Valencia Trader

Property purchase procedures in Spain

THE PROCESS OF BUYING PROPERTIES IN SPAIN

RESERVING YOUR PROPERTY

Once you have found a property you wish to buy, it is essential for you to sign a preliminary sales contract with the seller, and paying a reservation deposit of usually around € 6.000. This contract is proof that the property has come off the market, and that you are able to buy it. Once the property is reserved in your name with a preliminary sales contract, there is usually between 15 and 30 days for lawyers to gather information on the property regarding land register and legal issues. This is necessary in order to verify whether the title deeds for the property are satisfactory, whether the person selling the property is authorised to transfer their ownership and to ascertain that the property is also free from any pending charges, mortgages or debts.

If you are buying a plot of land, a survey of the land can be carried out, in order to obtain its exact measurements and to identify its borders. This study will include details on whether the land has been classed as ‘buildable’, on its access points and on its surface. Likewise, it will provide information on the different building possibilities and on the ‘buildable’ area, including a detailed plan that will form part of your final title deed. The lawyer should ensure that the developer has all appropriate legal permits: building license, land survey (an independent surveyor will check that the foundations designed by the architect are adequate for the type of soil,) an independent check of all building works by specialists and, finally, the ten-year warranty (similar to the British N.H.B.C.).

In the case of developments, the lawyer should obtain necessary bank guarantees to protect your payments, should the developers fail to comply with any of their obligations. Should the lawyer checks unveil any legal obstacles which affect the buying process, the lawyer should ensure that the initial deposit you paid is returned in full by the selling party. In any case, and as part of the process, the lawyer should run checks on the reputation and solvency of the builders/developers, obtaining guarantees that the property will be built and handed over in the terms and conditions established.

PRIVATE CONTRACT
Once the checks on the property have been made, and after guaranteeing that the legal situation of the property allows the sale to take place, you can sign the so-called Contrato Privado (Private Contract). The Private Contract is an important document containing information on the buyer and the seller, the description of the property on the land register, the price of the sale, the method of payment, the date the contract is formalised, the date you take possession of the property, etc. Once both parties have signed the Private Contract and the deposit has been paid - usually 10% of the price of the property minus the reservation deposit-, the contract becomes a legally binding document. This deposit can be up to 30% in the case of "off plan" properties.

COMPLETION
The property sale process is finalised before a Notary, with the buyer and seller signing the Deed of Sale. The Notary is a public official. His or her duty consists in identifying the buyer and the seller, and ensuring that all legal requirements have been met, and that the amount due to be paid has been settled. If you are unable to be present in the finalising of the deeds, your lawyer should take care of it by means of a power of attorney, which means they can carry out all necessary procedures in your name. It is common practice for the lawyer to have a valid power of attorney at the beginning of all buying and/or selling operations.

TAKING POSSESSION AND HANDING OVER OF KEYS
Immediately after the deeds have been signed, the buyer is handed the property keys, and can take possession of the property.

FINAL TITLE DEEDS AND PROPERTY REGISTRATION

The property registration procedure entails the payment of all the taxes applicable to the property and the obtention of the final register stamp for the Title Deeds, which guarantees the transfer of the property. This procedure may take two to three months, depending on the Property Register, though your lawyer should take care of the entire procedure, informing you when the Title Deeds have been processed before the Property Register and are at your disposal. This procedure is an important step, and takes place just after you have taken possession of your property.

UTILITIES
Immediately after the sale has been finalised, you should request your lawyer to take care of ensuring all the property's utility contracts (electricity, water, rubbish collection, etc.) are under your name and for all your bills to be paid by direct debit from your account. Electricity: This is billed every two months. Town Water: This is billed every three months Refuse collection: These are usually billed every 2, 6 or 12 months depending on the area Community Charges: These are agreed by all the owners of the community at a general meeting.

COLLECTING DOCUMENTS
Once the Property Register has returned the Title Deeds, which could take up to three months, you should collect it from your lawyer, together with the rest of documents you must keep (N.I.E. -Spanish ID no. for Foreigners-, Title Deeds, Insurance Policy, etc.).

Information courtesy of "Spanish Living Group"