Property Guides and Information for the Costa del Sol, Spain

The Toolbox: Tips for Buying Spanish Property

Here is a summary of some of the more important points that we feel will help you make the right property choice:

1. Payment of reservation and deposit monies: The most secure bank account is in a registered escrow account agreed between the parties to the sale, or vendor’s lawyer’s client account. Although not technically an escrow account, it is bonded as lawyers have very restrictive rules governing the monies given to them for custody.
2. Breaking contract: In most cases the amounts paid are non-refundable. The only grounds you may have for breaking the contract is if your lawyer has inserted the ‘subject to’ clauses such as “subject to valuation” or “subject to mortgage”.
3. Conveyancing: Always use a Spanish lawyer who speaks your language and ensure that they have translated the purchase contract so that you are aware of the terms and conditions. Ensure that they gather the required information together on your behalf to allow for a complete background check on the property.
4. A correct property description: It is vital to make sure the description of the dwelling corresponds to the one you are buying. Have your lawyer carefully check the details, location, internal dimensions, etc from the Referencia Catastral.
5. Mortgages or any charge registered against the property: An existing mortgage on the property is quite normal in Spain so do not be surprised to find one: all contracts include a clause stating that the seller sells free from any charge (and encumbrances, tenants or occupants) including mortgages. Although a mortgage can easily be cancelled ensure that the cancellation costs of the mortgage are borne by the seller.
6. Date of completion: If you are raising funds, agree a completion date far enough ahead to gather fees. It is normal for buyers to exceed this date due to banking delays in swift transfers and clearance of drafts. Be careful, always get your lawyer to negotiate a new time frame on your behalf and ensure that you have any new agreement in writing. The contract will always establish a completion date; the seller can stick to that date, resolve the contract and keep your money.
7. Costs of purchase: It is common practice that all costs are borne by the purchaser, however, traditionally the plus valía is paid by the vendor unless otherwise agreed.
8. Inventory: If the sale includes furniture or other items, check the inventory list to make sure it is in line with what has been agreed. The inventory must then be attached to the contract, therefore forming part of the contract.
9. Community minutes and statutes: Read the statutes and minutes from the community of owners. They can give you a good idea if there are any problems in the community and what the community rules are (particularly relevant if you have pets).
10. Use a recommended currency broker to save you money while you are transferring money from your home country to your Spanish account. We can recommend brokers.

April 20, 2006 | Category: Buying Property