Buying property or land
Buying ‘off plan’
Buying property under construction
The purchase of a house or land for future development will probably be the single largest investment that an individual will make in their lifetime. For that reason, and even more so when buying in a foreign country, it is exceedingly important that you have in attendance a property law specialist to look after your interests.
The last thing you need when entering into an important purchase such as this is to discover that there are problems with the developer or debts on the building or planning disputes. To avoid future problems, your lawyers need to carry out a thorough investigation including ascertaining that the seller has the legal right to sell, that all permissions and licences are in place that there is adequate insurance to cover against possible defects in the construction, and that there are no disagreeable surprises in store for you.
Fairway Lawyers will co-ordinate everything to do with the buying process from the early enquiries to the final contract so that buying in Spain becomes a pleasant and enjoyable experience.
THE BUYING PROCESS
1) Reserve contract and deposit
Once you have decided to buy a certain property, the first step is to sign a contract to reserve the property with the salesman, this will entail the payment of a deposit usually somewhere between 3000 and 6000 euros. this document assures the buyer that the property is not going to be offered to any other party subject to your lawyer verifying the seller’s right of ownership of the reserved property.
2) Legal verifications
First, the lawyer will need to verify ownership of the property and that it is free from incumbrances such as mortgages, or other debts. This is extremely important in Spain because many debts by owners are secured against their property and if not discovered, the debt can be passed on to the new owner.
Second, the lawyer will procure the following documentation relative to the property and its ownership:
a) obtaining note showing update of the registry of the corresponding property
b) copies of any previous deed of sale (if applicable)
c) a ‘cadastral’ certification
d) banking guarantees and safe licenses of construction
e) endorsement certificate of the community of proprietors (if applicable)
Third, the lawyer will verify that the propery has the necessary licenses, that the conditions of these licenses have been respected and that any sanctioning file does not appear on the property in the city council´s corresponding file.
When compiling all this information Fairway Lawyers send a detailed report to the client informing them of the real identity of the current holders (proprietors) of the property, the existence of any debts, loads or burdens on the property, the real surface area of the demise (the property and land in question), its year of construction, situation with respect to the community of proprietors, etc. In our report to clients, our conclusions will determine if all the legal requirements and pertinent conditions for the purchase of the chosen property have been fulfilled.
Buying ‘off plan’ or whilst construction is in progress
In those instances where the purchase is of a property off plan (pre-construction) or under construction there are special requirements to be satisfied by the developer to guarantee the buying process is legally safe for you. The developer must provide bank guarantees for the money you will pay before completion; must provide legal documentation such as licenses, plans and specifications; there must be non-abusive clauses in your purchase contract; and a building guarantee for ten years. Your lawyer will verify if the work licenses fulfill city-planning requirements and the legislation is effective; that the registry deed of the specified parcel of land (the demise) is properly included in the real estate complex; and that the pertinent insurances and banking guarantees exist. Your lawyer will also verify that sufficient guarantees exist so that the building is constructed and delivered and what your options are in case of delay.
3) Contract for sale and other proceedings
Once the legal verifications have been made the process moves to the contract stage which will require the signatures of both buyer and seller to the terms of the contract. The contract is a document which embraces a series of fundamental information that establishes the conditions of the transaction, the names of the participants, the legal capacity of each, a description and registry data of the property, the price to be paid, the terms of payment, the date of the delivery and other obligations and rights of both parties.
4) Exchanging contract for sale
As a rule, on exchange of contracts the buyer will pay 10% of the purchase price, deducting from that payment the deposit already paid. A completion date of approximately one month will be set (to be agreed between the parties). As of this moment, both parties are tied by this document which acquires legal force. During this phase, it is advisable that the lawyer undertakes a series of actions that are essential for the good and timely completion of the transaction. These include: – Obtaining the NIE – Opening of banking account in Spain – Formalization of being able notarial in Spain or United Kingdom – Study and request of hypothecating loan
5) Completion
On the due date, the balance of 90% will be paid and the keys handed over. This will formalize the Public Scripture of Transaction and the property will officially change hands.
