How do I check a developer before buying in Spain?
Check the developer's track record by reviewing completed projects, searching for company registration, checking for past insolvencies, verifying their licence to build, and asking for references from previous buyers. Your lawyer will conduct formal legal due diligence.
- 1Research the developer's completed projects and delivery record
- 2Your lawyer checks company registration, licences and planning permissions
- 3Verify that a bank guarantee arrangement is in place for the project
- 4Search for any insolvency proceedings in public registers
- 5Ask the developer for references from buyers of previous completed projects
Key Takeaways
- Check the developer's portfolio of completed projects
- Legal due diligence by your lawyer covers company registration, licences and planning
- Bank guarantee confirmation is your financial protection
- Public company registers in Spain are searchable online
- A track record of completed and handed-over projects is the strongest indicator of reliability
Not all developers in Spain have the same level of credibility, experience or financial strength. Before reserving an off-plan property, you should carry out basic checks yourself and instruct your lawyer to complete formal legal due diligence. Key checks include reviewing the developer's portfolio of completed and delivered projects, verifying company registration in the Registro Mercantil, confirming that planning permission has been granted for the new development, checking that the developer has the required bank guarantee arrangement, and looking at their reputation in the market and among previous buyers.
Check their completed project portfolio
The most reliable indicator of a developer's credibility is a track record of completed and handed-over projects. Ask for a list of completed developments and, if possible, visit one or speak to owners. Established developers such as Aedas Homes, Neinor Homes, Metrovacesa, Kronos and Taylor Wimpey Espana have extensive completed portfolios across the Costa del Sol. Newer or smaller developers require closer scrutiny.
Verify company registration
All legitimate developers in Spain are registered companies. Your lawyer can check the Registro Mercantil (Companies Register) to verify the company exists, review its financial filings, and check for any insolvency proceedings. This takes a few days and costs very little. It can reveal whether the company has financial difficulties or has been subject to legal proceedings.
Confirm planning permission
A building licence (licencia de obras) must be in place or in the final stages of approval before a developer can legally take deposits in Spain. Your lawyer should verify that the planning licence has been granted by the local municipality. If the licence is not yet granted, the timeline risk for the project increases significantly.
Verify the bank guarantee arrangement
Before signing any contract or paying any money, confirm that a bank guarantee (aval bancario) arrangement is in place for the project. The developer should be able to provide confirmation from the bank or insurance company that will be issuing individual guarantees for each buyer. This is a legal requirement in Spain for off-plan sales.
Ask for references and check online
Ask the developer for references from buyers who have purchased in their previous developments. Search their company name and development names online for news articles, buyer forums and reviews. The Spanish property market has an active community of international buyers and information about problematic developers circulates widely.
Why This Matters in Costa del Sol
The Costa del Sol market includes established national developers with strong track records. However, the market also attracts newer operators. Due diligence matters here as much as in any market.
Common Mistakes to Avoid
A buyer researches a developer before reserving in a Benahavis project. Their lawyer confirms the building licence is granted, the company has no insolvency history, and a bank guarantee arrangement is in place with Sabadell bank. Two previous developments by the same company have been completed and handed over on time.
Legal Note: Your lawyer is responsible for the legal due diligence. You should not rely on the developer or their sales agents for legal verification of the developer's standing.
This answer is for general information only and does not constitute legal advice. Always consult a qualified Spanish property lawyer before making any purchase decisions.
Off-plan property refers to a residential or commercial property that is purchased before construction is complete. The buyer agrees to purchase based on architectural plans, CGIs, show apartments and a specification document rather than a completed building. Payment is typically made in stages tied to construction milestones.
The Private Purchase Contract (Contrato Privado de Compraventa or PPC) is the main legal agreement between a buyer and developer in an off-plan property transaction. It sets out all the terms of the sale including the purchase price, full payment schedule, completion date, property specification, bank guarantee obligations, penalties for delay, and dispute resolution. It is signed after the reservation stage and typically involves payment of 10% to 30% of the purchase price.
A bank guarantee (aval bancario) is a legal commitment from a Spanish bank to refund a buyer's stage payments if the developer fails to complete the property within the agreed timeframe or becomes insolvent. It is a mandatory legal requirement for all off-plan property purchases in Spain under Ley 57/1968 (updated 2015). Bank guarantees should be obtained for each stage payment individually.
Related Resources
Related Questions
Buyer Guides
Explore Properties
Ready to start?
All our clients are connected with trusted local solicitors.
Speak to a SpecialistLegal GuidesHelpful Links
Taking the Next Step?
All our clients are connected with trusted local solicitors.