Legal Advice

INTERNATIONAL PROPERTY INVESTMENTS 2000

As Spanish Properties are still one of the most sought after, below are the simple steps towards buying Spanish resale property in Spain, which are slightly different than when buying a new development. Remember that you can always contact us if you have any legal questions about properties in Spain.

RESERVATION DEPOSIT Once you have found your ideal property, you reserve the property with a reservation deposit. This is usually between 3000 - 6000 €. You can either pay this by credit card, bank transfer, internet transfer or cash. Once you have paid the reservation deposit this guarantees that the property that you have chosen is taken off the market and is reserved for you at the agreed fixed price. At this stage you need to appoint a lawyer who is fluent in Spanish, who can also speak your native language. If you do not already have a Spanish lawyer we will recommend one for you. Your lawyer will explain the procedures involved with purchasing a property in Spain, as well as negotiating purchase terms with the vendor's lawyer. It is normal at this stage to give power of attorney to your appointed lawyer to act on your behalf. This will involve a visit to a public notary to sign over consent. At no time should power of attorney be given to the other party.

EXCHANGE OF THE PRIVATE PURCHASE CONTRACT After the initial reservation deposit has been paid, you have up to thirty days to exchange private purchase contract. This basically means that you will pay the remainder of the deposit required. This can be undertaken by your lawyer, who can exchange contracts on your behalf, if you are unable to attend.

COMPLETION On the assigned day of completion, the buyer and vendor (or their authorized representatives) will be present at the office of the notary to sign the Escritura de Compraventa (the title deed). The notary does not check any terms, but certifies that both parties have agreed to the terms stated, (the notary is in place to only witness both parties' signatures). At this stage the property becomes your possession, and your lawyer is now required to fax details of the title deed to the local land registry confirming you as the new owner. Your lawyer will also arrange payment of taxes and fees. It is advisable to make sure your property and contents are fully insured at this stage. Your lawyer or agent can undertake this for you.

COSTS INCURRED There are three fees that are required to be paid: - the lawyer's fee, the notary fee and the property registry fees, plus taxes (transfer tax - ITP, and "Plus Valia"). You will always have to calculate approx. 12% on the top of the sales price to cover all your costs. Please note that this is only brief guide on the steps taking when buying a Property in Spain. Of course, we understand you might have many more questions, so please do not hesitate to contact us for legal advice and our legal department will be ready to give you any kind of advice you may require.

TEL: UK 0044 (0) 7045755170 sales@ipi2000.com Spain: 0034 952939732

Or call us on 0044 (0) 704 575 5170 or 0034 952939732

Email sales@ipi2000.com or SKYPE—daveipi2000

What to check?

If you are thorough about checking out possible problems, you may save yourself a lot of hassle later on. The main areas that you should cover are listed below.

The property

the dimensions of the land. Is it the same as what appears on the title?

the structure of the building, for example the foundations, plumbing, wiring, dampness, cracks in the walls;

whether there is any part of a building that overhangs an adjoining property;

the condition of the fences;

the gutters, eaves, roof, exposed pipes; and

for pest infestations (e.g. termites).

Is there cracking?

Any signs of rain damage or leaks?

Any council notices about local flooding?

Do all the electricity switches work and the state of the wiring?

Water pressure and plumbing?

The drainage from the bath and other outlets?

Any signs of rising damp?

State of the roof, tiles, and guttering?

Buying off the plan

This is a term that is commonly used in today’s property market. 'Buying off the plan' refers to buying a property before it is completed, and this may include buying a property that is an architect’s plan. The deposit that is paid secures the property and the contract, and the balance is paid when the property is completed.

It is important to comprehend the nature of this type of transaction before you enter into it. Make sure you understand (amongst other things):

What the property will look like when it is completed

That you have a strategy for your accommodation during the waiting period

Whether the standard of the work will be adequate

Whether the developer has a track record or their work is available for inspection.

Checking the title

A title is the short name for "Certificate of Title". These days, titles are on computers at Land Titles offices .

The title gives details about the registered owner and details of any easements, mortgages, covenants etc.

Check:

whether there are any easements – an easement is something that restricts the ability to use the land, for instance, a right of way across the property;

details about any mortgages; and

whether there is a caveat – this is a warning sign that alerts you that someone else claims an interest in the property.

If there is a mortgage or a caveat, it does not mean the property cannot be sold, but to give you a "good title" they must be removed by the seller before, or at, settlement. Remember, most properties have a mortgage that the seller will pay off with the money from the settlement.

The local council

Check whether:

there is a vacant block of land next to or near the property. If there is, are there any plans for a block of flats or apartments to be built next door? This might allow the neighbours to look over your back yard;

there are plans for a shopping centre development down the street;

there are any zoning or building restrictions on the property;

the property is properly zoned for your use;

there are any buildings or other structures that were built without a permit (you will be very unhappy if the council tells you to demolish the recently added rumpus room!);

any special rates have been levied, for example a special rate to pay for road maintenance;

wiring and plumbing have been legally connected.

The statutory authorities

At some stage you will want to see certificates from various statutory authorities (which are like government departments) that tell you:

whether they have any interest in the property you want to buy; or

whether there is something that is going to happen in the area that might affect your use of the property.

You should always get these certificates, even if it seems to be a waste of your time. You will want to know:

the “adjustments” on the purchase price resulting from unpaid or unused rates and taxes;

if there is some reason you will not be able to use the property in the way you intend, for example, if you want to renovate;

whether there are any major works, like freeways, to be built in the area; and

whether there are services, like gas and electricity available.

We continuously ensure we are kept up-to-date on "legal" matters and our in house lawyers are able to ensure this is the case.

We advise, however, that you s