What you need to know to buy off-plan in 2016

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The new year begins, for many, with the illusion of buying a new home. After more than 7 years of crisis in the property sector, it seems that the time has come to sell new off-plan properties again, but you should be aware that some things have changed.

Before starting the purchase, it is necessary to learn from previous mistakes and remember that there are those who at the time opted to buy off plan and after some time found that the developer not only stopped the work on their home, but also that they had not been given a bank guarantee and, before having consulted Bufete Salmerón, they thought they had lost their home and the money they had paid in advance overnight.

Therefore, although our lawyers have achieved in 100% of the cases the return of all the amounts paid on account plus interest and costs even when the buyer did not have a bank guarantee, it is advisable to be foresighted in order to avoid great disappointment, very specialised legal actions and the always unpleasant feeling of injustice and indignation.

So, here is what you should know and do when you decide to buy:

1º Check who the seller is. Is the developer the owner of the plot on which the property is to be built? Is the construction authorised and do they have all the necessary licences? What other developments have they worked on? Are they a solvent company? Many of these answers can be found at the Land Registry or at the Town Hall itself.

2º Check that there are no abusive clauses in the contract. Some examples: that you are obliged to take out the mortgage with the entity with which the promoter maintains its loans, that the promoter can change the design of the property without your consent, etc.

And remember that when you sign the mortgage with the bank you have chosen, you should also check that there are no abusive clauses in the mortgage loan such as the famous floor clauses that are forcing the banks to return an average of 10,000 euros to those who contracted them, when there is a legal action.

3º Ask for the plans of your property and information about the exact location of the development, its useful surface area, the building specifications, the orientation, the energy efficiency of the property, etc., and even meet with the architect, agree with him the changes you wish to make, check that they are made on the plan and ask as many questions as you think necessary until you are sure you understand absolutely everything.

4º You should be aware that on the 1st of January 2016, new regulations will come into force that regulate the amounts that buyers pay upfront in the sale of off-plan properties, and which must be guaranteed by a financial institution or insurance company in the event that the property is not built within the period stipulated in the contract.

These amounts are now insured from the moment the building permit is obtained and not from the moment the contract is signed. Furthermore, the amounts insured are those paid from the effective date of the prepayment until the expected date of delivery of the property and, on the other hand, a period of expiry of the guarantee is set: two years from the breach of the developer of the guaranteed obligation without the latter having been requested by the buyer to terminate the contract and return the amounts paid.

So, ascertain the final price, including 10% VAT, the payment methods and the delivery date. Make sure that the developer has a bank guarantee or insurance that guarantees the amounts paid, plus interest if the property is not completed or is delayed, and ask for your individual guarantee. Each time you make a monetary payment, demand the corresponding receipt. In addition, the income must be paid into a special and separate account of the developer.

5º Before signing the title deeds do some checks. Before registering the property, check all the finishes and check that they comply with the information in the building specifications, and even check the communal areas. Also, check that there is an insurance policy that covers any damage that the property may have in the future. Remember that during the 72 hours prior to signing, you have the right to have a draft of the deed and ask the notary for clarifications.

Image by Renjith Krishnan (FreeDigitalPhotos.net)


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