Buying Property in Spain Legal Process

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					    What you need to know about

     In Spain
The Property Buying Process
         in Spain
Legal Note - It should be remembered that the application of Spanish law varies considerably according to region and the circumstances
of each individual and so this report can be treated as a general guide only and not as a substitute for qualified legal advice regarding
any particular situation. Responsibility for acting on foot of this guide alone is entirely personal and no liability can be accepted by
myAdvocate Spain. For a link to where you can get advice on your specific situation from expert legal practitioners in Spain please see
the end of the guide.

                                    Property Buying Process in Spain

The process for completing the purchase is relatively straight-forward. However, due to a number of
important differences in the Law of Property between other countries and Spain it is crucial to follow
the process laid out below or risk jeopardising one of the most important purchases many people are
likely to be involved in.

Realistically the first step is to hire a professional who can guide you through the process and ensure
that all pitfalls are avoided.

Be extremely wary of accepting the recommendation of the estate agent as they are primarily interested
in the sale going through and gaining commission rather than ensuring due diligence on behalf of their

                            Spanish Property Buying Process: Legal Checks

The process for safely buying property in Spain may be summarised as follows:

                        •    Legal Checks to be made on the Property
                        •    Preliminary Agreement
                        •    Final Agreement (Escritura)
                        •    New Properties

                                         Legal Checks to be made on the Property

In any property transaction a number of legal checks need to be made to ensure that there are no
impediments to the property being transferred. The major legal checks can be summarised as follows:

    1. Make sure the property is owned by the seller;

Sounds basic but needs to be done. You wouldn’t be the first foreigner to be hoodwinked in this

The details of the owner of any property appear on the ‘nota simple’ a short hand document that can be
obtained from the Land Registry in the local Town Hall.

   2. Make sure there are no debts or other ‘encumbrances’ on the property;

Unlike the UK and Ireland any mortgage or other charge on the property is deemed to be the
responsibility of the owner of the property under Spanish Law.

You may see a magnificent property advertised at a bargain basement price and later find out that it
was a result of loans having been taken out against the value of the property. Creditors may soon be
lining-up at the door of your beautiful new home demanding repayment of loans you have no idea

Any current charge on the property must be stipulated in the deeds relating to the property and so as
long as you check the deeds in the local registry the existence of any charge should become apparent.
It should also be a standard clause on the contract for purchase that such charges be extinguished upon
the passing of the title.

   3. Ensure there are no tenants living in the property at the time of purchase;

Under Spanish law a sitting tenant not only may remain in the property for a maximum of five years
from the granting of the lease but also has first right to any purchase so it is important to make sure that
this is not an issue.

The presence or otherwise of sitting tenants is perfectly obvious but should be noticeable from the free
and unfettered use by the owner of the property i.e. entering as and when desired without problems.

Every situation is unique and there are a number of other important checks that should be made
depending on the type of property i.e. , land as opposed to property, commercial etc., the nature of the
sellers i.e. resident or non-resident, private individuals or as a legal company etc. and indeed more
checks are discussed under other headings in this section.

However, in general, upon determining the facts of each situation it is the responsibility of the
professional advising the purchaser to employ the searches that are necessary in each given situation.

                                         Preliminary Agreement

Assuming that all the checks determine that the property is as stated and can be purchased safely, the
purchaser may well need some time to get together the funds necessary to complete the purchase.

The Spanish property buying process provides for this by use of a 'preliminary' or 'deposit' contract.
Effectively this is a ‘contract to contract’ and stipulated that by termination of a stated future date, the
property will have passed from the seller to the purchaser. All details regarding the property, the buyer,
seller, date by which completion of the sale must be carried out should be contained in the contract.

Should either side fail to complete, there are penalties. The buyer will forfeit the deposit (typically
10% of the sale value) and the seller twice that amount.

                                        Final Contract (Escritura)

The final contract or 'escritura' as it is known in Spanish is when title of the property passes and the
buyer’s new title may be registered in the local Spanish registry. The signing takes place in the office
of the ‘public notary’ who is effectively a type of official registrar who must witness the contract
signing in order for it to be legally binding.

On the day of the signing all interested parties meet in the office of the notary. This would include a
representative of the bank if a mortgage is required.

The deed is read aloud by the notary and the parties then present their identification after which the
deeds are signed by the vendor, the purchaser and the notary. At this point the monies for the purchase
are handed over in the form of a bank-guaranteed cheque.

                                              New Property

If, rather than being a second hand property, the property is completely new and built as part of a
complex of apartments or houses, the process changes slightly and is therefore dealt with separately.

       1.Legal Checks to be made on new Property

One of the major differences with a new property built as a part of a complex of residences is a direct
result of the scandals involving illegal zoning of lands for building by corrupt officials and developers.

Typically the purchaser is on safe ground where the land on which the complex is built has been
classified for residential use and the developer has planning permission for building the development,
as stated in the ‘approved technical project’.

       2. Contracts and Payment

If the complex is only at the starting phase and is not yet built it is normal to sign a preliminary contract
and pay a deposit then, as the development proceeds pay up to 30% (or more) in stages. Checks should
be made that such payments are guaranteed by a bank in case the development is not completed.

Regarding the preliminary contract, it is here where all of the obligations on the part of the builder are
laid out and where it is important to make sure that you are protected from issues such as lack of
planning permission, land use, bank guarantees.

       3. Completion

Upon completion, as with second-hand property it is necessary to sign the deeds of sale and pass
ownership. At this point the purchaser should be careful to ensure that the local council has granted the
complex First Occupation Licence and that the development has been certified as completed. Without
both of these, the property is not legally built and could be subject to a demolition order at some point
in the future.

Download all of the reports in this series to get all of the information you need to protect your
wealth when dealing with property in Spain. Just some of the questions answered:

                                    Which legal checks on a property
                                     are vital to avoid any problems

                                         The step-by-step process
                                      of buying a property in Spain

                                    The rights and responsibilities of
                                        property owners in Spain

                                      Typical ploys to watch out for
                                        to avoid being defrauded.

                                      Property taxes you are liable
                                   for and those the other party pays!

                          Click here for to obtain your free updates:

                  Protect Your Wealth When selling or buying property in Spain

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legal fees in Spain please go to:



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