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Buying off-plan in Spain: bank guarantees that protect your money
On a new build you pay before the home exists. The law makes the developer secure every euro — here is how to make sure yours is covered.
Why off-plan needs special care
When you buy off-plan you hand over staged payments months or years before completion. If the developer fails, those payments are at risk — unless they are legally guaranteed. Spanish law has protected buyers on this point since the original Law 57/1968, now embodied in Law 38/1999 on Building (LOE).
What the developer must do
Every amount you pay on account during construction must be secured by an individual bank guarantee or insurance policy, and held in a special, separate account that can only be used for the building work. If the home is not delivered, or not delivered on time, you are entitled to recover your money plus interest.
What we check before you pay a cent
- The developer owns the land with clean title and holds a valid building licence.
- A genuine bank guarantee or insurance certificate exists for your specific payments — not a vague promise in the brochure.
- Funds go into the special account, and the contract ties completion to the licence of first occupation (LPO).
- The contract documents the snagging process and the developer's defect-liability obligations after handover.
If something goes wrong
Delays are common; total failure is rarer but devastating without protection. With the guarantee in place, a serious delay or non-delivery becomes a recoverable claim rather than a lost deposit. Without it, you may be an unsecured creditor in an insolvency — which is why we will not let you fund an uncovered stage payment.
New-build hotspots such as Estepona, Mijas, Manilva, Ayamonte and Vera see a lot of off-plan activity; our location guides flag what to verify in each.
This guide is general information, not legal advice for your specific case, and tax and planning rules in Spain change frequently. For advice on a particular property, get in touch for a free consultation.
