A few days ago, I placed a question on LinkedIn regarding electricity supply. When Survey Spain’s Home Inspectors check/snag ‘completed’ off plan properties, they often find that the electricity has not yet been connected as the supplier can only do so once requested from the actual owner of the property, which only happens after signing at the notary and full payment for the property.
There has been recent publicity regarding a general shortage of electricity capacity on Costa del Sol enabling it to keep up with the speed of new construction. I asked the question on whether the developer could demand full payment if they knew that they could not provide electricity to the building on that date. I have received a reply from Maria Luisa de Castro of Costaluz Lawyers, a respected lawyer who specialises in such matters and below is a copy of her reply.
“A developer can set a completion date and apply pressure, but they can’t genuinely force you to sign at the Notary if the property is not contractually ready for handover. If the developer already knows there is a real electricity supply issue (for example, the supply cannot be contracted in the buyer’s name, the development is not energised, or the legal/technical requirements are not in place), that can justify postponing completion or insisting on protective wording. In practice, the sensible route is to get the situation in writing (what the issue is, who is responsible, and when it will be resolved) and then either delay completion or sign only with safeguards. Preventive, I would recommend inserting a clause requiring a pre-contracting mechanism for utilities (so the buyer can contract supply immediately on completion) and an express right to retain an agreed amount at the Notary as a guarantee. It’s a clean, fair solution: it protects the buyer, incentivises the developer to deliver properly, and avoids last-minute disputes at the worst possible time. Preventive Law saves thousands!”
So now you know, but until developers accept such clauses in their contracts, there are likely to be ‘discussions’ on this matter, ideally before payment and not when the buyer is later informed by the electricity company that it could be many weeks before a connection can be made.
