We strongly advise that you use a lawyer when buying a property in Spain. Assuming that nothing will go wrong is not wise when you are talking about buying a property and investing a significant amount of your life savings.
Some clients appoint gestorias instead of lawyers as they are usually a lot cheaper, without realising that gestorias are not qualified to practice law and therefore the client is not sufficiently protected in the event of any legal problems. We recommend you appoint a lawyer who recognised by their local College of Lawyers (Colegio de Abogados).
If you do not have your own lawyer and require a recommendation, we can certainly recommend one (or two if necessary, with at least one being based in the area in which you are buying) from our panel of experienced tried and tested lawyers. Over the years we have worked with many lawyers from all over Spain and the islands. As in any profession, there are good lawyers and bad lawyers. In our view it is worth investing in an excellent lawyer who will act professionally and diligently on your behalf and put your interests above all else, as they should of course.
Lawyers we recommend have well-established relationships with local notary offices, town halls, land registries and other parties involved in the legal side of the house-buying process. All lawyers we recommend are both English and Spanish speaking.
The legal process
Below is a step-by-step guide to how the legal process works here in Spain. This is meant to serve as a guide rather than being a definitive process. The steps can vary slightly depending on the circumstances and lawyer involved.
1. A bank account is set up by or on behalf of the client in their name. It is essential to have an account with the bank arranging the mortgage.
2. Once the client has chosen a property, they are usually asked to sign a Reservation Contract (Contrato de Arras) and transfer a holding deposit to reserve the property and possibly additional amounts to cover third party adviser costs, such as upfront legal fees. The holding deposit could be €3.000 for example, which is often non-refundable. A further deposit, usually 10% of the property price, is normally paid to the vendor once the bank has approved the mortgage finance and the legal checks have been done (see step 3 below).
3. The lawyer will contact the vendor to obtain the details of the property and any legal documents relating to it, following receipt of which they can start carrying out the necessary legal checks. These checks normally include:
– Contacting the Land Registry to see who is the rightful owner, the size of the plot, the built area on the plot, and if there are any financial debts relating to the property.
– Contacting the “Catastro” – the body that measures the plots etc. and then calculates the local taxes. They provide the lawyer with a confirmation of the built area and the plot size, as well as if the land is urban or rustic, along with its classification, for example, Class 2 Protected.
– Contacting the local Town Hall to check that all local taxes are paid up-to-date, if any plans for new buildings have been granted, or if any plans to urbanise that area or any surrounding areas have been granted.
Note: if the client is interested, a structural survey can be arranged, although there would be additional costs (see Structural surveys and valuations).
4. When all the checks are done, the client may need to arrange payment of the upfront legal fees, if these have not been paid already.
5. The vendor signs the Private Purchase Contract (Contrato Privado de Compraventa) in the presence of the Lawyer(s) and receives their deposit. At this point, a deadline for completion is fixed.
6. When the time comes for completion, the lawyer will make sure that the client has a detailed breakdown of expenses and therefore knows what money must be in the account in Spain.
7. Once the money is transferred, the lawyer will then liaise with the bank, ordering the necessary cheques/cash. If the lawyer has not provided the breakdown, then the client should discuss this with them. It is not the mortgage broker’s responsibility to provide the full breakdown. They can obtain mortgage costs from the banks and provide a guide to the other costs, but a full breakdown should be provided by the client’s lawyer.
8. Finally, the day for completion arrives and the lawyer will either accompany the client to the notary office for the signing of the deeds or attend on the client’s behalf with a signed Power of Attorney (POA) (‘Poder’ in Spanish). At this point, assuming everyone is in agreement, the deeds will be signed, the cheques distributed and the keys are handed over.
If you would like us to provide you with the contact details of one of our trusted lawyers or have one to contact you, please do not hesitate to ask.