buyers guide 1
Buying a home in Spain does not have to be a daunting process. It is really a matter of understanding the steps and being well informed of the legal and technical jargon. Whether it is a new build or a resale the basic procedure is the same, just with different timescales.
Below is a brief outline of the purchase procedure, followed by other useful information and an explanation of services necessary or available.
Once you have found the property, the Estate Agent will often ask for a small reservation fee, usually 3000 Euros, to take it off the market whilst a private sale/purchase contract is drawn up. This forms part of the balance of the deposit due.
This private contract, between buyer and seller, should contain details of the agreed purchase price, the deposit payment, provision for payment of the outstanding balance, any extras, e.g. furniture, the intended completion date and all other relevant terms and conditions.
A specific clause (called an arras) may be included with a financial penalty should either party default on the terms of the contract. In the case of the seller they would return the deposit and forfeit an equivalent sum, i.e. give the buyer double the deposit. If the buyer pulls out they lose the deposit paid.
It is important that your Spanish lawyer checks the contract before it is signed to ensure it protects your interests. To be legally accepted in Spain the contract must be written in Spanish. Sometimes it is produced in dual language but you can always ask your lawyer for it to be translated. Always check if there will be an additional charge for this service as it may be more cost effective to have it translated privately.
Once the contract is signed by both parties and you have paid the deposit there is then a binding agreement between buyer and seller.
All property sales or purchases should be registered in the Land Registry Office in Spain. They keep details of the property and record financial charges and other matters which may affect the Title Deed. It is important to make sure the vendor is the legal owner of the property and any relevant taxes or outstanding mortgage are paid before signing the new Title Deed on the day of completion.
This information is detailed in a document called a Nota Simple, which is ordered from the relevant Land Registry Office.
In the case of a new build, the builder must have a building license and planning permission for the construction. Given the length of time the planning process takes, sometimes the permissions will still be in the application stage at the time the private contract is signed. Your lawyer should check this and may suggest an additional clause to protect any monies that you may have paid in the event that the licence and permissions are not granted.
To complete the purchase, both buyer, seller and their legal representatives are required to be present at the same time to sign the Title Deed (Escritura) in front of a Spanish Notary (Notario Publico). This person, who is a legally trained expert, will check the documentation and identification of all parties before it is signed.
It is at this time you will be required to pay the balance of the purchase money and all additional taxes so if there is a Spanish mortgage involved in the purchase then this will also be signed for in the Notary at the same time as the Title Deed with the bank manager present. You will then be given the keys to your new home.
You are recommended to visit the property before going to Notary to check that everything is in order.
Once the formalities have been completed at the Notary, your lawyer will pay the necessary fees and taxes and present the Title Deed to the Land Registry Office for registration. This process can run into several months before the official stamped Title Deed (Escritura) is available to you. For this reason you should make sure that you are given a Copie Simple of the Title Deed at the time of signing as this is required to put all the utility bills etc into your name.