Finally buying your dream house in Spain is an exciting time, however the legal process can seem daunting. The more you know about the property and the legal process the better. Knowledge is power and ignorance can prove to be expensive!
Below is a guide to ten basic steps that should be carried out before you complete your Spanish property purchase.
1. Instruct a good lawyer
Before taking any formal steps in relation to your property purchase you should instruct a good Spanish lawyer. Your lawyer should be entirely independent from the estate agent or any developer so that you can be sure they will work solely to protect your interests and not that of any other party.
Ask for their registration number and check that they are registered with the relevant bar association.
You should also check that your lawyer has professional indemnity insurance so that you are covered should anything go wrong.
Unless you are fluent in Spanish you should ensure that you lawyer will be able to advise you in English and that you will receive accurate translations of all documents connected with the purchase. Your lawyer should also have experience dealing with international transactions.
2. Check the ownership of the property
Make sure that the names of the registered owners of the property match the information you have about the sellers. (Sounds obvious but you would be surprised!)
This information can be found on a report known as the Nota Simple which is a report provided by the Land Registry in Spain and provides information about the property. This report can be translated into English for an additional fee.
3. Check the property description
Check the details regarding the boundaries, the total square meters of the land, and of the house if there is one. Again this information can be found in the Nota Simple. You will need to ensure that this information matches the information you have about the property and what you have actually seen. (Never buy a property without actually going to see it first- You may laugh but this happens!)
You should also ask your lawyer to advise you of what rights other people may have over the property, such as public paths/roads, water or sewage lines.
4. Check the property classification and relevant laws
You should check how the property is classified for example whether rural (rústico), urban (urbano), or urbanisable (urbanizable). This is particularly relevant in relation to the infamous Valencia Land Grab Law (LRAU) used to compel owners of rural land to either surrender part of their land or contribute significant sums towards local infrastructure (for more information about this see our article Land Grabs in Spain).
Your lawyer should advise you of whether the property you wish to purchase could be affected by the LRAU or similar laws. You should also check when buying rural land is not reserved for agricultural use and that full permission has been obtained for residential use.
If you are considering buying a coastal property you will need to be aware of the specific laws that may affect it. Properties have been built on public coastal land without the required consents. Owners of such properties can face the prospect of having to seek permission (which is not always readily granted) to remain in a home they purchased in good faith. Your lawyer will need to advise you whether the property you wish to purchase could be affected by such laws and to obtain the necessary certifications.
5. Get a survey done
Having a surveyor check a property before you buy it is just as advisable in Spain as it is in England. If you wouldn’t buy a home in England without a survey, don’t do it in Spain.
If your walls do not provide the structural support they are meant to or your swimming pool starts sliding down the valley, you may find that the relatively small cost of a survey would have been money well spent. (Worldwide Lawyers can assist you if you require any further information about this or if you would like details of surveyors in Spain)
6. Check there are no debts against the property
Check whether the property has debts, such as mortgages or unpaid taxes. You will need to know this information and be satisfied that these will be discharged before you purchase the property.
In Spain such debts are attached to the property rather that the individual so ensure that your lawyer obtains proof that the vendor has paid all his obligations, including mortgage, all utilities, taxes and any applicable community fees. Ask to see receipts as proof of payment.
7. Check building permissions are complied with
It is not uncommon for resale properties in Spain to have extensions or additions that were carried out without planning permission and are not registered in the deeds. However you will need to check this with your lawyer and check that any such alterations are identified, and legalised before you proceed to buy.
8. Check you know the extra costs of your property purchase.
You should ensure that you know the cadastral value of the property and how much purchase tax will be due. Tax is charged on the council’s valuation of the property and not the amount of the sale. You can check this at the regional government’s online tax agency site using the cadastal reference number.
You should also check what ongoing costs will be associated with the property and that this is something you can realistically afford.
9. Check if there are any building restrictions
If you wish to buy the property for its development potential ensure that you have checked the latest town plan to see if the plot you wish to buy has any building restrictions, whether it is in a green zone or includes a public pathway etc.
This information is provided at to the town planning department of the local town hall.
10. Check out the rental restrictions
If you are planning to let your property as a holiday property on a short-term basis, you must ensure that you are doing so in accordance with Spanish law. The regulations on letting holiday homes vary depending on the region where the property is located.
Even if you are not planning to rent out the property yourself, you should bear this in mind as this could impact on the resale potential of your property.
Ask your lawyer to advise you of what the local rules are before you buy and check if there are any specific rules for your property such as those set by the committee of the apartment block for example.
The marketing of private residential property to tourists is strictly regulated in many regions and those doing this without complying with the legislation can be liable for significant fines.
This list is not-exhaustive and there is not substitute for the advice of a property qualified and experienced independent lawyer.
If you need help to find a lawyer to advise you in relation to your Spanish property purchase, contact Worldwide Lawyers who will be able to connect you to an English-speaking reliable lawyer in Spain.
Watch our You Tube video on Spanish Property Law here.