Once you have found your ideal property in Spain the buying process is simple and efficient. Many clients are concerned about the disturbing stories of the past but the buying process has now improved and all good Spanish lawyers are extremely diligent and are legally liable to do a good job for you. It is essential to use a recommended Spanish lawyer and you will have no problems whatsoever.
The first thing to do is to appoint a lawyer to act for you and to handle the purchase or sale on your behalf. All lawyers in Spain are members of the “Colegio de Abogados” which is similar to “The Law Society” in the UK and they are therefore fully regulated.
An important factor is to select a lawyer who is familiar with property conveyancing in the area that you are intending to buy and also who speaks your native language. The lawyer will require your “Power of Attorney” in order to act for you if you are residing in another country. We have an extensive list of very efficient lawyers in each area if you require help in deciding which lawyer to appoint.
RESERVATION DEPOSIT
Once you have found the Property that you wish to buy and after having negotiated a mutually acceptable purchase price – you will be asked to sign a Reservation Contract, usually drawn up by the Agent, and you will be asked to pay a small Reservation Deposit. This contract and deposit will allow the property to be fully removed from the market and reserved for you whilst your lawyer conducts the searches and inspects all documentation for the property. Should there be any legal or documentary reasons that prevent the sale process from continuing then that deposit is returnable to you. The Reservation Contract states all of the conditions of the sale.
SEARCHES
Upon payment of the Reservation Deposit your lawyer will perform searches at the Land Registry and at The Catastro (Tax Registry) and he will ascertain that all taxes are paid and that there are no charges or liens against the property. He will also conduct an extensive search of all of the documentation to ensure that there is right of title for the vendors and that the property is fully legal. He will also cheque that all utility bills are paid. You will need an NIE Number and a bank account to be able to purchase the property and your lawyer will obtain these for you under his Power of Attorney from you.
PRIVATE PURCHASE CONTRACT
Upon completion of the searches your lawyer will inform you that there are no problems with the property and that there are no liens or charges against the property. If it has been necessary to correct any documentary errors he will also confirm to you that this has been done. He will then prepare the Purchase contract between you and the vendor. You will be asked to approve this Purchase Contract and you will need to pay a deposit that is normally equal to 10% of the purchase price, the Reservation deposit that you will have initially paid will be part of the 10% payable. This process is similar to the exchanging of purchase contracts throughout the rest of Europe and it is a legally binding contract that your lawyer can sign on your behalf and with your consent, under his “Power of Attorney”. The 10% deposit is not refundable if you subsequently withdraw from the purchase. A date for completion of the purchase will be stated in the Private Contract and at completion the balancing payment will be made.
ESCRITURA/DEEDS
On the agreed date for the Completion a new Title Deed (Escritura) will be drawn up for signature by you or your lawyer (under his/her Power of Attorney) in front of a Notary. The Notary will also have obtained a Certificate from the Land Registry confirming that the property is free of any charges. A Notary in Spain is empowered by the Government to ensure that the transaction is fully understood by both the buyer and the vendor and he will ensure that everything connected to the sale/purchase is fully correct within Spanish Law. Once signed the deed will be sent by the Notary to the Land Registry and the property will be registered in the name of the new owner. Your lawyer will obtain a copy of the Deed from the Notary after the signing and the original Deed will be returned after Registration.
COSTS
Apart from the purchase price of the property you must take into consideration the costs involved. These costs will vary depending whether it is a resale property or a newly built property. The costs involve will include IVA (VAT) on newly built properties or Transfer Tax of 8% on resale properties. In addition there will be Lawyer fees, Notary fees and Registration fees. You should allow approximately 10% on top of the purchase price to cover all fees and taxes.
After completion your lawyer will assist you with obtaining your Spanish Residency papers (if necessary) and also changing the utility contracts into your name. Your lawyer can also help you to obtain a Spanish will (highly recommended) and also help you with tax returns if you wish. It is a very safe purchase/sale system if you employ a good Spanish Lawyer.
If you require a Mortgage to enable you to make your Spanish purchase please contact us for advice.
Please do not hesitate in contacting us if you require any further help, information or advice on any matters relating to property sale or purchase.