BEFORE YOU START The legal work for a property conveyance takes substantially less time to process here than in the UK, and it is quite acceptable for one company to undertake the conveyancing for both vendor and purchaser. You do not have to hire a lawyer for property matters such as buying and selling – a gestor or conveyancer can do the job equally well, and all estate agencies and construction companies can either point you to a reliable source, or have in-house teams to handle this aspect of the property purchase for you.
Once you have found the property you want to buy, the first step is for the vendor/s and purchaser/s to sign a Private Purchase Contract. This secures the property for you, and it is at this time that you will be expected to provide a deposit (usually 10% but can be less if both parties are in agreement). You should give some thought to the date you wish to complete the transaction – the Contract stipulates the title should be conveyed on or beforea certain date, so this can be brought forward by mutual agreement.
Should you wish to purchase your property with the aid of a Spanish mortgage you will need a NIE number (click here for NIE information), and the bank will wish to carry out a valuation of the premises. You can usually borrow up to 70% of the purchase price, but do “shop around” as this can vary from bank to bank.
Private property valuations are much less usual here than in the UK, but are recommended if the property is over 25 years old, or a finca (old style townhouse or farmhouse), or you see what could be foundation cracks running through the premises. Cosmetic cracks and fissures are common in Spanish properties and usually indicate natural movement or stress due to subsequent building work.
The next step is to carry out a search on the property to check there are no embargos or debts you could unwittingly inherit. For this you will need, at the minimum, the name of the current owner and property address. The search is forwarded to the appropriate Land Registry Office, where details of all the property transactions for the region are held. The seller should furnish the buyer or their agent with a copy of the existing Escritura – this does not have to be the original as a new Escritura is prepared for each conveyance to a new owner. A copy of the last IBI (Rates) receipt will also be required to carry out the local authority checks (see below).
Should the current owner have a mortgage on the property, this must be discharged by the relevant bank on or before signing the new Escritura. It is possible to “transfer” a mortgage from the old to the new owner, thus avoiding legal and possible penalty costs in discharging the mortgage; the bank in question will be able to provide more information should this be of interest to the new owner. At the same time, a search should be carried out at SUMA, the official municipal tax collectors for the Tax Office, to ensure there are no outstanding tax debts on the property in respect of Rates (IBI) and/or Rubbish Removal (Exacciones Municipales).
The existing Escritura is checked, and a copy sent to the Notary Office where the new Escritura will be signed. This does not have to be the Notary whose office is in the same geographic location as the property; the new Escritura can be prepared by any Notario. Details of the new owner are provided, together with confirmation of the Declared Value of the premises, and an appointment is requested on a specific time and date for completing the conveyance. Don´t forget that if you are purchasing the property with a Spanish mortgage, the bank manager will also have to attend the Notary Office to sign the Mortgage deed, so he/she will need to be available at that date and time.
In the past it has been an accepted practice in Spain that the “Declared Value” that appears on the Escritura is less than the actual purchase price of the property. Recently the authorities have been tightening up on this and we and our lawyer now insist that you now declare the full purchase price.
If furniture is to be sold by the seller a private agreement between the buyer and the seller can be made but this is outside the legal process.
It is the vendor´s responsibility to provide receipts for the utilities and taxes. This has a dual purpose of ensuring the correct details are changed into the new owner´s name, and also so any outstanding bills may be apportioned between the seller and buyer. If the property is part of a Community or Urbanisation, a Certificate must also be obtained from the Administrators to show the Community fees have been paid and are up to date.
If purchase funds are being transferred from the UK, or a Banker´s Draft and/or cash is needed from your Spanish bank, make sure this is ordered in good time, and allow at least an extra day for unforeseen delays. If you are declaring a value different from that of the actual purchase price, it is customary to provide a Banker´s Draft for the Declared Value amount and cash for the balance.
