Buying Spanish Property: the Legal Procedure Explained
November 5th, 2009So youve found your dream holiday home, arranged your mortgage in Spain and are now ready to complete the purchase
Many foreign countries have different regulations regarding the buying and selling of property; this includes Spain where such transactions are regulated. As such hiring an English speaking lawyer would be advisable. Make sure that the Spanish property is free of restrictive clauses and debts.
The legal process for purchasing property located in Spain falls under two types of transactions. First you have the preliminary contract, or Contrato privado de compraventa, and then you have the completion contract, or Escritura de compraventa.
There should be a preliminary private sales contract signed once you have both agreed on a purchase price. Before this Contrato privado de compraventa has been signed, however, the vendor needs to be able to provide proof that he or she owns the property, and that it is free of any charges. In Spain, debts are attached to the property, so any mortgage that was outstanding would transfer to the buyer. Nota Simple documents are designed to confirm whether or not a property contains any outstanding debts.
Details to be included in the draft sales contract will include the date of closure, agreed upon purchase price and a detailed accounting of the property being purchased. When you reach this point, you can expect to pay a deposit of 5-15%. These funds will be held for you in a bonded client account. You can sign the private preliminary sales contract and not put down a deposit but it is not advised.
The ultimate stage is the decond stage only as it will decide the future of the contract. It is also known as Escritura de compraventa stage. The purchaser will be required to pay the balance of the purchase price and all fees on the date of completion. Next, the seller and buyer meet and sign a contract, which is essentially a claim to the property. The buyer will be provided the public deed of conveyance, also referred to in Spain as the escritura, in the presence of a Notary Public. A copy of this deed will also be passed to the tax office and to the property registry as well to make everything legal. In Spain, all deeds of sale must be witnessed by a Notary Public, which is a public official in that country. However, you need to have your own legal counsel to protect your own interests during the transaction. Also keep in mind that as the purchaser you will be required to pay property sales taxes as well as the legal fees for the Notary Public.
