Home Purchase in Spain
In Spain, it is usual to resort to your lawyer when purchasing or selling a house. When you are delivered the keys, you become the owner of such property, but several procedures must be observed before having legal title to the estate.
Under the Spanish law, the owner of a real estate also owns any building existing or to be built on that plot of land. The land may be used as collateral for mortgages and loans. When you have already purchased a house, you may find out that there are some outstanding debts over it, such like taxes or mortgages. In Spain, mortgages and debts are borne by the property, not by the seller! So you have to do some research on the legal owner. To be sure, you need the Title Deed.
You should ask the seller for the Deed during the purchasing process. The Deed is a notarial document that includes data such as the name of the notary, the purchaser and the seller, as well as data about the property, the price, the payment terms, who shall pay the taxes, a statement that the seller is also the owner and whether the property is free from encumbrances and liens.
Once examined, it is advisable to deliver a copy of the Deed to a legal advisor, so that he or she may check whether the data matches those at the Property Registry and Land Registry. Our lawyer will ask both registries for a simple letter.
When you are certain that the property is free from encumbrances, you may sign a provisional purchase and sale agreement with the seller (or realtor), if you are sure you may afford it. In general, a small reservation amount has to be paid to have priority in the purchase. However, if you decide not to purchase the property, you will lose that money (but you may skip this stage). Then, the Conveyance Deed will be signed before a notary. The documents to be executed shall also be reviewed by a party not related to the bidder to check its legal correctness and prevent any conflict of interest. The property shall be conveyed on the date established in the contract; in general, two or three months after executing the provisional agreement. You should also ask your lawyer to check the conveyance deed if not understandable, or ask him or her to write a new one.
Once the Deed is signed, you should ask the same to be registered with the Property Registry (preferably on that very same date and, in any case, within 30 days). Registration is the most important part of the purchasing process, because before the property is registered in your name, an attachment may be levied on it and you will not know about it! Only after your name is officially registered with the Property Registry and in the Deed, you become the legal owner of the property. The original deeds shall be returned to the notary within two or three months. Additionally, as the new owner, you will be responsible for registering the property with the city hall, although a lawyer may carry out that procedure.
If you wish to use the services of a Spanish realtor, please be sure that it is registered with a professional association, e.g. API or GIPE, and that their commissions are not excessively high (up to 3%). Otherwise, ask for the commission to be charged. It may be as high as 10%! You may also ask whether they have purchased any professional liability insurance, the amount of the policy and whether they work with a blocked third party or client account. This is necessary because when the realtor delivers the payment of the reservation deposit to the seller, the latter may sell the house to another bidder. Or the house may be sold through another realtor (in Spain, sellers may put their property for sale through several agencies).
Some additional issues that should be taken into consideration:
If you intend to build on the plot of land, you might go to the city hall offices and ask about the urban development plan. It could be that constructions are not allowed on the purchased plot (land non suitable for development), or that a disco will be built on your street within a year.
If there is a Community of Owners, you might request proof that payments are up to date. Otherwise, the buyer will be held liable for any overdue balance.
Check if there are any pre-emptive rights. When a pre-emptive right is established, the city hall holds preference over the acquisition of the land and constructions in an area where a new territorial development has been planned. It does not happen often, but it is relevant to determine this with the Housing Institute of Madrid.
Find out if there are still tenants staying in the building. In Spain, tenants enjoy broad protection. There is no requirement for tenants to register with the Property Registry, so there is a possibility that you may not know about them. Solicit information from neighbours or the caretaker.
When a house is sold, both spouses' signatures are required! Otherwise, the contract may be annulled, irrespective of any provisions thereon in the prenuptial agreement.
All factors taken into account, it is very important to receive expert advice when buying real estate, above all when legal matters are concerned. You may contact directly our lawyer Patrick Nobel. He will give you expert advice at any stage. Contact him at nobel@gimbrere.nl. You may also call him at 0031 629262366.
