Buying off-plan in Spain? You need a Building Licence

Raymundo LarraĆ­n Nesbitt, March, 20. 2018

This blog post explains the key importance a Building Licence has for a buyer.

Blog post copyrighted © 2018. Plagiarism will be criminally prosecuted.


By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
20th of March 2018

Today marks the start of springtime. This traditionally kickstarts the real estate season to buy property in Spain. Scores of Nordic, Swiss and German buyers will begin to assail estate agencies all over Spain in search of the perfect property.

A popular choice of late is buying offplan. Over the last year, dozens of new-builds have sprouted, particularly in the Estepona area. Whilst buying a new property has its advantages, it also has some major legal risks would-be buyers ought to be aware of.

In today’s post, I will comment on the recent change in 2015 to the bank guarantees law and how that can lead a buyer to lose all his money on buying offplan property.

Bank guarantees are a legal tool which act as a safety net on the deposits paid by a buyer should the developer file for bankruptcy or should the development not be completed.

The change in the law is that bank guarantees are only valid as from the time a developer attains a Building Licence from the town hall. Only as from this moment onwards are bank guarantees valid.

Many developers try to allay investor fears claiming they have an application for a Building Licence; well, that doesn’t suffice. Unless a developer has attained a Building Licence, all the money you have paid towards your new property is unsecured.

Should the developer go bankrupt or the development become stalled (for whatever reason) you will lose ALL your money. Even if you have been issued with bank guarantees rubber stamped by a bank, they are totally useless unless a Building Licence has been issued. More on this matter in our article: Law 20/2015: Important new bank-guarantee legislation explained for off-plan buyers.


This is one of many potential pitfalls offplan buyers can be faced with. Our law firm has over 15 years’ experience dealing in conveyance matters. Don’t risk your hard-earned money, speak to independent lawyers.



Larraín Nesbitt Lawyers, small on fees, big on service.

Larraín Nesbitt Lawyers is a law firm specialized in conveyancing, inheritance, taxation and litigation. We will be very pleased to discuss your matter with you. You can contact us by e-mail at, by telephone on (+34) 952 19 22 88 or by completing our contact form.


Legal services Larraín Nesbitt Lawyers can offer you


Conveyancing related articles

Bank Guarantees in Spain – 8th April 2013
Licence of First Occupation Explained – 8th April 2013
Buying Off-Plan Property in Spain – 8th of June 2013
Law 20/2015: Important new bank-guarantee legislation explained for off-plan buyers – 21st September 2015
Buying Property in Spain – 10 Reasons to Hire a Lawyer – 8th November 2016
Buying Property in Spain from a Private Seller (Resale Property) – 21st of February 2017
Buying Property in Spain from a Developer (Off-Plan Property) – 8th March 2017
How to inspect an off-plan property overseas – Q&A with The Sunday Times. July 2017

Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2.018 © Raymundo Larraín Nesbitt. All rights reserved.