If you want to buy an off-plan property, that is under construction or that has not yet been built (off-plan sale), it has the great advantage that it will allow you to make the purchase through partial payments, and not pay in one go. And it is that paying in one go is usually the general rule in the purchase of built properties. In this sense, the city of Malaga has now become a pole of attraction for people who wish to invest in a property either to live in or rent it as a holiday or seasonal rental, or, in the case of foreigners, to reside after obtaining your residence permit. The requirements that the house you want to buy must meet are different if you want to use it as a holiday rental.

But purchasing a property that has not yet been built has the inconvenience that you risk, as a buyer, losing the partial disbursements you make, since the construction of a house can be subject to many unforeseen events that can frustrate its construction.

The purchase of an asset that has not yet been built can be done in two different ways:

1. Making a contract conditional on the sale being made if the property is actually built. That is, if the house construction is not finished, there is no obligation for the buyer to pay the price of the property. But if the property is built, the seller has to deliver the house to the buyer, and the buyer has to pay the agreed price.
2. Making a contract in which the buyer agrees to pay the price, even when the property is not built. Of course, this option is less frequent, and less recommended in general for the buyer.

In this type of purchase, the seller must undertake to carry out the construction, providing all the necessary means to build the property, and be able to deliver it to the buyer once the construction is finished, within the period established for carrying out the construction work. In this type of off-plan purchase or under construction purchase, it is essential to set a deadline, which should not be left in the hands of the buyer or the seller, but must be a fixed deadline.

In this way, if the seller gets delayed and fails to meet the delivery deadline, and it is attributable to him, it will generate damage to the buyer that can be estimated in economic terms, with the seller having to compensate the buyer.

Can I terminate the contract when you buy an off-plan property if there is a delay in delivery?

The answer is no, unless the delivery time has been defined in the contract as an essential element, so that it has been clearly stated in the contract that if the property is not delivered on time by the seller, then you can terminate the contract. Otherwise, it will be understood that the buyer is acting opportunistically and in bad faith, and the contract will remain in force even in the event of a delay in the construction and delivery of the home by the seller.

Buying a property is a great investment that requires the advice of expert lawyers. We will accompany you throughout the purchase or sale procedure, checking all legal aspects involved, minimizing risks and optimizing the economic part and payment of taxes.

What is the way of payment when you buy an off-plan property or under construction?

The great advantage you have when buying a property under construction or off-plan is that you will be able to pay as the property or building is being built, paying in installments, although in advance of the property being delivered to you. But making advance payments has the drawback that, if the property is not finally built due to problems that may arise during the work and construction of it, there is a risk that the deferred payments will be lost. To protect the buyer of the property in the event that the seller does not comply, payment guarantees are created to ensure that the anticipated amounts can be returned. These payment guarantees are:

• Surety insurance contract: guarantees the obtaining of the building license and the return of the partial amounts delivered by the buyer, plus legal interest until the return is made. This surety insurance contract is granted with an insurance company or through a joint guarantee issued by a credit institution, in the event that the construction does not start, or does not finish within the agreed term. The amounts paid in advance by the buyer to the seller must be deposited in a special account.

What if the developer does not start the works or does not deliver the property on time?

If the seller does not get to start the construction works or does not deliver the property within the agreed period, as a buyer you can choose between:

• terminate the contract and that you are given back the amounts that you have been delivering on account, including taxes and interest on the money, or
• grant an extension to the promoter, specifying the new date of completion of the construction and delivery of the property.

What does the delivery of the property from the seller to the buyer entail?

Once the certificate of occupancy of the dwelling, the first occupation license or the document that in any case allows the dwelling to be occupied (inhabited), and once it is proven that the developer of the property has delivered the dwelling to the buyer, the guarantees mentioned above will be cancelled.

If you want to buy or sell a property, at the Pérez Parras Economists and Lawyers Firm we are experts in conveyancing, the sale and purchase of properties, with a team of lawyers and economists who can advise you to avoid surprises. Do not hesitate to contact us and ask for a quote to accompany you in the process of buying or selling your property in Málaga. We will prepare and review your earnest money contract after ensuring that the purchase you wish to make is viable and safe, without hidden charges, and we will help you and process all the taxes associated with your purchase/sale operation, optimizing, for example, the personal income tax to be paid if the property comes from an inheritance, advising you until the end of your purchase or sale.