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I have put down a deposit for an off-plan property. How can I determine the integrity of the developer before making any further payments?
Property Law
Antonio Flores Vila
29th of April 2003
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Q. I have paid a visa card deposit as a down payment for a property that is going to be completed July 2005. Before I inject an additional large sum of money into the project (30% of the total cost) can you advise me who to contact to find out the integrity of Santa Maria, who will own Las Vistas De Santa Maria based in Marbella?
Also, will I be able to sell this property before I need to take out the mortgage to complete the purchase of the property (July 2005).
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A. Santa María resort is well known in Marbella as they have been delivering properties for a number of years without any (known to me) problems. This obviously does not amount to a guarantee that they will continue to do so but it certainly is an indication of the soundness of the company.
In my knowledge the company provides bank guarantees to cover for the downpayments made prior to completion, which can be called upon should the developer fail to comply with their obligations. The sole fact that there are available bank guarantees, or an insurance policy, in compliance with the 1968 Protection of Downpayments on New Properties Act, is in my opinion tantamount to financial strength.
You will be able to sell prior to completion if the developer is happy with such arrangement, as not all developers allow resales to take place whilst they are still constructing, especially where they have not sold all of their own units. Therefore, if you intend to sell prior to completion you should make this point clear before committing yourself further by exchanging private purchase contracts.
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