Purchasing off-plan property in Spain. What legal protections does a buyer have today on the Costa del Sol?

The primary market (off-plan) is currently one of the most popular models for investing in real estate in Spain, especially in the Marbella and Estepona regions. At the same time, it is a segment around which many simplifications and conflicting information have arisen, particularly regarding legal issues.

Over more than 15 years of working in the real estate industry on the Costa del Sol, I have had the opportunity not only to represent investors but also to work directly on the sale of large development projects. By participating in operational and contractual processes from the inside, I saw how contracts are actually constructed in practice and where their flexibility realistically ends. This experience allows me today to show you the primary market without a filter from the perspective of everyday practice, not just theory.

Payment protection: the foundation of the off-plan system in Spain

Watch the off-plan project in Benahavis.

One of the most important mechanisms for protecting the buyer is securing the funds paid before handing over the property for use. In the Spanish legal system, every payment made during the construction phase should be covered by:

• A bank guarantee (Aval Bancario) or
• An insurance policy (Seguro de Caución).

The purpose of these instruments is to protect the buyer in case the developer fails to complete the investment on time. However, as an expert with many years of experience, I emphasize: it is crucial to verify whether the guarantee has been correctly issued to the specific buyer and whether it covers the full amount of payments including VAT (IVA).

Private contract and the moment of acquiring ownership rights

After paying the reservation fee, the next step is signing the private contract (Contrato Privado de Compraventa). This is the moment when the buyer obtains contractual rights. However, it is worth remembering the chronology of the purchase process in Spain:

1.  Reservation payment: initiates formalities and removes the offer from the market.

2.  Private contract: grants rights arising from the contract but does not yet make you the owner in the land register.

3.  Notarial deed (Escritura): only at the moment of signing the deed and registration in the property register (Registro de la Propiedad) do you become the full legal owner of the property.

Off-plan project in Estepona with a sea view.

Resale before the deed: assignment of rights. What does it look like in practice?

I often encounter the question: “Can I resell the apartment while it is still under construction?” Many myths circulate among agents on the Costa del Sol about this topic. The truth is that as long as there is no notarial deed, you are not selling the property but performing a assignment of contractual rights.

From my experience working on development projects, it follows that:

• The possibility of assignment does not automatically arise from Spanish law.
• It is not a market standard; moreover, the vast majority of large developers on the Costa del Sol do not allow assignment clauses in their standard contract templates.
• The absence of an appropriate clause in the private contract practically closes the way to transfer rights to a third party before the completion of construction.

Interesting off-plan project in Riviera del Sol.

Legality of the investment and occupancy permit (LPO)

The final but critical element of protection is verifying the legality of the investment. The developer must have a building license (Licencia de Obra) and, after completion, obtain the occupancy permit (Licencia de Primera Ocupación – LPO). Without the LPO, the property cannot be legally inhabited or rented out as a holiday rental, which is crucial for investors in southern Spain.

Summary: knowledge is your best protection

Purchasing an off-plan property on the Costa del Sol is based on solid legal mechanisms but requires vigilance. The best-protected buyer is one who understands the process and knows which issues are negotiable and which arise from rigid development procedures.

If you plan such an investment, trust a team that has been local and knows this market inside out for 15 years. Do you have questions about a specific off-plan investment? Contact us.

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