can be made in stages, alowing you to spread the cost and invest in your dreamhome step by step over the proces of its build. So it is mportant to know that your stage paments are covered by a bank guarantee, known as an “aval bancario“, and all developers of off-plan projects are obiged to have this security to protect your payments.
Your payments must be guaranteed to be used exclusively for the build of the proeprty in which you are investing. In order to ensure this the payments must be transferred into an escrow account.
The developer will have a representive who is tasked with signing on behalf of the company. Ensure that the developer is registered with the “Registro Mercantile,” and that the assigned person has the correct aurthority to be signing the paperwork.
One of the main benefits of buying new build property governed by the EU regulations in Spain as oposed to resale proeprties is the mandatory 10 year property guarantee warranty which ensures that the developer has insurance covering damage caused by structural defects to the building. This insurance should be included in the property manual (libro del edificio) that the developer gives you. It is known as the Seguro Decenal in Spain
Once cnstructon is finished, the building Will be issued with a certificate known as Certificado Final de Obra, which will confirm that the property has been constructed exactly as specified in the original plan. This can be requested in the Land Registry.(]https://sede.registradores.org/contenido/buyingahouse/)
On the signing of the completion of contracts, the property will have received what is called it´s First Occupation Licence, “Licencia de Primera Occupacion”, which is granted once the town plannning authorities have inspected the finsihed work to ensure habitability. Although not obligatory in Spain, it is always possible to engage the services of a Chartered Surveyor.
Unquestionably, the silver-tongued salesman may have some fascinating, if not entirely true, strores for you, and will be very engaging. But just be sure to doublé check everything you are told. Do your own investigations and for more informaton use sites such as this one…..https://www.gov.uk/guidance/how-to-buy-property-in-spain