Off-plan deposit protections in Spain — the buyer’s safety net

If the promoter enters insolvency or liquidation before delivery, you call on the individual guarantee issued under Law 38/1999. The bank or insurer must refund all sums you have paid into the special account, plus legal interest from the date of each payment. Your lawyer typically sends a burofax notifying resolution of the contract and demanding payment from the guarantor within the statutory window. Because the guarantee is a separate obligation of the bank or insurer, the promoter's insolvency does not affect your right to recover. This is precisely the scenario the 2015 reform was designed to cover. Specialist legal advice is essential to execute the guarantee correctly.

No. A clause in the contrato privado de compraventa stating that deposits are protected has no independent legal effect if no actual guarantee instrument has been issued. The law requires an individual certificate of bank guarantee (aval bancario) or insurance bond (seguro de caución) on the guarantor's letterhead, naming you as beneficiary, identifying the specific dwelling, and citing Law 38/1999 as amended by Law 20/2015. Without that physical document, you have a contractual promise but not the statutory protection. Insist on receiving the certificate at or before the first stage payment, and verify it directly with the issuing institution.

Both instruments satisfy the same legal obligation and produce the same economic outcome for the buyer. An aval bancario is issued by a Spanish bank, which undertakes to repay your deposits plus legal interest if the promoter fails to deliver. A seguro de caución is issued by an insurance company under a bond, with identical triggers and payout terms. From a buyer's perspective the practical difference is the solvency and reputation of the guarantor. Both are accepted by Spanish courts and the Land Registry. Read the certificate carefully in either case, and verify issuance directly with the institution rather than relying on the promoter.

Strictly speaking, Law 20/2015 protections attach from the moment any sum is paid towards an off-plan dwelling, which includes reservation deposits. In practice, however, many promoters do not issue an individual guarantee for the small reservation amount, treating it as a pre-contractual payment. To protect yourself, the contrato de reserva should state that the deposit is refundable if due diligence reveals title, licensing or guarantee defects, and that no further payments will be due until an individual certificate is delivered. Keeping the reservation modest, typically €6,000 to €15,000 on Costa del Sol units, limits exposure during the verification window.

Three steps. First, contact the issuing bank or insurer directly using contact details you obtain independently, not from the promoter. Quote the certificate reference and ask them to confirm issuance, validity and the secured amount. Second, ask your abogado to inspect any póliza colectiva or master policy and verify your individual certificate is registered against it. Third, confirm that the special account number named in the certificate matches the account into which you will wire funds, because payments into any other account fall outside the guarantee. Each new stage payment should be reflected in an updated or supplementary certificate covering the increased total.

The Licencia de Primera Ocupación is the municipal first occupation licence confirming the completed building matches the approved project and is fit for habitation. Without it, the property cannot legally be occupied or connected to utility supplies. For off-plan deposit protection purposes, its absence on the agreed delivery date is treated as failure to deliver, even if the keys are physically available. This entitles the buyer to resolve the contract and call the guarantee for refund of all sums paid plus legal interest. Always require the licence as a condition precedent to signing the escritura and paying the balance.

It depends on the nature of the defects. Substantial defects that render the property unfit for its intended use, or that depart materially from the agreed specifications and plans, can justify resolution of the contract and execution of the guarantee. Minor cosmetic snags do not. The distinction is fact-specific and often contested, so document everything with photographs, a written snagging list, and ideally an independent surveyor's report before refusing completion. Your lawyer will advise whether the defects meet the legal threshold. In borderline cases, completing under written reservation of rights may preserve remedies without forfeiting the purchase.

Under Law 38/1999 as amended, the guarantee covers all sums paid on account plus interest at the legal rate (interés legal del dinero), calculated from the date of each individual payment until refund. The legal rate is set annually in the Spanish state budget and is generally lower than commercial rates but meaningful over the multi-year span of an off-plan project. The certificate should expressly state that interest is covered. If a guarantor disputes interest, Spanish case law on Law 20/2015 has consistently confirmed the buyer's entitlement. Litigation may add procedural interest and costs, depending on the outcome.

The guarantee remains in force until the protected event occurs, which is delivery of the property with a valid Licencia de Primera Ocupación and signature of the escritura pública. At that point ownership transfers, the buyer takes possession, and the guarantee is cancelled because its purpose has been fulfilled. If delivery is delayed beyond the contractual date, the guarantee continues to cover the buyer's deposits until either delivery occurs or the buyer resolves the contract and claims a refund. Never accept a certificate with a fixed expiry date earlier than the agreed delivery date, and verify the expiry clause carefully before paying.