CASE LAB OF THE WEEK: IMPORTANT LEGAL TIPS WHEN BUYING A PROPERTY IN SPAIN. UPDATE
Dear clients and readers,
The subject of today’s post is of great importance to foreign investors willing to acquire property in Spain. In fact, we have recently received an enquiry about property conveyance, which speaks for itself. We ought to clarify that it is not an exception and we are receiving similar queries every week. Where agents receive the deposits and later on they refuse to return the money to its rightful owner. Consequently, due to its inner interest, we have copied below the most relevant fragments of the client’s consultation:
THE ENQUIRY
“Dear Mr Ricor: (…) The offer for the sale of a house in (…) has been posted on the Internet for a long time. In October 2023 the price has been reduced. Agent (…). Real Estate claimed that he was negotiating the price with the owners and would complete the transaction. On October …, 2023 the agent again showed the house where we signed the “Contrato de Arras Penitentiales”. In October …, 2023, he notified me that everything was settled and all owners agreed to sell the house for EUR (…) (“…Everybody is happy with the price…”) – only then did I make a transfer to EUR 5,000.
In January 2024, the agent did not want to allow the property to be appraised – he said there was a problem with the owners. He didn’t tell me about it earlier. Only on January 23, 2024. I learned that the owners had not signed the house sale contract at all, and they collected the keys from the agency on November 28, 2023. This means that the Agency is illegally holding my money of EUR 5,000, the contract was signed only with the buyer.
The agent concealed from me the lack of a contract with the seller and the fact that the owner took the keys from the agency. Agent from the moment of signing the contract on October 28, 2023. he hid the truth from me. He knew that the house would most likely not be sold. On January 29, 2024. I wrote a letter to the Agency in which I described the entire situation and I called for the immediate return of EUR 5,000 for failure to fulfil the obligation to transfer ownership. To this day I have not received any response or money. I believe that I was deceived by the Agency. And I have no claims against the owners of the house. I have all the correspondence with the Agent which shows that he was not telling me the truth. M. W”
THE SERIOUS RISK OF PAYING AN UPFRONT DEPOSIT TO UNREGULATED AGENTS
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). However, 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 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.
Second, I would like to kindly stress the point that many unreliable Spanish estate agents are currently desperate to sell at the moment. And they will not hesitate to use all sorts of commercial tricks to exert pressure on the buyers to pay a deposit blindly in advance.
In fact, we are witnessing an increasing number of cases, where Estate 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, and utterly useless in the event of a dispute in Court. Therefore, first, the golden rule is that you must never pay any upfront deposit blindly to an agent or seller until an independent Solicitor has duly verified the legal situation of the property beforehand.
MORE USEFUL LEGAL TIPS WHEN BUYING PROPERTY IN SPAIN
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 be a crook (like it happens in your case), or the agent might easily go bankrupt tomorrow, meaning the seller would not be liable as he would have not received any money at all. Furthermore, in the event of a dispute, if the agent has received the deposit. The buyer would be obliged to sue the agent in court, and which cost could likely exceed the amount of the deposit actually paid.
Third, payment on the completion date must be made ONLY when the seller has provided all the required final pre-completion paperwork and the breakdown of payments has been duly verified by the solicitor. Otherwise, if you simply transfer all the money before or you prepare a banker’s draft for the wrong amount 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.
Fourth, Therefore, when buying property in Spain, remember for future reference, that 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 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
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. It will give you complete peace of mind, saving you both time, money and trouble. Our multi-lingual comprehensive property 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.
Bear in mind that our standard fee for assisting our client with a standard property conveyance, – (where the is no legal dispute at all and subsequently, the stress and problems encountered are much lower), – is always very fair and reasonable. (The fee would vary depending on the price, kind of property, – that is rustic or urban, – legal services hired (that is standard basic service for a full package with the Spanish wills included, fiscal representation, etc.).
However, in those cases, like the one explained in this post. Where the buyer has already paid a deposit and there is already a serious legal dispute. Unfortunately, the fees are always higher, due to the gargantuan amount of legal work,- (they are truly much more time-consuming than a standard conveyancing case). Not to mention the significant legal responsibility involved, all irrespective of the financial value of the dispute (5.000 euros or 50.000 euros).
CONCLUSION
To sum up, due to the fact that there are unfortunately a significant number of crooks’ unregulated agents freely operating in this area who, are desperate to sell and get their commission. Our sound advice for all our readers is to be always extremely cautious, never accept any kind of pressure and seek for independent legal advice. Remember that when choosing a property Solicitor, it is not just the price but the confidence of hiring the best and having complete peace of mind for your property investment. Just to save just a few euros at a “low cost” a dubious advisor might have dire consequences later on…
This morning, for example, we received an enquiry from another client who has paid a lot of money to another Solicitor for the conveyance (more than 1,800 euros), and yet 3 months after completion. She does not even have electricity at the house, and she believes the property is illegal, (the Solicitor is washing his hands). She needs our help in order to solve all the problems left unfinished by the other supposed so-called “specialist” solicitor, who was in reality representing the agent’s interests.
PUT YOUR TRUST IN A TRUSTWORTHY INDEPENDENT REGULATED SOLICITOR
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.
If you kindly check our 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.
HOW TO CONTACT US FOR FURTHER SPECIFIC ADVICE?
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 conveyancing 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 about property conveyance or simply getting an independent 2º opinion? (Either about this particular subject or any other), 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 might have any questions or doubts at all about the property conveyance process, 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. BZN LEX INTERNATIONAL LAWYER
