Off-plan abroad: contracts, escrow and delays by country

Buying off-plan means paying for a home that does not exist yet. The price is often lower and the payment plan gentler than for a finished flat, and the risk is that the project is late, changed or never finished. Whether you are protected depends mostly on the country's rules and on the contract you sign. This article explains the common mechanics and gives a snapshot of eight markets. It is general information; each country's rules change and need checking with a local lawyer.

How an off-plan purchase works

The structure is similar almost everywhere.

• Reservation. A small deposit takes the unit off the market for a short period. Ask whether it is refundable and under what conditions.
• Main contract. A sale or preliminary contract sets out the unit, price, payment stages, specification, completion date, penalty for delay and what happens if you or the developer withdraw. This is the document that protects you, so read it before you pay more than a reservation.
• Payment stages. Instalments are linked to dates or to construction milestones. A schedule tied to verified milestones is safer than one tied only to calendar dates.
• Completion and handover. The building is finished, an occupancy or completion certificate is issued, you inspect the unit and list defects, and title is transferred and registered.
• After handover. A defects period applies, and in many countries a developer's liability for structural defects runs for years.

Money protection: guarantee or escrow

The most important question is where your money sits. There are three common models: a bank guarantee or insurance for advances, a regulated escrow account that releases funds against progress, or no statutory protection at all and only the developer's reputation. The first two shift the risk from you to a bank or insurer or a supervised account. Always pay only into the account named in the contract, in the name of the developer or the escrow, never to an agent or a private account. For developer checks see how to verify a developer abroad.

Completion dates and remedies

• A completion date should be written down, with a defined grace period and a delay penalty or right to terminate. Vague wording such as "approximately" removes your remedies.
• Check what counts as completion: the shell, or a building with an occupancy certificate and utilities connected.
• Check what happens if the developer becomes insolvent: whether a guarantee, an escrow or a registered priority over the unit protects you.
• Keep records: notices of delay, correspondence and proof of payment.

Country snapshot

Spain. Advances paid on housing under construction have to be secured by law. The regime now sits in the First Additional Provision of Law 38/1999 (as amended in 2015), which replaced Law 57/1968: the developer must cover amounts received through a bank guarantee or surety insurance and place the advances in a special bank account. In practice you should receive the guarantee document with the contract and check that it names you. See the Spanish construction law on BOE. Our Spain new build vs resale article compares the paths.

Portugal. The purchase typically starts with a preliminary contract (contrato-promessa) with a deposit (sinal). Under the general law, if the seller withdraws after taking a deposit, they owe it back in double, but this is only a general remedy. For real effect against third parties the preliminary contract should be formalised and registered. We did not confirm whether a statutory guarantee on advances for off-plan housing applies, so ask the lawyer explicitly.

Greece. A preliminary agreement is signed with a deposit, and the project should have a building permit issued through the national e-adeies platform. The final contract is signed before a notary and registered. We did not find a statutory escrow for advances, so the lawyer's checks on permit, title and encumbrances carry the protection.

Cyprus. The contract of sale should be deposited at the Land Registry within a short statutory period; doing so gives the buyer specific-performance protection against the developer re-selling or mortgaging the unit. Developer resale contracts may contain a retention clause until the title deed is issued. Title deed delays are a known issue, so ask how and when the developer will deliver the deed.

Bulgaria. The usual sequence is a reservation, a preliminary contract under the Obligations and Contracts Act, and a notarial deed after the occupancy permit (Act 16). We did not find a statutory duty for developers to give a bank guarantee, so protection is mostly contractual, and a notarised or secured arrangement should be negotiated.

Turkey. Prepaid residential sales are regulated by the consumer law. As reported by a law-firm summary, for larger projects (30 or more units) the seller must offer a guarantee such as completion insurance or a bank letter, the buyer has a short withdrawal period and a termination right within 24 months, and delivery cannot exceed 48 months from signing. We could not confirm how these rules apply in every case to foreign buyers, so verify with a Turkish lawyer; the agreement should be registered with the land registry.

United Arab Emirates. In Dubai, Law No. 8 of 2007 requires off-plan sales to run through a project-specific escrow account at an approved bank, with withdrawals tied to supervised construction progress, and the regulator can step in or reallocate the project if the developer fails. See Dubai off-plan investment risks, the off-plan purchase checklist and off-plan vs ready. Escrow reduces risk but does not remove delay or quality risk.

Thailand. Off-plan condominiums are common, but foreign buyers need a compliant structure. See buying off-plan in Thailand: developer checks and payments.

Checklist

• Written guarantee or escrow details, and the account name for every payment.
• Building permit, title to the land and encumbrances checked by an independent lawyer.
• Payment schedule tied to verified milestones.
• Completion date, grace period, delay penalty and termination right in the contract.
• Specification, materials and layout attached to the contract.
• Registration of your contract or a priority notice, where the country allows it.
• Currency, transfer costs and taxes, see total cost of ownership.
• A plan for a delay of a year or more.

FAQ

Is off-plan cheaper than a finished home? Often the entry price is lower and payments are spread, but you carry delay, quality and developer risk. Compare it with ready property for your purpose.

Can I get my money back if the project is not finished? It depends on the country and the contract: a guarantee, an escrow or a termination right can help, and in some countries there is no statutory protection. Ask for the exact mechanism in writing.

Does an escrow account guarantee completion? No. It controls how funds are released, but delays and defects remain possible.

Should I pay a reservation before reading the contract? Only a small, clearly refundable amount, and only after you have seen the draft contract.

What happens if the developer is late? The remedy is whatever the contract and the local law say: a penalty, extension, termination and refund. Without a written deadline you have little to claim.

How we help

We are a trilingual platform (Russian, Polish, English) that finds properties and coordinates independent local lawyers and tax advisers. For off-plan that means shortlisting projects, requesting the contract and guarantee documents and putting you in touch with a local lawyer before you pay. This text is informational and is not legal, tax or investment advice; rules change, so verify the current regulations before acting.