Hard times for off plan Spanish property buyers

It's a problem that will fade away some time soon, but meantime, buyers of off-plan property in Spain may find it hard to get back the deposits they handed over to developers who are now in dire financial straits - or bust.

The Spanish Law that ensures developers take out a bank or insurance guarantee for the deposits they hold while building the apartment or villa is clear enough, as 1,000s of property lawyers in Spain and the UK will attest.

Property not finished within 90 days of contracted date or not finished at all, means the buyer can claim back all staged deposits paid and a generous six percent interest on top. The buyer gets an impressive looking guarantee from the big name bank once the developer has paid the premium he is legally required to do.

It's a nifty piece of consumer protection missing in the UK and countless other countries within and without the EU. Read about Law 57/68 reinforced by Decree 515/89 in this Buyers' Guide.

But as the Spanish property market - littered with ceased sites and deceased developers - continues to sink, British and other foreign buyers are pulling out as they find contracts being breached. Those who have guarantees are having a hard time getting their money back but many are finding that they didn't have a guarantee after all?

The Bank of Spain confirmed it has received a record number of complaints and is investigating the issue and expects to issue a report next month.

Current would-be buyers are advised to buy only key ready or resale homes in Spain and only through a reliable source and using an independent Spanish solicitor like www.spanishlaw.org.uk/ who are based in London - handy for kicking butt, when butt needs to be kicked.

With so many key ready homes around it could be three years before there is a need for any-one to buy off plan property in Spain...