Buying Off Plan in Marbella
Buying off plan in Marbella is undoubtedly one of the best ways of securing your ideal Spanish property at the best price. Indeed, buying off-plan has been extremely popular with overseas investors for many years, although we acknowledge that the reputation of this method of buying property did get somewhat tarnished in Marbella and went into a decline during the recession. However, the new off-plan era in Marbella is nothing like the old and we have already seen a number of fabulous off-plan developments that have sold like hot cakes, the building has been completed and the new owners have moved in.
The benefits of buying off plan in Marbella
There really are some incredible benefits to buying off plan in Marbella:
- Early buyers get best choice of the perfect apartment with desired orientation and views.
- New builds are often discounted, so you’ll get the property at a better price and you may get help with financing.
- Staged payments mean that you don’t have to commit a significant sum of money in one go, plus your property may have already gained in value by the time of completion.
- The price is fixed, so if the market does heat up, you’re getting a bargain.
- There is potential for you to have some say in the fixtures and fittings.
- Nobody else has lived in it, there should be few maintenance issues for some time and new builds are easy to rent out.
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Guide to buying off-plan
However, you should always be extremely careful when buying off-plan. The following checklist identifies all the points you should cover with your lawyer.
- Before signing the reservation contract always consult with your property lawyer and estate agent as they are the only people who will point you in the right direction. In most cases the reservation deposit (around 6,000€ to remove the unit off the market on your behalf) is paid to the lawyer in an Escrow account. Exceptions in this rule do exist where you pay this directly to the developer. Following the reservation deposit, your instructed lawyer will start the searches making sure the developer and development is sound.
Normally, within a week or two of those developments where construction has started, the lawyer will advise you of the searches and if everything is in order and you are happy to proceed; the next step will be the first down payment and signing the private contract. This payment will vary between 10% and 30% (less the initial reservation deposit). At this stage you are now committed and no money is refundable if you reconsider. The monies are only refundable if the developer reconsiders for any reason. All money paid are kept in Escrow accounts or Bank guarantee accounts to guarantee your money has not been spent by the developer unlike how it use to be in the boom years of 2005 to 2007. Your lawyer would have done the due diligence for this at the start of the process.
When a brand new development is just launched, your lawyer will only release the first down payment when the developer has had proper building licences to start the building work. You still have to pay this however with the added security that your lawyer is handling this on your behalf. At this stage, these licenses can take between 2 and 5 months, which are included in the time when the development is delivered.
In the meantime after all building licences are granted, the developer will ask for its first occupation licenses. This will also take between 2 and 4 months to get from the local authorities. Only when this has been received will you be asked to pay the final payment and sign the deeds of your property in front of a Notary and your lawyer. All the above before was never applied and this setup has finally given new properties a safer way to buy and only paying when things are in place. Again, with the assistance of your lawyer all the way until you pick up the keys.
Do not ponder for too long! Even though you should take your time to think about buying an off plan property in Marbella, they are very popular right now and it really is first come, first served, so do your research but don’t miss out by waiting too long!
Review any contract with your lawyer and pay close attention to the payment terms, your rights in case completion are delayed or you wish to cancel the sale. Make sure the contract includes the exact price and completion date, and consult your lawyer about the additional taxes you will need to pay. Also, get a detailed list of the materials to be used in the building, the utilities, fixtures and fittings, services and facilities. These must all be in place in the finished build, so you need to know what to expect.
Get a detailed floor plan of the entire building that includes the exact dimensions of your unit(s). The plans should also include location of electric sockets, windows, doors etc.
Check what will happen if there is a delay in delivering the project. It is standard for a building contract to include a penalty clause if a developer does not finish on the date stipulated in the contract. This information is important while the wait for all licenses and your lawyer will be able to advise you.
Once the developer contacts you to confirm that the property is finished and the handover is imminent, in many cases checking the property before you sign the keys is advisable for all purchases here in Spain. However, on new builds this is more difficult to do. So when you do get into your new property, make sure you check everything is in order as there will be a limited time for you to do a snag list of any problems in your unit. This is also another aspect your lawyer will be able to advise you on.
Remember that a good lawyer is your best friend when you are buying off plan. If a developer attempts to bully you into signing a contract that does not cover everything you want, do not sign. Talk to your lawyer. The advice from the General Council of Real Estate Property Agents is this: look for an alternative promoter for the same development, or abandon your plans to buy there and look for another new development in Marbella where the developer and promoter are prepared to be perfectly transparent and to accommodate your legal and consumer rights. Ask your lawyer to go through every clause and check for anything that is unfair to the buyer. You want to be in a position where you can take your case to court and resolve conflicts there.
Spain’s off-plan laws update
Even though you will still need a lawyer and you should always check the fine print just as you would do back home, the fact is that buying off plan in Marbella has become a lot more secure and safe in the recent years due to the new legislations set by the Spanish Courts. With new developers having to proof the have enough funds to see the project through and have a great track record of finished developments in Spain and other countries, plus the reservation deposit being guarded by your own lawyer, we have not heard of problems with new developments for quite a few years now.
Thanks to these new legislations, many more new developments in Marbella are now being launched and are extremely popular, with some developments selling out within a matter of days! You really need to have a good Estate Agent on your side who knows exactly when new developments are being launched in Marbella so you get first pickings of these luxurious and affordable off plan properties.
Marbella Dream Living are experts on new developments on the Costa del Sol and have the expertise to ensure you not only get the best offers available, you will also get the best service and guidance when buying off plan in Marbella.
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