Buying a property overseas for many people is a dream come true. It is the result of many years of planning and is the beginning of a new chapter in the lives of people re-locating to Spain. It is no less of an achievement either for those buying a holiday home.

As with any significant investment, you want to know that both you and your money is protected. That is why we always recommend you take independent legal advice from a firm like Sun Lawyers. With almost 40 years’ of experience assisting people with buying property in Spain, we make sure your private purchase contract protects your interests.

Finding your dream property

By the time you are viewing properties seriously, you should ideally have done your Power of Attorney with your lawyer so that you have your NIE number(s) and your bank account open.

Once you have found your dream resale home and agreed a price with the vendor, you should expect to sign a reservation contract with the estate agent. At this time, you will also pay a reservation deposit which will remove the property from the market. This acts as a protection and prevents other interested parties from putting in any counter-offer on the property.

The legal process starts

You will need to tell the estate agent which law firm you have appointed to represent you. The first set of checks that a lawyer will do after the reservation contract is signed will be to ensure:

• The property is fully listed on the land registry.
• The property is debt free (save for any mortgage that the current owners may have).
• The owners have the legal right to sell the property.
• There are no other rights or claims outstanding that will stop the smooth transfer of ownership.

Assuming all of these points are fulfilled satisfactorily, the lawyer can begin to draft the private purchase contract.

Private purchase contract

The contract will include the following within it:

• The details of the buying and the selling parties.
• The agreed purchase price.
• The condition of the property at the point of signing.
• Documents relating to the sale that the vendor will need to have such as habitation certificate, proof of payments for alterations, licenses etc.
• Penalties for backing out of the agreement.
• When the signing is to take place.
• How any disputes that may arise will be settled.

The contract will be drafted in Spanish. Unless that is your native language, one of the most important roles of your lawyer is to translate the contract into your language. Once this is done, your lawyer will run you with through the clauses in the translated contract to make sure you are 100% happy with what is being signed.

Signing the private purchase contract

Once the contract has been agreed between the parties, it can be signed (either by you or by your lawyer if they have Power of Attorney). Upon signing, the purchaser will pay the balance of 10% of the purchase price (a deposit payment minus whatever the reservation deposit was).

At this stage you can start to relax and begin the detailed plans of your new life in Spain.

Pulling out after the contract has been signed

A standard clause in the contract (Article 1454 in the Civil Code) states that if the Buyer pulls out of the purchase, they forfeit their deposit. If the Vendor pulls out, they are to return the deposit AND the same amount again. This is a significant penalty and has the effect of ensuring that the vast majority of signed contracts go forward to successful completion.

If you have any questions about purchasing a property in Spain or the conveyancing process, please contact us at admin@sun-lawyers.com