Buying property under construction – what to watch out for
🏗️ Basic Information
Buying property under construction or off-plan means the buyer purchases an apartment, house, or villa based on a project, visualizations, and plan—not a finished building. This type of investment is common and safe if the correct legal steps are followed, but it requires careful checking of the developer, documents, and contract.
Advantages: lower prices (20–30 % less), interest-free installment plans, and higher return after completion.
Risks: delays, project changes, or a developer without sufficient guarantees.
1️⃣ Main Advantages of Buying Off-Plan
✅ Lower price than finished projects – often 20–30 % cheaper initially.
✅ Interest-free payments during construction (developer financing).
✅ High potential for value growth – prices usually rise 20 %+ after completion.
✅ Option to choose interior (tiles, kitchen, colors).
✅ New warranty – 1–2 years for fittings, 10 years for structure.
2️⃣ Risks to Watch
⚠️ Project does not yet have a building permit – developer is still processing it.
⚠️ Developer lacks sufficient funding – project may be delayed.
⚠️ Contract does not include construction timelines or penalties for delays.
⚠️ Lack of title information – unsettled land or missing separate titles.
⚠️ Poor communication after signing – some developers do not send regular progress reports.
3️⃣ Key Points for Lawyer Check (Due Diligence)
An independent lawyer should check:
| Area | Checked |
|---|---|
| Building permit | Issued or in approval process |
| Town planning | Valid and in line with city plan |
| Land ownership | Developer owns or rents the land |
| Developer financing | Project is not mortgaged to a bank |
| Construction stage | Construction started and by whom |
| Separate titles | Estimated date of individual titles |
| Completion deadlines | Clearly stated in contract (e.g., 24 months + 3-month tolerance) |
💡 If any of these points are missing, it is recommended to delay signing until the developer provides the missing permits.
4️⃣ Contract Contents for Off-Plan Projects
The contract must be precise, detailed, and protect the buyer. Key clauses:
- Construction and handover dates
- Penalties/compensation for delays
- Payment plan tied to milestones (foundation, structure, finishing…)
- Developer guarantees (bank guarantee, escrow account, retention clause)
- Option to transfer the contract (assignment) – if the buyer wants to sell before completion
- Technical specification and attachments (floor plan, materials list, photos)
- Clause for registration at Land Office – within 60 days
5️⃣ Payment Plan (Developer Financing)
Typical model:
| Stage | % of price |
|---|---|
| Reservation fee | 2,000–5,000 € |
| Signing contract | 25–35 % |
| Foundation / skeleton | 20–25 % |
| Structure completed | 20 % |
| Interior works | 10 % |
| Handover / Title Deed | 5–10 % |
💡 Most developers offer interest-free payments during construction, with the final payment due after completion.
6️⃣ Handover and Quality Check (Snagging)
Before final handover: a lawyer or technician checks if the property matches the plan and inspects quality. A “snagging list” (list of defects) is made, which the developer must fix within a set period (e.g., 30 days).
The buyer signs the handover report only after defects are corrected.
7️⃣ Insurance and Warranties
- Developers must have construction insurance during building.
- Buyer should take property insurance after getting the keys.
- Standard warranties: 12–24 months for fittings, 10 years for structure and statics.
8️⃣ Timeframe
- Small projects (villas): 12–18 months
- Apartment complexes: 18–30 months
- Hotels and resorts: 24–36 months
💡 Always allow a 3–6 month buffer for unexpected delays.
9️⃣ Most Common Buyer Mistakes
❌ Signing the contract before checking the building permit
❌ Paying the developer directly without an escrow account
❌ Contract has no delay penalties
❌ Not asking for regular photos or progress reports
❌ Ignoring technical attachments (materials, fittings)
