Hiring an independent Solicitor to represent your interests when investing in a property in Spain can save a lot of heartache.
If you are buying a house in Spain, for a more complete guide, please see: Buying a House in Spain
Principally an independent solicitor in Spain will ensure that all appropriate due diligence is carried-out. This broadly falls into two categories: ensuring that the seller has good title to sell and that the property has been constructed legally and having obtained all legally required licenses. It almost goes without saying that no property should ever be bought unless such checks are carried-out previously given the serious risk of losing your investment.
2Lawyer or Interpreter?
If you don’t hire a solicitor to represent you then the Notary who is processing the conveyance will ordinarily insist that you hire an interpreter so that you can understand what is being said. Since most of the language used has legal and technical ramifications, while you may get an English version from an interpreter, it is highly unlikely you will appreciate the legal importance of what is being said.
A lawyer will not only provide you with an explanation in English as to what is happening, but also guide you as to its legal relevance.
3Save Money on Travel
An independent solicitor will spare travel expenses as well. Hiring an independent lawyer gives you the option to sign a power of attorney and let your lawyer finalise the paperwork, thus avoiding the time and expense of returning one or more times to Spain in order to deal with the conveyance.
4Avoid Expensive Contractual Mistakes
There are a number of ways that you could end-up paying extra costs as a result of agreeing terms in a purchase contract – usually written in Spain – that are not in your favour.
For example, the vendor may try to make you agree to be liable to pay the costs of the Notary (often around €1000) when it is the vendor who is liable. Or they can try to make you pay the full year’s rates bill, when you are only liable for the portion of the year during which you are the owner of the property.
An independent solicitor will ensure an inventory is carried-out of any additional items included in the sale such as furniture. This avoids any disputes later on.
5Is the property really a bargain?
Once again, local, expert, independent advice often goes a long way.
Spanish construction companies during the 60’s property boom used a special process of adding aluminium to concrete to make it set faster and save money.
Years later however, it was discovered that this process caused aluminosis– especially in areas of high humidity – making the structure more porous and unstable as well as health issues. This type of local issue will be known to local lawyers and surveyors and may well explain why a property seems to be a bargain.
Other factors that may influence the value of a property include type of neighbourhood, height of the property (if an apartment), noise from the street, air pollution, natural light, terrace size, distribution of the rooms, age of the property, any refurbishment that will be necessary.
You should always insist on getting independent advice before proceeding.
6Avoid getting gazumped!
A typical way that a lawyer would protect you would be to insist on a pre-purchase contract (known as ‘arras’) which will stipulate that the vendor will lose double the amount of any deposit should they fail to proceed with the purchase – this can prevent gazumping and the consequent loss of money invested in expensive and time-consuming pre-purchase activity making several visits to Spain and time off work.
7Off-Plan Property Buyers Read This
Huge problems have been caused by constructors unable to finish the construction of apartments. So much so that legislation has been introduced by the Spanish Parliament to increase protection for purchasers.
When buying an off-plan property, it is vital to ensure that the constructor has the appropriate bank guarantees to protect the deposits provided by the purchasers.
If there is any suggestion that this is not the case then the best advice is to walk away. If you proceed in such circumstances and things to go pear-shaped, you may be lucky to be left with an option to pursue the bank for your deposit, but it will likely take several years to recover
8Want to rent your property to tourists? Be careful…
If you plan to rent out your property to generate an income from ‘tourist rentals’ you must ensure that a lawyer first checks any local restrictions that may be in place – at the urbanisation level and also at the regional level. Often it will be necessary to arrange a tourism license and these may be virtually impossible to obtain in the area that you are buying.
If you plan to operate a B & B (a common activity in Spain among expats) then you will have to obtain a report from an architect that the property may be used for this purpose. Your lawyer will also need to apply for an appropriate license and then make presentations to the local Town Hall.
This is a process that can take time and you may need to invest in refurbishment of the property to make the appropriate Health & Safety adaptations in order to comply with the regulations.
Your buying your dream home in the sun. Who wants to think about dying? Well, nobody really, but you should think about avoiding enriching the Spanish government as a result of faulty planning.
Inheritance tax should be an important consideration for most, a solicitor will be able to assist you with planning the most tax-efficient way to purchase the property and structure its ownership, as well as the future transmission of your Spanish assets to minimise any tax liability. Being involved from an early stage can be crucial in order to ensure the ownership is structured appropriately.
10Estate Agent Fees
When foreign purchasers of property have discovered their dream home, they are all too often to sign on the dotted-line. When the estate presents you with a simple enough looking document “just to take the property off the market” most would not consider any problems that might arise.
Unfortunately, our lawyers often come across the situation whereby purchasers sign a contract to the effect that they are going to cover the estate agent’s fees – regardless of whether the property conveyance goes ahead. This is clearly not what most buyers intend and if money is handed over on this basis, it can be a complex process to get it back. Having an independent solicitor to represent you from the very beginning is the only way to be sure that you avoid such liabilities.
If you would like to speak with an independent English-speaking solicitor in Spain regarding an upcoming property investment in Spain, just click on the ‘Contact Us’ button below to view contact telephone numbers and enquiry form.