Due to recent improvements in the Spanish property market many people feel that now is a good time to invest in Spanish property.
But many people are making mistakes in their eagerness for clinching a deal and trying to get that last minute bargain before prices start to rise again.
Our list below has been put together so that you can avoid the common pitfalls:
1.Hopefully you will have done your research and found the perfect location with the help of the internet, community forums, local magazines and newspapers and by speaking to local people. However, before viewing any properties, now is the time to find a reliable, trustworthy, independent and English speaking lawyer, known in Spain as an ‘abogado’. Otherwise you may get carried away by the speed of the process and choose the first company you come across, who may be inexperienced and unable to communicate well with you, causing problems and costly delays further down the line.
2.Don’t be put off by the legal terminology. By definition, a lawyer is a licensed legal practitioner who is qualified to give legal advice in one or more areas of law. Whilst in the UK you would tend to use a solicitor to assist you in the buying process, a solicitor is just a type of lawyer. The most important thing to check is that your lawyer is independent, so that you can be sure that they will have your best interests at heart throughout the process.
3.Your lawyer will be able to advise you of all the costs based on your budget available for the property purchase including any taxes payable, the notary and land registry fees, utility connection costs and of course their conveyancing fees. A reputable lawyer will be completely open where costs are involved – avoiding any nasty surprises cropping up later in the process.
4.Once you’ve found your dream property, and your offer has been accepted, make sure you let your lawyer review any paperwork that you are asked to sign before you sign it. If you’re just in Spain for a few days or you feel under pressure as there are other people interested in the property etc., don’t panic! Your lawyer will be able to review the contract and translate it into English (if necessary) and will ensure that you are not signing anything detrimental. They will also be able to confirm that any deposit that you are asked to pay at this stage is correct.
5.Now that your offer has been accepted the lawyer will start to carry out the necessary legal searches – one of the main reasons for this is to validate ownership. Your lawyer will verify that the person selling the property to you is the registered legal owner as this is not always the case. Your lawyer will also verify the description of the property.
6.Another major reason for carrying out these searches at this stage is to check whether there are any mortgages or other charges registered against the property. Unlike in the UK, in Spain, any mortgage or debt associated with a property is transferred to the new owner when the property is sold. Therefore it is absolutely critical to ensure that the property is debt free when sold, or that if there are debts, that they are settled before or on completion day. The type of debts may relate to: a mortgage, unpaid council tax (known as IBI), unpaid community charges or even electricity, gas and water bills.
7.Your lawyer will also check that the property complies with local regulations, is not in breach of planning regulation laws and has been built in line with the planning consents granted, as non-compliance could mean that you would find it difficult to sell the property at a later date and in extreme cases be forced to demolish the property at your own expense!
8.If your property is a ‘new build’, not a resale, your lawyer should ensure that the necessary bank guarantees or insurance certificates are in place before you agree to make any payments. Without this you could end up in a situation where the developer runs out of money and you are left with an unfinished plot, having lost lots of money along the way.
9.When it comes to completion day, your lawyer will accompany you (or go on your behalf with a power of attorney) to the Notary’s office, where the Notary will double check that everything is in order. Your lawyer will translate the proceedings making sure that you are fully aware of everything before you sign the title deed.
10.Finally, your lawyer will deal with the registration of the property into your name with the relevant Land Registry and file and pay the necessary tax returns, completing all loose ends of the process for you.
And there you are - the owner of a Spanish property which you can now enjoy!
We at Abad Abogados pride ourselves in being able to offer you a comprehensive conveyancing service, covering all essential areas noted above, ensuring that the process runs smoothly, keeping you informed at each step of the way and offering our legal advice based on many years of experience and expertise.
We are fully independent, English speaking and will always put our clients’ needs first. With Abad you can be confident that you will be in safe hands.