Off-Plan Property Law
Buying off-plan on the Costa del Sol can be an excellent investment — but only with the right legal protection at every stage.
Buying off-plan — known in Spanish as comprar sobre plano — means purchasing a property that has not yet been built, or is currently under construction, based on architectural plans and specifications provided by the developer. The buyer typically pays a reservation fee, followed by a series of stage payments during the construction period, with the balance paid at completion when the title deed (escritura) is signed before a notary.
The Costa del Sol has long been one of Europe's most active markets for off-plan property. New developments in areas such as Estepona, Marbella, Benalmádena, Fuengirola and Torremolinos regularly attract buyers from the UK, Scandinavia, Germany, the Netherlands and beyond. The appeal is clear: buyers can lock in a price at today's market rates, customise certain finishes, and — when the market is rising — complete on a property that has already appreciated in value.
However, off-plan purchases carry risks that do not exist in resale transactions. Developers can go insolvent. Building licences can be delayed or refused. Completion can be pushed back by months or years. Without proper legal representation and documentation, buyers can lose their stage payments and have limited legal recourse. The good news is that Spanish law provides meaningful protections — but only if you ensure they are in place from the outset.
Under Spanish law — specifically Ley 57/1968 (now effectively superseded but reinforced by later legislation) and the updated framework introduced by the Ley de Ordenación de la Edificación — developers who accept advance payments from buyers for properties under construction are legally required to provide a bank guarantee (aval bancario) or insurance policy covering every euro paid by the buyer prior to completion.
This means that if the developer becomes insolvent, ceases construction, or fails to deliver the property by the agreed date, you have the right to call in the guarantee and recover your money — including interest at the legal rate from the date of each payment.
Despite being a legal obligation, not all developers comply. Some issue guarantees that cover only part of the payments made, or that have incorrect or incomplete documentation. Your lawyer must:
If a developer offers only a collective or communal guarantee for the entire development rather than an individual guarantee per buyer, this is a red flag and must be reviewed by your lawyer before proceeding.
A typical off-plan payment structure on the Costa del Sol looks approximately like this: 1–3% reservation fee at the point of reservation; 10–20% private purchase contract (contrato privado de compraventa) stage payment; further staged payments totalling 10–30% during the construction period; and the remaining balance (usually 60–70%) paid at notary completion. Every payment after the reservation must be covered by an updated bank guarantee certificate.
Your lawyer should review the private purchase contract in full before you sign it. Key clauses to scrutinise include: the projected completion date and what penalties (if any) apply to the developer for delay; conditions under which you can withdraw and recover your money; the specification of the property (size, fixtures, materials) and what happens if the developer changes the specification; and the mechanism for issuing bank guarantee certificates for each payment.
Before signing any off-plan contract, your lawyer should confirm the status of the planning permission for the development. There are two key documents to check. First, the licencia de obras mayor (major works licence) — this is the municipal building licence that authorises construction to begin. A developer marketing properties without a building licence is selling on the basis of planning that may never be granted. Second, the licencia de primera ocupación or certificado de primera ocupación (first occupation certificate / habitation certificate) — this is obtained after construction is complete and is what makes the property legally habitable and eligible for utility connections.
If a developer is marketing a project at a very early stage, the building licence may not yet have been issued. This is not necessarily a disqualifier, but the contract must contain clear protections allowing the buyer to recover all payments (with interest) if the licence is ultimately refused.
One of the most common complaints from off-plan buyers on the Costa del Sol is that the developer completes the physical construction but then takes months — sometimes years — to obtain the licencia de primera ocupación from the town hall. Without this document, the property cannot be legally inhabited, cannot be connected to mains utilities through the municipal network, and cannot be registered in the Land Registry as a completed residential property.
In this situation, the developer is technically in breach of contract if the habitation certificate is not obtained by the agreed completion date. Your lawyer can advise you on whether you can: extend the deadline and await resolution; demand the developer cover the cost of alternative accommodation or rental income losses; or, in more serious cases, rescind the contract and recover all payments with interest.
You should never sign the completion deed or make the final payment until the habitation certificate has been issued. A developer may try to pressure you to complete without it — resist this and take legal advice first.
Before you complete on any off-plan property, you are entitled to carry out a snagging inspection (puntos de repaso or lista de defectos). This is a walkthrough of the property — ideally with a qualified surveyor or architect — to identify any defects, unfinished work or deviations from the agreed specification.
You have the right to have defects corrected before completion. Any agreed defect list should be formally documented and signed by the developer. Completion should not take place until the most significant defects have been rectified, or until there is a clear written commitment from the developer — with a deadline — to address them post-completion.
Under the Ley de Ordenación de la Edificación (LOE), all newly constructed properties in Spain benefit from a mandatory 10-year structural guarantee (garantía decenal). This covers major structural defects — foundations, load-bearing walls, roof structures — that affect the habitability or structural integrity of the building. In addition, there is a 3-year guarantee for defects affecting habitability (waterproofing, insulation) and a 1-year guarantee for finishing defects.
Your lawyer should confirm that the developer has arranged the required insurance policy covering the garantía decenal, and that the policy details are included in the title deed at completion.
We act for buyers at every stage of off-plan purchases on the Costa del Sol — from reviewing the private purchase contract to attending notary completion. Contact us before you sign anything.