How bank guarantees and building warranties work when you buy off-plan
Spanish law requires every payment you make before completion to be guaranteed and kept in a special account, and gives you ten years of structural cover after you move in. Here is what each protection covers and what to check.
By Investidad advisory team · Last reviewed 16 Oct 2026
Two protections, two phases
Buying Off-plan means paying for a home that does not yet exist. Spain's Building Act, the LOE, protects you in two phases: before completion, your money is guaranteed; after completion, the building is covered by liability periods and a compulsory ten-year insurance.
Every stage payment guaranteed
Money you pay before completion must be covered by an aval bancario or insurance and paid into a special account used only for the construction. If the home is not built or not finished on time, you are repaid with interest.
Ask for an individual certificate in your name for each payment. Your lawyer should check it before you pay.
- 10Structure · 10 yearsFoundations, beams, slabs and load-bearing walls, backed by the compulsory seguro decenal.
- 3Installations · 3 yearsDefects that affect habitability: waterproofing, plumbing, electrics, insulation.
- 1Finishes · 1 yearPaint, tiling, carpentry and fittings, claimed from the builder.
Liability periods under art. 17 of Ley 38/1999 (LOE), counted from the formal acceptance of the works. How guarantees and warranties work
Before completion: the aval bancario
A developer that takes money from buyers before a home is finished must guarantee its repayment, plus legal interest, in case construction does not start or is not completed on time. This is the Aval bancario: a joint and several bank guarantee, or a surety insurance policy from an authorised insurer. It must exist from the moment the building licence is granted.
Your payments must go into a special account, separate from the developer's other money and used only for the construction. The developer may draw on it for building costs, so the account alone is not your protection: the guarantee is.
- Ask for an individual certificate in your name for each payment, naming the bank or insurer. A general reference to a guarantee in the contract is not enough.
- Check the amounts: the certificate should cover everything you pay before the deed, including the reservation once it is paid to the developer.
- Pay only into the account named in the contract, never to an agent or another account.
- Act within the deadlines: if the developer does not refund within 30 days of your formal demand, you can claim from the insurer; a bank guarantee lapses two years after the breach unless you have claimed.
After completion: 1, 3 and 10 years
Article 17 of the LOE sets liability periods counted from the formal acceptance of the works:
- 1 year
- COVERSDefects in finishing work: paint, tiling, carpentry, fittings
- WHO IS LIABLEThe builder
- 3 years
- COVERSDefects in elements or installations that affect habitability: waterproofing, plumbing, electrics, insulation
- WHO IS LIABLEThe agents of the works (developer, builder, technical team)
- 10 years
- COVERSStructural defects that compromise strength and stability: foundations, beams, slabs, load-bearing walls
- WHO IS LIABLEThe agents, backed by the compulsory seguro decenal
| PERIOD | COVERS | WHO IS LIABLE |
|---|---|---|
| 1 year | Defects in finishing work: paint, tiling, carpentry, fittings | The builder |
| 3 years | Defects in elements or installations that affect habitability: waterproofing, plumbing, electrics, insulation | The agents of the works (developer, builder, technical team) |
| 10 years | Structural defects that compromise strength and stability: foundations, beams, slabs, load-bearing walls | The agents, backed by the compulsory seguro decenal |
Only the ten-year structural cover must be insured. The Seguro decenal has been compulsory for housing since May 2000, covers at least the full cost of the works and passes to each new owner. Claims for the one- and three-year periods are made against the developer and builder.
Use the time well: inspect the home before completion (Snagging) and put any defects in writing; report later defects promptly and in writing within the relevant period.
What this means compared with a resale home
A resale home has no developer guarantee and, after ten years, no structural insurance. Hidden defects can only be claimed from the seller within six months of delivery under the Civil Code, and only if they were hidden and serious. See new build vs resale for the full comparison.
Questions buyers ask
- Is the bank guarantee automatic?
- The developer is obliged to provide it, but you must receive an individual certificate. Your lawyer should check it before you pay anything beyond the reservation.
- Does the guarantee cover a delay?
- It covers repayment if construction does not start or is not completed within the agreed time. Whether you can cancel for a delay, and from when, depends on the contract; your lawyer should check the delivery clause.
- Does the ten-year insurance cover a leaking terrace?
- Usually not: waterproofing affects habitability and falls under the three-year period, claimed from the developer and builder. The ten-year insurance covers structural defects.
