Buying Spanish property safely Part 1

Many articles and posts have been published about Spanish property. Our intention is to offer a dinamic and practical guide to make the most of your investment in Spain as well as to advice you to plan in advance for your future as from the beginning of the transaction.

The information contained herein has been provided by Premier law Spain. Details will be shown at the end of this informative article.

Finding the right house, at the right place for the right price is probably one of the most complicated tasks. Especially difficult if the buyer does not know the different local areas.

We would always recommend taking a visit to the different places, seeing the areas, the facilities and amenities, public services, potential rental possibilities for investors, views, distances and many other things that one can only know about the wanted property. 

The different offers from estate agents is great at the present time. We strongly recommend engaging a lawyer specialized in property law in Spain. Even if you engage a solicitor in your home country, he should be specialized in international transactions.

If you have an international lawyer, you should have a local lawyer to represent your interests with certain Spanish issues. A lawyer in Spain who deals with you must be registered with the Bar Association (Colegio de Abogados).

Bear in mind that there is a great difference between a new property to be purchased from a developer or a resale, a property that has already been owned.

When you are looking for property, you may examine the physical features in detail, construction, installations, maintenance, community, facilities, installations and many other things that should be inspected directly by yourself. If you have any doubt about technical items, you can always engage an independent surveyor.

When you have decided on the specific property that you wish to buy, this is the right time to engage a lawyer, before any agreement or any moneys are paid to the estate agent or to the seller.

 DUE DILLIGENCE ON THE PROPERTY 

This is the legal and administrative information on the chosen house and contains all the important and relevant issues which would be the base of your purchase and your future safe sale.

A full legal report on your property should ascertain and contain the following:

 1. The ownership of the property, whether individuals, several co-owners, a Spanish company, a foreign company or a bank. This is rather relevant as no other should sign any document on their behalf unless a power of attorney has been duly granted by the owners.

2. Liens, liabilities, mortgages, injunctions or any kind of charges affecting the property.

3. Leases or tenants on the property and the nature and rental period of the contract.

4. Property with specific social regulations for low-income housing. (Officially protected)

5. Restrictions to dispose the property

6. Insurance from the developer when required, depending on the years that the property has been constructed. The insurance is to cover any damages on the structural defects in the building

7. Community of owners, whether if there is any outstanding bill or court proceeding against the owners.

8. Taxes on the property 

9. Administrative licenses

10. Energy certificate 

11. Any debt or court proceeding affecting directly or indirectly the house. 

12. Utilities and annual payments

 As lawyers, we provide with all the above information, making sure that everything is correct. 

The land registry is a vital part of our due diligence on the property. Sometimes it is not enough an uncertified note (nota simple) and we need to ask for more specific information i.e. a certification of ownership and burdens in order to make completely sure that the property is free of any current liability or future dispute. Furthermore, we can apply for full information with all the details from the date that the property was registered for the first time. This is important for old houses.

Please note that in some cases, the description of the land and the house in the land registry does not coincide with the actual construction and boundaries of the house. 

 If this is the case, we would advice to legalize the property by registering the “actual construction” in the land registry and Town Hall. 

The Town Hall, Ayuntamiento, is also a relevant part of the due diligence in a property legal and administrative report. 

The municipal taxes should be paid before the public deed of sale is granted. Finally the community of owner.

In our next post, we will describe the process to buy Spanish property, which will contain the following:

1. The payment of a deposit or reservation of the property

2. The agreement or private contract between seller and buyer

3. The final deed with a Notary public

4. Taxes and costs related to the purchase