Before buying a house off the plan

It is trickier to examine the physical and legal situation of the home you want to buy if the home only exists on paper, in other words, if the house in question has not been built yet. In that case, the only description you can get will be from the plans the real estate developer will show you, and the home will only exist if the construction company fulfils its obligation to build according to the plans that formed the basis for your agreement.

 

If  you are buying a home that is still in the planning stage, do not sign any agreements or hand over any money until you have checked all these following things:

 

Be sure the people whom you are signing with have the legal power to do so. These would be the promoter and the person who is going to sign on the promoter’s behalf. You can check this out at the Mercantile Registry, where the company ought to be registered. You can go to any Mercantile Registry office.

 

Be sure the land they are going to build on is registered to the developer company you are doing business with. They should be the owner of the land. Check this information as explained before, at the Property Registry.

 

Be sure the planned building has been authorised by the city government through the correct licensing procedure. You can check this at the Property Registry, because if the description of the future building is registered, that means the Registrar has seen evidence that the license exists and work has begun in accordance with the approved design. If the building’s description has not been registered yet, go to City Hall to find out whether the land in question can be built on.


If you are required to sign a private agreement and pay a sum of money on account before the building is constructed, bear these things in mind:

 

If the agreement contains any abusive clauses, those clauses will be considered nonexistent, even if you have signed them. They will be considered null. These include clauses allowing the promoter to change the design after signing and without your consent, clauses saying you have waived your right to  choose a notary, and clauses obliging you to sign into a mortgage loan the promoter has taken or obliging you to sign up for accessory services.

 

If you give the promoter any money, you can demand proof that the money has been deposited in a special account that can only be drawn on for the construction project, plus proof that there is an insurance policy or bond ensuring that you will get your money back plus six percent, if the building is never constructed or delivery is delayed.

 

Once construction has finished and before you sign the deed of purchase, demand proof from the seller that the construction has been finished in accordance with the description given in the plans. Don’t forget that there is an insurance policy covering all damages to you (the buyer) as a result of defective construction, so you must also receive proof of it before signing.  You can check this out at the Property Registry; if there is an entry stating that construction has ended, that means the Registrar has seen proof of the existence of a certificate of works conclusion pursuant to the approved design and an insurance policy. Therefore, before you sign the deed, make sure that the Property Registry has an entry stating that the construction work has been concluded.