Buying a home, an off-plan property or an investment property in Spain does not always end well. The seller may vanish after being paid, the property may be sold twice, the developer may take deposits and never build, or the selling company may be stripped of its assets so that nobody gets paid.
Not every breach of contract is a crime. Criminal proceedings require evidence of deception, misappropriation, fraudulent disposal or engineered insolvency. Where that evidence exists, the buyer can use criminal proceedings not only to seek a conviction but to secure assets from the start of the investigation and recover the money.
1. Property fraud: when a breach becomes a crime
Fraud (estafa) requires deception sufficient to mislead the buyer into paying. In real estate, the deception may consist in presenting as real a development that could never be built, concealing that the seller was not the owner, stating that the property was free of charges when it was mortgaged, or taking payment knowing from the outset that the property would never be handed over.
A market downturn, an administrative delay or an unforeseen financial difficulty does not, on its own, prove fraud. The criminal complaint must explain what was stated, by whom, with which documents, when the payments were made and why the deception came before or at the same time as the payment.
Aggravated fraud. Fraud carries one to six years' imprisonment if it concerns housing (article 250.1.1 of the Spanish Criminal Code) or if the amount exceeds €50,000 (article 250.1.5); if both circumstances concur, or the amount exceeds €250,000, the penalty is four to eight years (article 250.2). The Supreme Court reads the housing aggravation narrowly: it covers the buyer's first home or habitual residence, which must be proved; it does not cover second homes or purchases as an investment. In that case it excluded the aggravation because the buyer never lived in the property in the more than four years before her death, even though her children testified that she had intended to (Supreme Court judgment 819/2021, of 27 October).
2. Double sales and hidden charges
The Spanish Criminal Code punishes, with one to four years' imprisonment (article 251):
- anyone who sells, charges or leases a property claiming a power of disposal they do not have, either because they never had it or because they have already used it (1);
- anyone who disposes of a property while concealing a charge on it, or who, having sold it as unencumbered, charges or sells it again before the final transfer to the buyer (2).
The absence of a public deed or of registration does not rule out the offence. In a case of off-plan homes sold under a private contract and later conveyed by deed to a third party, the Supreme Court confirmed that a sale under a private contract, without delivery, is enough for the double-sale offence in article 251.2; and that if the seller had already delivered the property, even symbolically, the second sale would fall under article 251.1, because the seller would be pretending to own something that was no longer theirs (Supreme Court order 320/2021, of 22 April).
That is why the contract, the date of each payment, possession, later deeds and the land registry records are essential.
3. The developer who takes deposits and does not deliver
A developer that takes advance payments for a home must guarantee their repayment with a bank guarantee or an insurance policy and pay them into a special account, separate from its other funds, which it may only use for the construction (first additional provision of the Spanish Building Act, Ley de Ordenación de la Edificación).
- Failing to meet those obligations is not, on its own, misappropriation. The offence is complete when the developer takes the money for itself without using it for the construction and reaches the "point of no return": it neither delivers the home nor returns the money (Supreme Court judgment 167/2019, of 28 March).
- But if the developer neither paid the deposits into the special account nor guaranteed them, it is disposing of money it knows it cannot use; if in the end it neither delivers nor repays, there is misappropriation, and the buyer does not have to prove what the money was spent on (Supreme Court judgment 255/2019, of 22 May).
Misappropriation (apropiación indebida) carries the same penalties as fraud, including the aggravated forms (article 253 of the Spanish Criminal Code). Bank records are usually decisive: receiving accounts, transfers to related companies, cash withdrawals and transactions after payment was received.
4. The seller who strips its assets
The existence of a debt to the buyer is not enough for a conviction for concealment of assets (alzamiento de bienes). There must be acts aimed at preventing or hindering payment: unjustified transfers, sham sales, contributions to related companies, hiding assets (article 257 of the Spanish Criminal Code).
The Supreme Court acquitted in a case where the directors had transferred their properties to a holding company in exchange for shares of equivalent value, registered in the Commercial Registry: swapping one asset for another of equivalent value that can be traced does not cause insolvency. Nor is paying one creditor before another a crime in itself (Supreme Court judgment 552/2016, of 22 June).
Two further situations:
- It is also a crime to hide or dispose of assets in order to avoid paying the civil liability arising from an offence one has committed (article 257.2). This is common when the seller already knows a complaint has been filed.
- If the seller is a company that is insolvent or about to become so, its directors may commit punishable insolvency if, for example, they hide assets, make unjustified disposals or falsify the accounts (article 259 of the Spanish Criminal Code).
5. How to act: criminal complaint, bail and attachment
The injured buyer should file a criminal complaint (querella) and appear as private prosecutor. That allows the buyer to take part in the investigation, request investigative steps and protective measures, press charges and claim civil liability in the same proceedings.
From the complaint onwards, the buyer should request bail and, failing that, the attachment of sufficient assets (article 589 of the Spanish Criminal Procedure Act), including against third parties who benefited (article 615). The application should identify properties, bank accounts, company shares and transactions with related persons or companies, and explain the risk that the money will not be recovered. We cover this in our guide for companies defrauded in Spain.
What can be recovered after concealment of assets. Civil liability consists, first, in setting aside the fraudulent transfers so that the assets return to the debtor and the buyer can be paid from them. Only if that is impossible, because the assets have passed irreversibly to third parties acting in good faith, is compensation ordered instead, capped at the value of the assets removed (Supreme Court judgment 518/2017, of 6 July). That is why it is so important to seek, as early as possible, the attachment of the properties or an order prohibiting their disposal, entered in the Land Registry, before they change hands again.
Glossary
| Spanish term | English | What it means |
|---|---|---|
| Estafa | Fraud | Obtaining money through deception sufficient to mislead the victim |
| Doble venta | Double sale | Selling or charging a property again after it has been sold, before the final transfer to the first buyer |
| Apropiación indebida | Misappropriation | Keeping money or assets received under an obligation to return them or use them for a specific purpose |
| Punto sin retorno | Point of no return | The moment the developer neither delivers the home nor returns the money; the misappropriation is then complete |
| Cantidades a cuenta | Advance payments / deposits | Payments made to the developer before the home is handed over |
| Alzamiento de bienes | Concealment of assets | Hiding or disposing of assets so that creditors cannot be paid |
| Insolvencia punible | Punishable insolvency | Criminal conduct by someone who is insolvent or causes their own insolvency |
Frequently asked questions
Is every breach of a property sale a crime?
No. There must be deception before or at the time of payment, misappropriation of the money, a double sale or concealment of assets. A delay or an unforeseen difficulty, on its own, is not a crime.
The developer took my money and never built. Is that a crime?
It may be. If it neither delivers the home nor returns the money, and also failed to pay it into a special account or guarantee it, there is misappropriation and the buyer does not have to prove what the money was spent on (Supreme Court judgment 255/2019, of 22 May).
I was sold a flat that had already been sold. Does it matter that my contract is private?
No. A sale under a private contract is enough for a double sale, even without delivery (Supreme Court order 320/2021, of 22 April).
Does the housing aggravation apply to a second home?
No. It applies to the buyer's first home or habitual residence, which must be proved (Supreme Court judgment 819/2021, of 27 October).
Can I recover my money if the seller has stripped its assets?
A conviction for concealment of assets sets aside the fraudulent transfers so that the assets return to the debtor; if that is no longer possible, compensation is awarded up to the value of those assets (Supreme Court judgment 518/2017, of 6 July). Requesting bail and attachment from the outset is decisive.
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