Read this recommendations if you are interested in buying a house in Mallorca, a list of what to do and what to avoid from local experts.
It has to be said at the outset that buying a house in Mallorca is not always plain-sailing. The main problem here is dealing with one of those tricky – yet often obscure – issues that may turn your purchase into nightmare. Having spent many years advising house buyers in Mallorca on their conveyance, it can become a little disheartening to see the same mistakes being made again and again by non-locals.
This article deals with main Do’s and Don’ts for a safe landing on the Mallorca property market.
Sometimes these are relatively minor issues that are resolvable easily enough – once you are prepared to wade through the infamous local bureaucracy! However, other problems are much more serious and I have seen some unfortunate people being ruined financially by an ill-informed house purchase in Mallorca.
Below I have laid out some tips on avoiding some typical problems that tend to arise when buying a house in Mallorca as well as other more important matters to consider, that must be taken care of before proceeding with the exchange.
- DO ensure that the house complies with all the local planning regulations. It is not unusual to find in Mallorca houses, outbuildings, pools, porches etc… built without the relevant municipal licenses, which can represent a serious issue for the potential buyer – such measures that could be taken by the authorities range from a ban on renovating the house or to do any more works on it, to a huge fine or even a demolition order.
- DO request an inventory of furniture and a snagging list. If the house is sold furnished and, in particular, if you are paying extra for this, then our advice is that you request a detailed inventory of all the items that will be sold with the house. Likewise, and since properties are often sold as seen, we strongly recommend that all our clients get the house inspected by an surveyor so that this professional can ensure that it is in good condition and/or can draft a snagging list for any defects that should be fixed before the purchase -ie, stains of humidity, broken tiles, a/c not working properly etc.…
- DO request a “Nota simple” or Land Registry certificate. A land registry certificate is a document issued by the land registry where the house is registered. It not only contains a description of the house or the land where it is built on, but also a list of the mortgages and charges attached to it.
- DO inspect the house one more time before the purchase date. This is highly advisable. Although real estate agents often offer this service at no cost to the buyer, since they are mostly paid by sellers, it is always a good idea to confirm with them, directly or through your Spanish solicitor “abogado” that the house is sold in the same condition as when you visited it.
- DO NOT pay any money or deposit in advance before due diligence and before the signing of a deposit/option contract including all purchase conditions. During many years of practice as a lawyer I have seen people often advancing money to the vendor “to secure the house” before even knowing its condition or charges that might be attached to it, or before having reached an agreement on the final purchase price. It is also highly advisable to have the deposit transferred into an escrow account, with most of the Public Notaries in Mallorca providing this service for a small fee.
What Is Escrow?
Escrow is a legal concept describing a financial instrument whereby an asset or escrow money is held by a third party on behalf of two other parties that are in the process of completing a transaction. Escrow accounts might include escrow fees managed by agents who hold the funds or assets until receiving appropriate instructions or until the fulfillment of predetermined contractual obligations. Money, securities, funds, and other assets can all be held in escrow.
- DO NOT buy a house for which a mortgage is required before your loan has been approved by your bank. When a mortgage is required to complete a purchase, we strongly recommend to sign an option contract subject to mortgage approval, so that the purchaser may recover the deposit or withdraw without penalty in case that for some reason the mortgage application does not go through. We also recommend exploring your financial options with your bank to have all the information that is required before considering buying a house in Mallorca.
- DO NOT assume that real estate agencies will work for you or will assist you throughout the whole purchase process. Whilst most of the real estate agents in Mallorca are experienced professionals and know the market and the sales/purchase process very well, and they normally do not mind giving the buyer some advice, they are usually instructed by vendors. So, if you are not the vendor, if you do not have an estate agent working for you exclusively, and if it is the first time that you are buying a house in Mallorca, we strongly recommend that you use your own solicitor on the island.
- And finally, DO NOT sign any document that has not been previously translated to a language that you understand. Note that English is not an official language in Spain, so the vendor is not obliged to translate any contracts or documents produced in Spanish or in Catalan (also known in its Balearic version as Mallorquin) into other languages.
Finally, it remains only to be said that with the correct advice from an experienced local solicitor there is no reason why buying a house in Mallorca should not be a relatively simple process!