Buying off plan: the guarantees that protect the deposit

Off plan means paying for something that does not exist yet. The law's answer to that is not trust: it is a guarantee document per payment, and a buyer should hold one for every euro transferred.

The protection on deposits

Amounts paid before delivery must be received into a special account used only for the development, and each one must be secured by a bank guarantee or an insurance policy that the developer arranges and the buyer receives. If the works are not completed or the building is not delivered within the agreed period, the buyer may demand repayment of everything paid together with statutory interest, calling on the guarantee.

The three warranty periods

Ten years for structural defects affecting the stability of the building, backed by compulsory insurance. Three years for defects affecting habitability, such as damp, insulation or installations. One year for finishing defects. Each period runs from the formal completion of the works, not from the purchase, so a buyer acquiring 2 years after completion inherits 8 years of structural cover and none of the finish cover.

The specification is the contract

A brochure showing a kitchen is marketing. The annexed specification listing materials, brands, grades and equipment is what binds. It should state the flooring, the joinery, the glazing, the air conditioning, the sanitary ware and the kitchen appliances by type and standard. Where a clause permits substitution for materials of similar quality, insist that any substitution is agreed in writing rather than announced at delivery.

Photographs of the works at each stage, dated, are worth taking on every site visit, particularly before surfaces are closed.

Delivery

Inspect before signing the handover, ideally with an independent technician for 300 to 800 €. Record every defect on a signed snagging list with a deadline for rectification. Confirm the first occupation licence exists, since utilities cannot be contracted without it. And check that the property as built matches the deed and the registry, because a discrepancy discovered later is the buyer's problem to resolve.

A worked example fixes the figures. On a 400,000 € off plan purchase with stage payments of 10 per cent on signing, 20 per cent across construction and 70 per cent at completion, the buyer hands over 120,000 € before the keys exist. Each of those payments needs its own guarantee document, and 3 guarantees for 3 payments is the paperwork that makes the protection real.