Question 1: Why Invest in Spain?

Answer: For the weather, obviously. But also because it is easy to get to, thanks to the variety of low-cost airlines offering cheap and frequent flights. And because it is cheap compared to Britain: council tax rates are roughly a tenth of those in the UK and petrol prices are a third cheaper. As a result, Spain is by far the most popular destination for British investors: more than 750,000 own a home in the sun, and around 160,000 Brits have settled there permanently. And not all of these are pensioners looking to enjoy their retirement there. A recent ICM survey for BBC2 found that it is where 24% of 18-24-year-olds would most like to make a new life.

Question 2: How has Spanish Investment performed?

Answer: The persistent influx of Brits has induced a boom that has seen prices rising for the last few years – they were up an impressive 17.4% in 2004 alone. The Spanish property market attracts around £12bn a year from British investors (equivalent to almost 1.5% of Spanish GDP), and it’s predicted to rise to £21bn annually by 2009. But this isn’t a new fad: Britons have been investing in Spain since the cheap package-holiday boom of the 1960s and 1970s, when holidaymakers returned to snap up cheap coastal villas. Emma Thelwell (MoneyWeek)

Question 3: Why buy Off-plan?

Answer: Waiting up to 24 months for a lovely new home on a sparkling hillside, beachside or golfing urbanisation has the obvious benefit for the investor of buying at today's prices, benefiting directly from the ensuing property growth of 17.4% a year in Spain. For investors it means an immediate dramatic improvement in Return on Investment as they are “earning” within days of paying a reservation deposit to buy their property of choice.

Question 4: What do I need to look out for when buying a property?

Answer: Spain's real estate stability and growth have been well recorded by Governmental and European agencies and that is encouraging many more people to buy offplan direct from developers and specialists like SJS. However, there are no proper safeguards until the developer gains legally required permissions which enable them to obtain fiscal guarantees from a bank or insurance company to offer to buyers. Until that time any funds invested by overseas buyers as a reservation fee and/or deposit are at risk. SJS ask an independent Spanish solicitor to audit all the relevant paperwork and permissions before promoting any development. This ensures maximum protection for our investors.

Question 5: Do I need to do my own research?

Answer: Absolutely! We at SJS encourage all our investor clients to research their development of choice. Any solicitor acting on your behalf should audit all the relevant paperwork and permissions of the developer, combined with Town Hall and Property Registry checks.

Question 6: Can you be more specific?

Answer: There are five necessary items that any buyer needs assurance on when purchasing in Spain, which is why a Spanish lawyer is recommended over one based in UK; (a) Status of developer? It is important to have solid information on the developer/promoter to whom you are going to hand over a great deal of your hard-earned money. Your appointed lawyer should make checks into the current position of the developer in a corporate and construction sense, then, at least, the independent Spanish solicitor will take a position on an “informed” basis. (b) Who actually owns the land? As in the UK you do not have to own the land to make a planning application for it and there is a custom in Spain for the developer to have a private agreement (option) to buy land from the registered owner and in the meantime will attempt to obtain a worthwhile planning consent on it. The Land Registry will sometimes not show the developer's name, but as the private contract to acquire the land has probably been seen and signed by a notary (notarised) your solicitor should take a view on this. (c) Planning permission granted? Sounds obvious, but there have been a few horror stories in the UK media. Your solicitor should looks carefully at all aspects of planning for the specified development and what's going on around it. There are hilltop developments in Costa del Sol in limbo because the planning laws were transgressed and three tower blocks in Costa Calida abandoned because there is no available water for them. In La Marina, Costa Blanca and Marbella, Costa del Sol newly built homes could be ordered to be demolished by the planners as they broke the planning rules. (d) Where's the building licence? Having the necessary licences (Licencia de Obra) from the Town Hall to build what the developer is telling you he is planning to build is vital. Does the orientation and property specification tally? Ask your solicitor to ensure the specification (memoria de calidades), completion and first occupation certification is concerned. (e) Legal guarantee of completion? Off-plan buyers are handing over large sums in deposits and stage payments and Spanish consumer law protects this (Law 57/68 reinforced by Decree 5151/89) situation and calls for the builder/developer to provide a special guarantee for the return of any money paid over in the event he goes bust or otherwise fails to complete the property. Ensure that , the Spanish solicitor you choose sees this Certificado de Guarantia which guarantees return of monies paid plus 6% interest. No guarantee, no Legal Surety. It is a criminal offence not to offer one. The law, however, does not say who should pay for the guarantee which can be a bond the builder has deposited (aval bancario) or an insurance policy (garantia de seguro) and sometimes the buyer is asked to pay, so do check.

Question 7: What happens if the build quality of my property is poor?

Answer: Firstly, we at SJS wouldn’t promote any products from substandard developers, but it is reassuring to know that your newbuild purchase is covered for defects by the Spanish Building Standards Act for 10 years and the builder's insurance cover for this is notarised with the sale.