PURCHASING PROPERTY IN SPAIN: FREQUENT MISTAKES TO AVOID
Dear clients and readers,
Are you considering purchasing a property in Spain? Do you wish to avoid facing potential legal problems?
In the affirmative case, we are sure you will find this article of your interest.
In the first place, we would like- if we may- to kindly introduce our Law Firm as fully independent conveyancing experts with more than 20 years of experience, in dealing with all kinds of complex Purchase processes of a property in Spain.
We are receiving an increasing number of consultations mainly from international investors experiencing all kinds of problems when buying property in Spain. In fact, we have recently received an enquiry from a couple who has encountered serious problems after buying a property in Spain. (Please see an extract of the email below). Consequently, we have considered it appropriate to write this article hoping that it will help all our readers.
A REAL CONSULTATION
“Hello, we are a Canadian family, recently retired and moved to Spain on May 2022. We decided permanently to settle in Alicante and started to look to buy an apartment. On June 2022 we made an offer for a suite for 92K euros and transferred 3K euros to the Agency to reserve it. Later on, a contract has been created that we signed. Meantime the contract had been amended and signed by the owners for the new price of 89K euros with a deposit of 6K euros. So we transferred to their bank another 3K euros.
We decided to go with it and started transferring the monies from our Canadian accounts to our Spanish bank account. A day before the notary appointment we have been told by the owners that there is a problem with the documentation, so we met to resolve the issue amicably, but we couldn’t. The next day we prepared the cheque at the bank for the buy. However, the buy had not been done and we got an official document from the notary that the deal failed as the seller did not have a proper document for the property. We officially asked the Agency to return only our 6K euro deposit, but to date, they haven’t.”
We had a lawyer who did the contract and represented us, as we do not speak Spanish. In our opinion, the lawyer agreed to all the conditions the realtor had and did not protect our interests fairly. As he did not check the status of the property. One month after the cancellation, we were told that we will have a result within a week, but to date, we are still waiting for that to happen, and we cannot register the property at the Land Registry. We cannot see a solution to our situation. And we lost not only the 6K euros down payment but 10K more when we redeemed our investments on loss. We paid the lawyer’s fee and also the monies on rent. We need your help to resolve the issue in court”.
OUR PRELIMINARY LEGAL OPINION
We ought to say that as specialized property lawyers, we frequently come across these kinds of consultations. Where the innocent buyer has been the victim of an unscrupulous and greedy agent or developer. Consequently, the primary goal for writing this new post is twofold:
First, to warn potential buyers from committing serious pitfalls that could seriously transform your dream of living in Spain into a real nightmare.
Second, to strongly remind all our readers to always seek independent legal advice from a specialized Lawyer. And never to use the one recommended by the agent, who is not independent and he is frequently on the agent’s payroll.
IMPORTANT LEGAL TIPS
In the first place, we would like to kindly stress the point that as a result of the covid and the Ukraine crisis combined, (where the economic situation in Spain is worsening dramatically at present), estate agents are currently desperate to sell, and they will not hesitate in using all sort of commercial tricks or dubious tactics, aimed to exert pressure on innocent buyers in order to ask them 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.
THE GOLDEN RULE
Therefore, the golden rule is that you must never pay a deposit blindly to an agent, seller or developer until an independent lawyer has duly verified the background legal situation of the property beforehand. If the agent is trustworthy, be reassured that they will provide our firm with all the required paperwork in a timely manner.
Second, once we are satisfied that the legal situation of the property is ok, ONLY then is when it would be crucial to produce a homemade purchase agreement. The purchase contract must ALWAYS be drafted by the Solicitor and never by the agent. Likewise, it must clearly indicate that the seller will receive ALL the deposits, and never the agents. (unless the agent might have a legal POA). Otherwise, in the event of a breach, you would simply lose your money, considering that an agent might easily go bankrupt tomorrow, and the seller would not be liable as he would have not received any money at all.
Third, payment on completion’s date must be made ONLY WHEN the final legal paperwork has been received and the breakdown of costs has also been duly verified between the parties. Otherwise, you will risk having a serious dispute with the vendors at the notary, as it happens in the present consultation case.
Furthermore, the final payment must be made ONLY by the 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, you’ll risk that the seller might refuse to complete it or that the property might be affected by unexpected charges or unpaid bills and debts that you will be liable to pay after completion.
Finally, please make sure that you open a fully operational Spanish bank account in your name BEFORE completion, because you’ll compulsory need it in order to transfer the funds required to pay the property as well as the money to pay the property taxes and related bills. (remember that the tax revenue office sets a short deadline of 30 days to pay the taxes after completion).
In conclusion, our sound advice if you are considering buying a property in Spain, is that you are always extremely cautious and do not accept any kind of pressure from the agent, and that hire the professional services of a fully qualified and independent Solicitor, like BZN INTERNATIONAL LAWYERS, as we will have your interests at heart.
Finally, should you be interested in learning more about this important subject, we would like if we may to kindly refer to our previous posts, which also contain further useful legal warnings as well as the steps involved in a conveyancing process in Spain.
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 property issues as well as carrying out a comprehensive background legal analysis on your property or problem, if required.
Should you be interested in receiving more specific information, (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 firstname.lastname@example.org
Our commitment, we’ll respond to your e-mail inquiry in less than 24 hours.
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Finally, thank you very much for your attention, and if you are considering of purchasing a property in Spain, and in case you might have any questions or doubts about purchasing process in Spain, 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”.
Mr Oscar Ricor
“NON-PRACTISING ENGLISH SOLICITOR IN ENGLAND AND WALES”, under the “Solicitors Regulation Authority” (SRA) SRA number 519196 and practising Spanish Solicitor