PROPERTY CONVEYANCE II: A REAL PROBLEM CONSULTATION
I. THE ENQUIRY
Dear clients and readers,
Over the past few weeks, we have been receiving a lot of important enquiries regarding property buyers who are facing all sorts of legal problems with unscrupulous agents in the area.
Therefore, considering the importance of the matter, we will be analyzing some of these problems in a series of articles. In today’s post, we will consider a serious case where the agent has illegally requested after completion the payment of his 3% commission from the buyer!
Suffice it to say that the buyer was totally unaware of this supposed payment. And the agent was treating the client in the most arrogant way. First, please see below the email received from our client:
“Good morning,
I’m looking for legal advice regarding a recent property purchase in Spain and unexpected real estate agent fees which haven’t been agreed upon in any contract nor verbally during the process of property purchase. You can reach me via email or call at (…), or Whatsapp (…). Kind regards, P.”
II. THE ADVICE
All terms and conditions regarding a purchase must be perfectly clarified by the agent at the outset of the case because the buyer is protected by Spanish and EU consumer law.
Regarding the amount of fees that the real estate agent is asking for, by law, the agent’s fees are paid by the seller, not the buyer on completion. This means that the agent is abusively trying for the buyer to pay a commission that in reality corresponds to the seller. This is basically illegal.
In fact, even if the purchase contract had hypothetically mentioned any possible payment of fees by the buyer. That clause could eventually be declared abusive and consequently null and void.
The agent must sign a private retainer document with the seller. According to this, the seller should agree to pay a percentage (usually between 3-5% commission on the seller’s price) if the property is sold. A totally different situation is for example if the buyer might have hired the agent for example to apply for an NIE, or related service. Which again should have been quoted in advance by the agent separately, as that is an extra service which has nothing to do with the price of the property. Legal searches are not included on this, because the agent is already being paid a substantial commission by his own client. The seller, as indicated before. Therefore, in conclusion, the buyer is not legally entitled to pay anything else to the agent, who is probably trying to get paid double commission, that is both by the seller and by the buyer.
III. IMPORTANT LEGAL TIPS WHEN BUYING A PROPERTY IN SPAIN
1. In the first place, purchasing a property in Spain is a serious business that can be very daunting. Therefore, you need to know all that is necessary so that your dream does not turn into a nightmare. 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 its 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 being safe than sorry and know exactly what to look for in order to avoid making critical mistakes in the first place, that might turn your dream of living in Spain into a real nightmare.
We would like- if we may- to kindly introduce our Law Firm as fully independent conveyancing experts with more than 20 years’ experience, in dealing with all kinds of complex Purchase processes of a property in Spain. In fact, as specialized property lawyers, we frequently come across these kinds of consultations, so the reason for writing this article is twofold:
First, to warn potential buyers, like you, from committing in the future possible serious mistakes that could seriously transform your dream of living in Spain into a real nightmare.
Second, we strongly advise you to always seek for independent legal advice from a specialized Lawyer before paying any upfront deposit, (and never to use the one recommended by the agent).
2. Therefore, please find below some preliminary useful advice and sound recommendations, based on our 20 years of experience:
In the first place, I would like to kindly stress the point that estate agents are currently desperate to sell, and they will not hesitate to use all sorts of commercial tricks to exert pressure on innocent buyers in order to pay a deposit blindly in advance. In fact, we are witnessing an increasing number of cases. Where the agents are trying, by all means, to convince their clients to sign “rubbish reservation contracts” under their own terms. Which on the majority of occasions are highly detrimental to the buyer’s, legal rights, and utterly useless at the event of a dispute in Court.
Therefore, the golden rule is that you must never pay a deposit blindly to an agent, seller or developer until an independent solicitor, – (like our firm),- has duly verified the background legal situation of the property beforehand.
Second, once we are satisfied that the legal situation of the property is ok. Then it is the Solicitor who must produce a homemade purchase agreement, and never the agent. The purchase contract must ALWAYS indicate that the seller will receive ALL the deposits, and never the agents. (unless they might have legal POA). Otherwise, in the event of a breach, you would simply lose your money, considering that an agent might easily go bankrupt tomorrow. The seller would not be liable as he would have not received any money at all.
Third, payment on the completion date must be made ONLY when the seller has provided with all the required final pre-completion paperwork and the breakdown of payments has been duly verified by the solicitor. Likewise, payment must only be done by banker’s draft at the notary when the title deed is signed, and never by bank transfer. Otherwise, if you simply transfer all the money before or you prepare a banker’s draft for the wrong amount and without taking the abovementioned legal precautions. You seriously risk that the seller might refuse to complete or that the property might be affected by unexpected charges or unpaid bills and debts that you will be liable to pay after completion. We strongly suspect this is what has happened in your case.
Fourth, we cannot sufficiently stress the point of the importance of double-checking the ownership and any charges, encumbrances or liens registered on the “land registry certificate” of the property as well as planning permission. All the property searches and investigations must be thoroughly performed to identify potential legal property issues. Searches will determine whether there might be any other hidden charges or encumbrances over the title of the property that might need to be addressed prior to signing any purchase contract. Remember that the property must be free of hidden charges before signing the title deed. Handing over of 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.
Fifth. – Beware of purchase contracts poorly drafted by the agent, as they will not protect your rights adequately. Likewise, do not pay any deposit blindly to the agent or seller, without having carried out a comprehensive legal study by an INDEPENDENT Solicitor, like our Firm, as explained before. Therefore, when buying property in Spain, it is absolutely crucial to put your trust only in an independent Solicitor, – like BZN LEX, – fully conversant on all aspects of the property conveyancing’s process.
Throughout our long professional experience, we have unfortunately witnessed a significant number of cases where the conveyance process has been irresponsibly carried out by unreliable legal advisors or agents. Who deliberately or inadvertently “fail” to detect hidden charges or encumbrances affecting the properties. Beware of this and remember that without proper and independent legal representation at the onset to negotiate your rights as a buyer. You could fall short of securing critical terms and agreements on the title deeds and contracts, such as the ones described before. Always avoid “low-cost” Solicitors or the use of solicitors that are on the developer’s payroll, as they will protect the vendor’s rights, not yours.
Bear in mind that having the ongoing help of an independent Law Firm like us that understands and respects the ins and outs of real estate legalities and more importantly that has your interests at heart, will give you complete peace of mind, saving you both time, money and trouble.
Our multi-lingual comprehensive Legal Reports offer independent and clear accurate advice, ensuring that relevant searches are rigorously carried out at the local town hall and land registry. Tracking all property records, investigating any possible problems affecting the property, and making sure that no claims are listed against the property.
In fact, for what ends up being only a small fraction of the amount buyers spend on purchasing a property. And considering how much is at stake, – a regulated qualified lawyer is absolutely crucial and worthwhile.
In short, always put your trust in a trustworthy independent regulated Solicitor, like our Firm, who will always be by your side. We are trained to handle your situation, which will help ensure that your case is properly dealt with. Which in the end will guarantee that the outcome will be in your favor. As indicated before, going without one could ultimately result in much greater costs, and it could turn your dream of living in Spain into a real nightmare. 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!
IV. HEAR FROM OUR CLIENTS
Our clients say it best. If you are considering whether BZN INTERNATIONAL LAW FIRM is the right law firm for you, please don’t take our word for it. Please see our client’s testimonials (https://bestsolicitorsinspain.com/testimonials/) to hear about the client experience with us. If you kindly check our testimonials section of our website, 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.
V. CONTACT US for a Consultation: Our First Response Team
We hope you find this information useful. Remember that this is not intended to be specific legal advice, just a general overview. As independent lawyers, we can help you both by assisting you with all legal issues as well as carrying out a comprehensive background legal analysis on your consultation or problem, if required.
Should you be interested in receiving more specific information or simply getting an independent 2º opinion, you can contact our firm in several ways:
- 1. Call us or send us a WhatsApp now at (0034) 687 88 88 73.
- 2. You can also use our e-mail form at the top of the sidebar of your screen, or alternatively, you can send us an e-mail to info@bestsolicitorsinspain.com
Our commitment, we’ll respond to your e-mail inquiry in less than 24 hours.
We are on social media. Follow us on:
a).- Facebook: BZN Lex International Lawyers@oscarricormorales7
b).- Twitter: https://twitter.com/BznLex
c).- and linkedin.com/in/ricorabogados
Finally, thank you very much for your attention, and in case you have any questions or doubts at all, again please do not hesitate to contact us. We would like to stress the point that you will be in good hands, and you can be reassured that we will look after your interests in the most committed and professional way.
We look forward to helping you and the benefit of our “know-how”.
Kindest regards.
Mr Oscar Ricor
“NON-PRACTISING ENGLISH SOLICITOR IN ENGLAND AND WALES”, under the “Solicitors Regulation Authority” (SRA) SRA number 519196 and practicing Spanish Solicitor
