Where buyers get caught out
Some buyers pay deposits directly to the developer without an individual guarantee in their name. If the project stops or is delayed, recovering that money becomes much harder. Guarantees must be issued for each payment and the money paid into a special account.
Before you sign
| Check | Why it matters |
|---|---|
| Developer | Company, track record and financial position |
| Plot and licence | Ownership of the land and a valid building licence |
| Guarantees | Bank guarantee or insurance for every payment |
| Contract | Specifications, deadlines, penalties, termination rights |
| Division and community | Your unit, parking, storage and community rules |
| Rental use | Whether holiday rental will be legally possible |
Protecting your payments
Developers of residential property must guarantee amounts paid on account until delivery, with a bank guarantee or insurance and a special account. We check that each guarantee covers your payments plus legal interest and is issued before you pay.
Negotiating the contract
Developer contracts tend to give the developer flexible dates and limited penalties. We negotiate a firm delivery date, your right to terminate and recover your money if it is missed, the specifications, and the conditions for any changes. For newly built villas on rustic land, we also check that the licence covers everything that is being built.
Delivery and completion
Before completion we check the licence of first occupation, the habitability certificate, the ten-year structural insurance and the registration of the building, and we coordinate the snagging inspection so that defects are recorded before you sign. Then we handle the notary, VAT and stamp duty and the registration. See purchase costs and taxes in Ibiza.
Delays and defects
If the developer misses the delivery date, you may be entitled to terminate and recover your payments under the guarantee. After delivery, builders and developers are liable for defects for different periods. See property disputes in Ibiza. Ibiza.law is part of Castell.law.
An illustrative example
Based on situations we commonly see; not a specific client. A family reserved an off-plan villa in Sant Josep and the developer asked for 30% of the price in stages. Before the first payment we found that no individual bank guarantee had been issued. We required the guarantee and the special account as a condition of the contract. Two years later the project was delayed beyond the agreed date, and the family could choose between waiting or recovering their payments under the guarantee with interest.
Before you sign or pay, ask a lawyer
Send us the document, the listing or a short summary of the problem. A lawyer will tell you what matters, what it could cost you and what to do next.
Questions about buying off-plan in Ibiza
Is my deposit safe when buying off-plan in Ibiza?
It should be, if every payment is covered by a bank guarantee or insurance in your name and paid into the special account.
Can I negotiate the developer's contract?
Yes. Developers often accept changes on deadlines, penalties, specifications and termination rights.
What taxes apply to a new build?
VAT on the price and stamp duty on the deed, instead of the transfer tax on resale property.
What if delivery is late?
Depending on the contract and the delay, you may be able to terminate and recover your payments with interest.