Is the Spanish property market safe for foreign buyers? Although the Spanish housing market has become more professional since the property bubble, it still lacks strict regulation for estate agents and property developers. Without mandatory certification, anyone can call themselves an estate agent, and property developers sometimes still neglect legal obligations such as bank guarantees. Therefore, a safe purchase always requires independent legal advice and a thorough due diligence.
Also listen to our podcast episode on the cowboys in the Spanish property market via Youtube, Spotify or Apple Podcasts.
1. Risks in project developers: Bank guarantees and financing
Market access for property developers has tightened in recent years, but this does not fully guarantee buyers. Banks apply stricter criteria and require a proven track-record before they provide funding. As a result, absolute amateurs are filtered out of the market faster than a decade ago.
However, the biggest risk for buyers on plan remains: the absence of the legally required bank guarantee (Aval Bancario).
What to watch out for:
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Financial stability: Small promoters find it harder to find partners, which can lead to delays or bankruptcies during construction.
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The Bank Guarantee: Never accept a purchase on plan without an individual bank guarantee covering your down payments. This is your only safety net if the developer goes bankrupt.
2. The Spanish estate agent: an unregulated profession
Unlike Belgium, where the real estate agency profession is strictly regulated (IPI), the Spanish brokerage completely free in most regions. There are hardly any barriers to entering the profession; start-up costs are low and diploma requirements are often lacking.
The fundamental problem lies in legal liability. The Spanish estate agent's job stops the moment there is a agreement is between buyer and seller.
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Limited responsibility: The broker is not responsible for the legal correctness of the property, nor for the outcome of the transaction after signing the contract.
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Focus on sales: Because their commission depends on the deal, and not on the quality of the file, the quick sale often takes precedence over the safety of the buyer.
Expert Quote: "The term 'cowboys' is unfortunately still around. We regularly see freelancers or unregistered estate agents pressurising buyers to sign quickly, without checking the urban planning situation."
3. Why the Spanish notary does not protect you sufficiently
A common mistake among Belgian and Dutch buyers is the assumption that the Spanish notary has the same protective role as at home. This is factually incorrect.
The Spanish notary (Notario) has an administrative and fiscal role: he identifies parties and ensures entry in the register. However, he conducts no substantive checks out to:
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The structural condition of the property.
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Urban planning violations (illegal extensions).
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Outstanding debts not immediately apparent from the register.
Blind reliance on the notary without prior checking by one's own lawyer is the root cause of post-purchase legal problems.
Read more about the duties of the Spanish notary.
4. Roadmap: how to buy property in Spain safely
To avoid malpractices and legal pitfalls, strict separation of interests is necessary. Follow these guidelines for a safe transaction:
Choose established brokerage firms
Avoid sole traders or freelancers who are just starting out.
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Look at offices that multiple years and have a permanent salaried team.
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Permanent employees tend to be more focused on long-term relationships than freelancers working on quick commissions.
Demand independent legal advice
The most important advice is to engage your own, independent lawyer or jurist.
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Reject the 'in-house' lawyer: Many brokers suggest a lawyer affiliated to them. There is a direct conflict of interest here. Whose interests does this lawyer represent: yours or those of the broker who provides him with work?
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Legal checks: Your own lawyer controls the property (Note Simple), permits and contracts before you sign or pay.
Read more about buying safely in Spain.
Frequently asked questions (FAQ)
1. Is a property agent in Spain required to be certified? No, in most Spanish regions the profession is not protected. Anyone can call themselves a real estate agent without specific training or certification. Some regions (such as Catalonia and Valencia) have recently introduced registers (such as RAICV), but control remains limited.
2. What exactly does a Spanish notary do when buying? The Spanish notary verifies the identity of the buyers and sellers and arranges the official transfer of ownership through the notarial deed (Escritura). However, he does not conduct a thorough investigation into the condition of the property, illegal renovations or hidden defects. That is the job of your lawyer.
3. Will I lose my money if a Spanish property developer goes bankrupt? Without a bank guarantee, you do indeed run that risk. Under Spanish law (LOE), a developer is obliged to provide a bank guarantee (Aval Bancario) to issue for your advances. If you have this guarantee, the bank will refund your money in case of bankruptcy. Without this document, you are often an ordinary creditor.
4. Why do I need a lawyer if there is already an estate agent? The broker works for the seller (or his own commission) and is not liable for legal defects. An independent lawyer works exclusively for you and conducts the necessary due diligence out to ensure you buy a legal and debt-free home.
About the author: Glenn Janssens is a lawyer specialising in Spanish real estate transactions and tax regulations. Since 2017, he has been helping Belgian and Dutch individuals and entrepreneurs to safely purchase and structure real estate in Spain. He guides files from A to Z: from due diligence, ownership and tax control to estate planning and optimisation for residents and non-residents. Thanks to his years of experience, hundreds of handled files and focus on transparent communication, Glenn makes complex Spanish legislation understandable and practically applicable for every property buyer.
