LEGAL PRECAUTIONS WHEN BUYING PROPERTY SPAIN. PART 1
Dear clients and readers,
Further to our previous articles regarding the legal precautions tips to be considered when buying a property in Spain. We are still receiving an increasing number of enquiries from people. Who have paid a large deposit to the agent and they have lost their deposit entirely.
In fact, we have recently received an email from a person affected by exactly this problem. Please see below an extract of that email:
“ (…) Good afternoon. My partner S***P*** spoke with you earlier regarding a payment we made to “* Properties”. We have not signed any contracts or anything and would like a refund or partial refund if you could help? We were looking to buy a 2-bedroom detached bungalow in La Marina Urbanisation and sent a deposit on *th September (proof of deposit below). And we were told we would have 6 months to complete the sale. However, the seller was getting impatient and said they wanted to complete it before December.
* Properties got in touch to say the seller needed money urgently so would more than likely pull-out and they would refund us. S* went and visited *Properties who assured him we would get our money back. They then contacted us and said the seller had decided to not pull out. However, we told them we no longer wanted to go ahead. And we would like a refund as no contracts or nothing had been signed and we were getting pestered to buy it early. *Properties said they would not refund us and we haven’t heard anything since it’s all quite strange. I would be grateful if you could help? Many thanks”.
Therefore, due to the importance of this matter. We have considered it necessary to update our previous posts with some fresh new advice and recommendations; in two separate parts.
Please see below the Post of Legal Precautions Part 1:
Spain and in particular Costa Blanca has a unique appeal to foreigners. Its enviable climate and year-round sunshine, coupled with the relaxed, easy-going Spanish lifestyle, make it quite tempting. You might have probably read on the news that Spain’s property market is in good shape and it continues to recover fast; amidst continuous amelioration in economic conditions. In fact, all indicators confirm that the trend will continue throughout 2022. Especially resales properties unless obviously there might be a worsening of the situation with the war in Ukraine.
However, a property in Spain is a serious business that can be very daunting. Therefore, if you might have the intention of acquiring a property in Spain, you need to know all that is necessary; so that your dream does not turn into a nightmare.
In the first place, urban law is very confusing and unfair to the buyers. It is confusing because there is a maze of complex legislation; – not only national legislation (that covers the whole of Spain). But each autonomous region and town halls have their own legislation as well. Likewise, it is unfair and harsh, because when faced with an infringement. (Which many foreign buyers have fallen victim to). The Government authorities will hold the buyers/owners who bought in good faith accountable for the infringements; fines and/or demolitions, without considering that the buyers are the real victims.
Taking the above into consideration, remember that it is always better to be safe than sorry and know exactly what to look for in order to avoid making critical mistakes in the first place. Which might turn your dream of living in Spain into a real nightmare.
Therefore, please find below first some useful tips, which I hope will help, in case you might consider buying a property in Spain:
LEGAL PRECAUTIONS WHEN BUYING A PROPERTY IN SPAIN PART 1
First. – It is absolutely crucial to check the ownership and any charges, encumbrances or liens registered on the “land registry certificate” of the property as well as planning permission BEFORE ANY DEPOSIT IS PAID TO THE SELLER.
All the property searches and investigations must be thoroughly performed to identify potential legal property issues. As searches will determine whether there might be any hidden charges or encumbrances over the title of the property that might need to be addressed prior to signing any purchase contract.
VERY IMPORTANT: To that end, the agent or vendor must provide the buyer’s solicitor with at least the preliminary legal paperwork beforehand; and upon verification by the lawyer, only then, a deposit can be then safely be paid into the seller’s account. (Never to the agent remember, as the agent can go bankrupt tomorrow without further notice!)
This is the only way that you can have complete peace of mind and guarantee that in the event of a possible legal problem found on the property, you will not lose your deposit.
As I said before, many unreliable agents in Spain, ask the buyers to blindly pay them huge deposits upfront. Which is extremely risky, because in the event of a dispute the seller or agent will refuse to give the money back; like it happens in your case.
In fact, according to our vast professional experience, where the buyers agree to pay to the agents; a large upfront deposit (for instance 5.000 or 10.000 euros to the agents, we can confirm that- once the money is paid;- if the agent might not have all the relevant paperwork of the property, or alternatively; if the paperwork provided might reveal any possible legal hidden problems or encumbrances, the deposit paid by the buyer will be simply lost. (Like it has already happened to another client of our firm recently, where we found out that the property didn’t belong to the supposed seller because it had actually been repossessed by the bank and sold to a third party).
In other words, accepting to pay in advance money is ALWAYS extremely risky, because should a problem might be detected; the buyers might be ultimately forced to take the agent (or the seller) to court.
We are talking from experience, so our sound and professional legal advice for you in case you might consider buying another property again; is better to be safe than sorry, and you must not accept to pay 1 single euro until a background legal search on the property is properly carried out.
Second. -. The purchase agreement must be drafted by the buyer’s solicitors before any deposit is paid and it must not contain any abusive clauses
Remember what we have explained to you before. The agent or vendor MUST provide the buyer’s solicitor with at least the preliminary legal paperwork beforehand. And upon verification by the solicitor;- then the private agreement is drafted, and only then, a deposit can be safely being paid into the seller’s account. (And never to the agent remember, because, in the event of a dispute; you would have to sue the agent as well, as it happens in your particular case).
Third. – The property must be free of hidden charges before signing the title deed.
Handing over the property without being completed; or with faults that affect the habitability of the house or the whole urbanization is extremely risky and might have dire consequences for you in the future.
SUMMARY AND FUTURE PART II OF THIS POST
In part II of this post which will be published shortly; we will continue giving you very useful tips that you need to consider when buying property in Spain. Legal precautions, which in the end will guarantee that the outcome of the conveyancing process will be in your favour.
Remember a home is likely the most significant and largest purchase investment that you will ever make in your lifetime. Therefore, do not take unnecessary risks, and wisely protect yourself from being held legally accountable for the errors of the owner’s past. We are proficient and totally independent conveyancing Lawyers. If you kindly check the testimonials section of our new website, https://www.bestsolicitorsinspain.com you will find plenty of testimonials from real clients who put their trust in our Firm.
Fortunately, they are all now all extremely grateful to our Firm for the excellent work and protection offered, which fills us with a lot of professional pride. We hope this information is useful. However, please note the information provided in this article is of general interest only and is not to be construed or intended as a substitute for professional individual legal advice.
HOW TO CONTACT US FOR FURTHER SPECIFIC ADVICE?
Should you be interested in receiving more specific information,- (either about this particular subject or any other issue of law),- remember that you can contact our firm in several ways:
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Finally, thank you very much for your attention, and in case you might have any questions or doubts at all about the Post of Legal Precautions Part 1, again please do not hesitate to contact us. We will be very glad to help you!
We look forward to helping you and the benefit of our “know-how”.
Mr. Oscar Ricor Morales
“NON-PRACTISING ENGLISH SOLICITOR IN ENGLAND AND WALES”, under the “Solicitors Regulation Authority” (SRA) SRA number 519196 and practicing Spanish Solicitor