new buildWhen developing property on the Costa del Sol, the best quote is not necessarily the cheapest.

A client coming into our offices with a fistful of quotations from contractors to build his new home will often look to the big three firms that, as a rule, anyone thinking of constructing a substantial property on the Costa del Sol would include on their short list.

If you are planning on developing a new property here, I’d suggest you carry out two basic steps before choosing a builder.

  1. Check the financial health of the company you are considering using to build your new home.

If a company was set up recently and has never made a profit, that should raise an alarm. Even if you have a bank guarantee in place, if the firm building your new home goes bust, goes M.I.A. or the build goes awry, you not only have to get your money back, but also find a new builder to take on an existing project and guarantee work they have not done, and, potentially, still find that the plumbing is connected to the lighting at too late a date.

  1. Check the track record of the corporate officers.

By looking not just into the status of the company itself, but also at the individuals associated with it, you can decide whether they are the kind of people that you feel comfortable doing business with.

With a little research into a firm’s current and former administrators and directors, you can find out about any bankruptcies, legal judgements, and pending claims in regard to those who have held positions of responsibility and look back in time to previous roles they may have in other firms.

You should always ask a company to prove they are up-to-date with their obligations to the Spanish Tax Agency and Social Security, and that they provide a bank-issued certificate of solvency. It’s advised that payments are made against work done (and certified by the client’s architect or project manager, not the builder’s) and that 5% of every payment is retained for a period after completion, just in case.

For turnkey developments, where a single company is responsible for delivering the entire build, it is worth asking about and doing research into any subcontractors for the same reasons. And always ensure the contractor you choose applies for and obtains a building license from the local Town Council for architect-approved plans.

In a recent case, we helped a client who opted for the ‘cheap’ company, uncover seven other firms associated with the directors in the past, five of which had declared bankruptcy and one of which still had a pending claim against it. Suffice to say, the alarm bells were deafening and we definitively decided against using them for the build. Like our client said: “When it’s too good to be true…”

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