Legalities of buying property in Spain
Buying a property or building land in Spain is different to buying in the UK and therefore it is essential you engage professional people to represent you. Unlike the UK where your solicitor will carry out all the searches necessary to discover any encumbrances there may be attached to the property, in Spain the lawyer in most cases will only check out the legal status, i.e. charges or embargos recorded on the property register. It's worth noting that in Spain debts incurred by the previous owner relating to the property, unpaid community taxes for example, will be passed to the new owner.
Generally speaking a Spanish Lawyer would not normally make enquiries with the local planning authorities in order to discover whether there were any plans that may affect the property in the future.
For example a Lawyer involved in a property purchase would ensure that there were no outstanding mortgages or other encumbrances and that the seller was the legal owner of the property and, therefore, had the right to sell. However, it is unlikely he would discover that the town hall had a plan to route a new highway close to the house and as a consequence would require you to give up 2 metres of your garden! Or as we discovered in a recent case when the previous owner had made illegal reformations to the property leaving outstanding fines in the Town Hall for the new owner to deal with.
Having chosen your Spanish property or plot and had both the legal status confirmed and a satisfactory search report received from the local municipal planning department the next step is to have an independent survey of the property. This very important aspect is often overlooked by purchasers particularly those who buy through an estate agent. In the case of a resale property, the surveyor will carry out a full structural survey and report any structural weakness, defect or signs of subsidence.
Legal Advice and Assistance
Prevention is always better than cure. From now on until and after completion of the purchase, the lawyer will take care and assist you in all the different steps involved in the transaction. There
are many excellent English-speaking Spanish lawyers on the Costa Blanca. Choosing the right lawyer is your guarantee that Spanish legal requirements are met, that the property is registered in the
vendor's name and that it is free of any mortgages, charges, encumbrances, debts or other liabilities. Your lawyer will negotiate and discuss the purchase terms with the seller. The terms should
not be limited solely to price but should cover in detail all your requirements like the completion date, the form of payment...etc. Once you have appointed your chosen law firm they will explain
the procedure involved in buying in Spain and the associated costs. The next step after paying the reservation deposit is to examine and witness the terms of purchase in writing. At this stage the
lawyers will draw up the private contract. It is customary to pay a deposit of ten per cent of the price on exchange of contracts, which is not normally refundable if the purchaser defaults.
Conversely, if the vendor fails to perform his obligations, you will be entitled to rescind the contract and claim damages. Before your lawyer exchanges contracts, he will have completed his searches and investigations in respect of the property.
Finally, on the day fixed for completion your lawyer will go to the Notary Public to sign the title deed, making the final payment to the vendor who will simultaneously pass over possession of the property to you, handing you the keys. At this stage the sale is completed. Immediately after completion, the notary will fax details of the title deed to the local land registry to inform them of the identity of the new owner, to prevent the property being sold twice. In this way the notary and the Land Registry act together to protect and guarantee your interests. You will then have to pay the relevant taxes and have the original title deed submitted to the Land Registry for registration of your title. Your lawyer can also arrange for the transfer to your name of utilities and services such as water and electricity and organise their payment through a local bank.