Legal Buying Procedure
Legal Buying procedure
When you select a property to purchase you will need a copy of the Nota Simple which specifies according to Land Registry what you are buying and what is registered and to whom. To understand ongoing costs of your potential, purchase a check of yearly IBI (Council tax costs) and level of community charges where applicable should be made. At this point you should appoint a Spanish lawyer who can also check the seller is the owner and basic legal enquiries are made before you part with any money.
The legal implications in Spain of signing a purchase contract
Private Purchase Contracts as part of the buying process in Spain is the equivalent to an exchange of contract in other countries and holds the same legal implications. It is normal at this point for a 10% deposit to be passed to the seller. At the point the contract is signed the buyer becomes legally liable to complete within the stated timescales or risk losing deposits and or incur late payment penalties. The seller is now legally obligated to sell the property at the agreed price.
It is at signing of purchase contract it is also agreed what expenses will be picked up by the buyer and what fixture and fittings form part of the sale and the price.
A purchaser should before signing a Private Purchase Contract have decided exactly who will be buying as it is difficult to add or remove buyers in Spain after this point.
What to expect at completion of your Spanish Home?
Completion for a property purchase in Spain is undertaken in the offices of Notaria Publica. All parties connected to the completion in Spain, including any bank personnel for redemption or subrogation of an existing loan the bank providing a new mortgage, and seller or their legal representative must be in attendance to sign. Either the buyer and or the buyer’s lawyer must also be present.
In the event the Buyer attends in person without their legal adviser being present the Notary will insist you either are fluent in Spanish or have an attendant with you who is. Before completion you will need to understand and ensure you have accounted for all costs, have sufficient provision of funds required for costs and taxes and all relevant cheques, or bankers’ drafts have been written and are available.
Signing on day of property completion what can I expect?
When signing at the Notary for a purchase, if you intend to attend in person patience can be required. It is not unusual for there to be delays and not unknown for one of the parties required to cancel, in which case the signing cannot take place and must delayed. Never assume signing will happen on the day booked and leave sufficient time in Spain to allow for delays.
The notary will check all paperwork and again it is not unknown for them to raise issues and require clarification on points and suspend the signing until these have been sorted. You or your power of attorney will be required to have a certified passport or original passport and original NIE certificates available. The notary will also require to see evidence of the full monies required for completion and be able to verify their source. You can avoid completion day personally by appointing a Spanish lawyer who has power of attorney to sign on your behalf.
What happens after signing and what is the legal process of registration of ownership?
After signing at completion, a copy of the deeds are given to the buyer or their legal representative by the Notary. The originals are sent to land registry to be registered. The registration process can take up to three months. After registration the original deeds and all invoices relating to the transaction become available.
Why do I need to check registration has correctly taken place?
You should always check that registration has taken place and get into your possession or pass to your lawyer in Spain for safe keeping, the originals of all documents and invoices. If you wish to sell in the future these will be required for the sale and to ensure you do not pay Spanish capital gain tax on costs incurred at purchase through lack of evidence of these costs.