Purchase undeveloped land with a development plan at full purchase price?

Hello everyone, I am new to the forum and already have a question.

We have reserved a plot of land in S-H that we would like to buy. There is a draft development plan that is supposed to be finally adopted in January. The plots for commercial construction are already being offered by a developer through a real estate agent. The development work is supposed to begin after the adoption of the development plan.

Now my question: Is it common for the buyer to pay 100% of the purchase price in advance for a developed plot without having any security in case, for example, the development company goes bankrupt? Or do you pay in installments according to progress?

The development company seems to be a "2-man" limited liability company that only appears in the commercial register and on websites where companies are listed.

What are your experiences?

Thanks and regards,
Rainer

The notarial deed required for the purchase of the property should secure you in this regard. The notary is obliged to advise you. Either payment according to the progress of construction or a guarantee in advance.

It is common practice that the development company provides a completion guarantee to the municipality adopting the development plan, so that both the buyer and the municipality can be sure that the development will take place. If the company goes bankrupt, the municipality completes the development. Such a plot of land can be purchased, which was also the case here. Developer, owner, seller was a subsidiary of Volksbank, we already bought when it was still almost just a field. K.

OK, thanks. I will inquire about the amount of the [Bürgschaft].
Regards,
Rainer

There is a development plan draft, which is supposed to be finally adopted in January. The plots for commercial construction are already being offered through a broker by a development company.

Even though I agree with Karsten regarding the guarantee: who is offering here makes me hesitate. And a development plan that is not yet legally binding can still change to the detriment.

pay 100% of the purchase price in advance for a developed plot

The landowner is not saved from the redistribution of the development costs by the fact that he had already paid them to the previous owner. I also do not see the guarantee helping here, but only an escrow account for this quasi "special fund". But it is also nonsense that this item runs through the seller: as a result, I see you unnecessarily paying VAT and you unnecessarily paying property transfer tax.

The development company seems to be a "2-man" GmbH that only appears in the commercial register and on websites where companies are listed.

Viewed overall, I cannot completely dismiss the suspicion of fraud. Enter the names of the gentlemen in combination with "Gomopa" into a search engine. Such company listing websites often also show relationships to other persons and companies.

In a city near me, such a development company actually went bankrupt once, and there was also a bit of suspicion of possible insolvency fraud. It is therefore quite important to ensure protection in advance here. The buyers of the building plots ultimately had to pay twice for the development.