Property Law

We advise you on the purchase of properties in Spain

The purchase of a home in Spain should not scare anyone who wants to do so because the combination of rules and practices and institutions involved ensure the normality of the operation.

LAND REGISTRY

The first thing you should know is that properties purchases in Spain are registered and should be made in the Land Registry that guarantees the ownership of the house against anyone.

PUBLIC NOTARY

When registering at the Land Registry it is necessary to do it through a public deed before a Spanish Notary as no other document can replace it. The public deed is carried out before public notaries called Notarios in Spain and that are an official body and, in turn, autonomous.
They belong to the administrative field because this condition can only be acquired through public examinations and this is controlled by the state. In the same way, their salaries, which are called duties, are controlled and these are uniform or unique for all ‘Notarios’ in Spain.
In addition, the notary is partly a public servant because everything related to its operating rules are regulated by the state. Furthermore, the Notary is an independent professional also because everything related to his operation is autonomous, he has his office and he pays his employees.
Finally, the Notary is free in the exercise of his profession and activity, which means that with in relation to the Law and the rules that regulate his activity, and performs his work independently.
This is something you should know because appearing before a Notary is a guarantee that your purchase will be made with all the guarantees and respect for your rights.

LAWYERS IN SPAIN

If for the purchase of housing in Spain are important the figures so far mentioned, it is not least important the lawyer in Spain, who is a free and independent professional in the exercise of his activity and he is due to obey the law, his own ethical rules and the rights and obligations that he assumes after contracting with client.
The profession of lawyer in Spain is regulated by Law and in order to work as a lawyer it is required by one side have studied the degree in Law, now also it is necessary to pass some internship courses and to be registered in the Bar Association, known in Spain as Colegio de Abogados.
Although the exercise of the profession is free and autonomous is no less true that the action of the lawyer is controlled by the professional ethics of the Colegio de Abogados, in which he must be registered.

The lawyer in the exercise of his activity with his client must respect the existing professional ethics and created by the Colegio de Abogados (Lawyers Association in Spain similar to the Bar’s Association).

Unlike the other bodies mentioned, the lawyers in Spain assume a contractual relationship with his client in the performance of a work, in this case advice on purchase and he responds to the client for the work he does.

There are many figures that take part in the purchase of a home in Spain in the presence of the buyers because we must not forget that the normal thing is that a buyer is usually interested in a house through a real estate agency that has it for sale although it can also be bought from the owner, whether it is a developer or individual.

Well what we always say and advise to the buyers is that when buying they should get advice from independent lawyers in Spain, who has nothing to do either with the real estate agency, or the developer or the seller, and this for obvious reasons of incompatibility of interests, as all those who participate pursue their own particular economic interest and therefore the only one that does not meet this particular economic interest is the lawyer so that the client has the security that he will always advise him following only and exclusively the your interests.

A final question that we want to serve as a complaint of what is happening nowadays is that there are even lawyers from other countries who dare to advise their clients for the purchases they make in Spain.

With all due respect to these colleagues, our opinion is that we do not advise that this should ever be done, not only because of ignorance of the legal procedures and particularities that each country has a home purchase but for the reason that these people should normally be advised by real estate agents and as we have said many times this is not a guarantee of an independent advice.

Without prejudice to this, it is clear to us that the buyer needs to have a direct contact with his Spanish lawyer who must attend to him at any time that requires it and this is something that a lawyer from another country can never do.

DEPOSIT AND PURCHASE AGREEMENTS

When you are interested in buying a home in Spain, the next step is to sign a reservation or deposit document whereby the buyer has a guarantee of the purchase made.

Even though these documents are not private contracts, they are an advance of the contract and are binding for the parties.
Usually this is a document that real estate agencies that want to sell show and give to the interested party to sign, many times in a rush, and this is what experience tells us, and many customers sign hastily.

When you buy directly from a developer in Spain, a private purchase contract of purchase is always delivered directly where the developer has set general conditions for all buyers. Here there is no deposit contract but there is a purchase and sale contract and therefore it is primary in our opinion resorting to a Spanish lawyer in order to verify one on hand if the contract is strictly in accordance with the Law and if there are abusive clauses that benefit only developers and that have to be removed.

It is needless to say that there is a series of guarantees that the Law requires such as the guarantees of home purchase in Spain and they need to be verified in order to see if they meet the requirements. Consequently it is very important to be advised by a Spanish lawyer.

In the eagerness to acquire a reservation on the home, the buyer delivers a deposit and signs a document committing to grant a deed in a period of time.
We would like to tell to the interested parties that these documents are important because in them they must be established a minimum of conditions to guarantee the purchase of the home in Spain that is going to be made.

In our many years of experience we have seen many irregularities so we advise to act with caution and if it is possible to consult a Spanish lawyer from this moment. Do not hesitate to consult us, since we put at your disposal many years of experience.

The main effect of signing a contract is the obligation acquired by the signatories to carry out a home purchase with the sanction that if it is not carried out, there will be a penalty and if the buyer doesn’t register on public record loses the amount he received and if the seller is the one who doesn’t want to do it, he should deliver the double he paid as a deposit.

Subsequently to the signing of this document usually follows the signing of a private contract of sale where all the conditions under which the purchase occurs are developed and sometimes even though it is not the usual, the signing of a deposit contract follows directly the registration of a deed before Notary.

For this reason, we keep saying that the deposit contract must contain a minimum of clauses and conditions so that when the private contract or the public deed of sale are made, the essential conditions of the purchase must have been determined and in this way, there are no discrepancies between the parties that may generate conflicts.

In our Services section, we develop many articles in which you can obtain more information about the purchase of a home in Spain.

LAND REGISTRY (CADASTRE)

It is a Public Registry of an administrative nature that is managed under the responsibility of the Tax Agency and in which all the properties appear described in a plan and their characteristics appear as well as the value for tax purposes.

The Cadastre serves for this because the Tax Agency makes valuations and the value of the home is the official value that usually has nothing to do with the true market place, but that determines the minimum value by which they must appear in the public deed of sale.

At the time of purchasing a home in Spain, this value must be taken into account at least by the parties, since the Tax Agency has it as the minimum value of the operations and if a lower value is recorded, the Tax Agency will almost certainly review your file and you may be forced to pay a tax for the difference and also with a surcharge.

This cadastral value is also the one that appears as the basis for payment of the IBI (acronym of property tax in Spanish that is paid per year by each owner).
With the derived crisis from the real estate bubble there is the paradox that houses are being sold in Spain for a price much lower than the cadastral one, due to the fact that the bubble phenomenon produced the constant increase of these values so that the Tax Agency collects more.

It is an undesirable consequence of the crisis and in these cases we advise to claim and record real values and then before the Tax Agency to defend that the value of the deed is the real price of the market and must be paid on this value and not on the official that is unreal. There are many resources underway. Consult us. We have won many claims.

TAXES

The purchase and sale of dwelling in Spain is an operation subject, both for the buyer and the seller, to the payment of various taxes.
Apart from this, the seller who is not resident in Spain, when selling his home in Spain, the buyer will have to practice a 3% withholding of the purchase price declared in the deed of sale, which must be paid to the Tax Agency on account of the Income Tax.

Once the buyer gives proof of payment of this tax, the seller must make a series of transactions in which he will have to take into account the purchase price and the expenses including the taxes paid and to that amount apply the 3% and you could request the return of everything that exceeds the 3% to the Tax Agency. Consult us.

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CARLOS BAÑO LEON: ADVICE ON REAL ESTATE PURCHASE IN SPAIN

Our law firm has been advising clients of nationalities from other countries for many years when buying a home in Spain and it is a very important activity in this office.

Ensure a quiet purchase to the buyer with assistance during the period of the purchase and achievement of the house registration in the name of the buyer is our goal and for which we offer total and absolute assistance and communication with the office in a very broad business hours.

We work throughout Spain, so contact us without any reservation and we will immediately ask you to give us what we need in order to do the pertinent inquiry of everything related to dwelling and its legal situation before the first steps are taken.

We advise you on contract drafting and we will supervise all the documents sent by either the seller or by the agency so that you have all the information from a professional independent from the parts that participate in the purchase and thus you can be confident because the legal advice given to you, as it only pursues your own benefit.

From that point onwards, we will take over everything so you can finish with your purchase in Spain.

This is not a difficult process but it is necessary to be well-informed as there are several legal issues coming from a purchase and everything has to be clear to you.

If you take a look at our website and at the areas of real estate law you could check what we are saying, everything what we do and the number of problems that may occur if you don’t have independent and impartial advice.

We wanted to finish at this point but in fact the chain of events and actions that occur in the purchase is the opposite, since the first thing to do is to hire a lawyer and then follow the different stages that we have followed in this article in reverse order until ending in Notary and Land Registry.

 

ARTICLES OF INTEREST

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