IMPORTANT: New Regulations affecting off-plan property buyers in Spain

THE QUESTION

 Is it safe to buy off-plan property in Spain after 1st January 2016?

Background

In the recent past, one of the most important elements of the huge property bubble consisted in all the new complexes, urbanizations and buildings of apartments which were sold off-plans by the developers to individual buyers.

Normally, the buyer paid a certain amount of money in advance to the developers in accordance to the different stages of the construction which were certified by the Architect. Those payments were made before the house/apartment was completed and the corresponding licenses obtained.

In many cases, the first payment was made when the developer did not even have the building license and there was only a plot waiting for building permission. This was particularly a common practice when the developer was a cooperative and used the money coming from different buyers to buy the land to be constructed.