Conveyancing in Spain: 7 key issues for a safe purchase

Are you planning to buy a property? The prospect of purchasing a property can feel overwhelming. The right conveyancing in Spain will be your piece of mind. The goal of this post is to summarize, in a simple and understandable manner, the main issues related to a successful purchase.

We must distinguish between the legal process of buying a newly built property and a second-hand property, which may imply some different aspects when doing the legal searches as well as when drafting/negotiating the private purchase contract.

1.   Property legal check

The purchase process starts with the legal searches of the property. This is an extensive and thorough check to be carried out by your trusted solicitors. Make sure this is done prior to committing yourself to the purchase of a property and signing any kind of legal document.

The process for conveyancing in Spain starts with the the land registry check, by requesting a “nota simple” for the dwelling you intend to purchase. By doing this, the following information is obtained:

• Who appears within the land registry as legal owner of the dwelling.
• The legal description of the dwelling: urban land/rustic land, square meterage, boundaries, location, quote of participation in communal areas towards community expenses.
• If there are any seizures, limitations and/or debts (such as mortgages).
• If there are any urban fines registered.

2. Property urban check

Conveyancing in Spain continues with the related search at the urban department of the corresponding townhall where the dwelling belongs to. This becomes a crucial check when the real description of the property doesn´t match with the legal description reflected on the purchase deeds and/or land registry´s “nota simple".

If for example the seller has had an extension done on the property after he purchased to affect internal distribution of the dwelling to be purchased, living areas, outbuilding, glazed balcony, a swimming pool has been built, etc. The latter should appear within land registration, as otherwise a “declaration of new construction built” is to be undertaken in some cases, and indeed in all cases specific documentation will need to be supplied by the seller, depending on the work carried out (i.e., building license, legal panning permission, authorization from community of owners’ administrator, etc.).

If the object of purchase is a rustic property or piece of land, it will be indeed essential to carry out an in-depth study of the local town planning legislation to which the property is subject within the conveyancing process.

If the object of purchase is an off plan property, the conveyancing process will consist of reviewing architects projects registered within the corresponding townhall, permissions and licenses approval to start the building process and terms given/agreed, etc.

3. Property cadastral/fiscal check

Another check within conveyancing in Spain is with the Cadastral Department, body under the authority of the Ministry of Economy and Finance. It will have a tax impact on local rates/council tax due, specially in those cases when an extension has been done after the owner, now selling party, purchased the property.

4. Negotiation and drafting of the private purchase contract

Once buyer and seller have agreed the terms and conditions of the house purchase, it is reflected on a legal binding contract for both parties to sign and fulfill.

The most important aspects to be agreed in a private sale and purchase contract are:

• Price of the sale and purchase.
• Deposit payment to be met to take the property off the market.
• Stage payments (agreed when the signing of the Public Deeds is not to take place in the short term).
• Deadline for the signing of the transfer of ownership public deeds in front of the agreed notary public in Spain.

If you are to purchase an off plan dwelling, builders will, in most cases provide buyers with their contract, which is most cases will leave less options to a negotiation process. Stage payments to be met to the builder will have to be secured by the builder through its corresponding bank guarantee. A 10-year guarantee for defaults on construction together with the finalization of the building work deeds will need to be in place before the public deeds are signed in front of the notary public.

5. Utilities and other payments to property conveyancing in Spain

On a resale property purchase, before completion, you are to ensure that all the utilities are up to date and that no invoices are pending. If the dwelling is located within a community of owners, it is essential to obtain a certificate of non-debt prior to the transfer of ownership.

Another important check within the purchase conveyancing process is to ensure that local rates/council tax bill is paid up to date.

Should the property to be purchased be a new built construction and therefore bought from a developer, they will provide you with all the necessary documentation for the connections of the main supplies.

6. Other related aspects involved in property purchase

Another essential aspect of a purchase is the obtaining of the NIE number. Said fiscal number is required, by Law, for each purchaser, and will allow him/her, among other uses, to submit and pay all the necessary taxes related to the property. The NIE number will also be necessary in order for the client to open a Spanish Bank account, which itself will be needed for the purchase and subsequent payments (taxes, utilities…).

The two last steps to be followed before completion in front of the notary public are the drafting of what is commonly called a “final breakdown of costs” document, which will reflect all the figures of the transaction and the form of payment of the purchase, and the preparation of the deeds with the notary’s office.

On completion day, you will need to attend the notary’s office, where we highly advise you to be assisted by your appointed lawyer, who will not only verbally translate the purchase deeds for you but also ensure a smooth transaction process. If you cannot attend in person to the signing of the public deeds, it is highly recommended to grant a Power of Attorney in favor of your chosen lawyer.

7. Choose the right professionals

We understand it is essential to be guided by qualified professionals, experts in real estate law. We at Adriana Pérez Legal Services place our extensive experience at the service of our clients by providing them with a total guidance from the day they choose their dream home, to the day they get to hold the keys; this way making sure that this achievement does not become a daunting task for the client.

Once completion has taken place, APLS Legal Services will register the clients with the Spanish Tax Authorities, will submit the purchase related taxes, register the client’s ownership with the Land Registry and will also proceed with the change of names and the set-up of the direct debit of the utilities. Should the property purchased be a new built, our law firm will proceed with the first connection of the mains and will subsequently set up the direct debits for their correct payments.  

Should you decide to buy a property, we will be delighted to assist you through the entire conveyancing in Spain and make the entire process easy and simple for you. If this is the case, do not hesitate to make contact with us!