What documentation legally safeguards an off-plan buyer's payments?

Off-plan buyers on the Costa del Sol are legally protected by specific documentation designed to safeguard their payments before the property is completed. Crucially, developers are required by law (Ley 20/2015, which replaced Ley 57/1968) to provide a bank guarantee or an insurance policy for all amounts paid by the buyer towards the purchase price, including any taxes. This guarantee or policy ensures that if the developer fails to complete the property on time, or if the project is not initiated, the buyer is entitled to a full refund of all amounts paid, plus legal interest. This document must explicitly state the secured amounts and the completion deadline. An independent lawyer will verify the existence and validity of this bank guarantee or insurance policy as a fundamental part of their due diligence before any payments are made. Furthermore, the private purchase contract itself should clearly detail the payment schedule, the property specifications, and the agreed completion date, along with penalty clauses for delays. It is also vital that the developer has obtained all necessary licenses, including the building license (licencia de obras), before sales commence. The 'cédula de habitabilidad' or 'licencia de primera ocupación' (first occupation license) is another critical document, issued by the local town hall, confirming that the property meets all legal requirements for habitation. Without this, the property cannot be legally occupied, and utilities may not be connected. Your lawyer will ensure these documents are in place or secured. Finally, all funds paid by the buyer must be deposited into a special, separate bank account, which is exclusively used for the development, further ensuring payment security.