I. Before signing the contract
Before the signing of any
contract, the seller has to present a series of documents for your
verification.
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Original or
complete copy of the public deed of the sale.
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Certificate of
title, which displays any burdens and debts. The certificate of
title is obtained from the
Property Registry.
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In the case of
the seller not being the owner of the property, they must present a
power of attourey
which authorises them to act in the name of the owner.
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Contracts for the
supply of water, electricity, gas and other contracts of suppliers,
together with the
most recent payment documents.
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Payment documents of
the most recently paid IBI (Spanish property tax).
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In acquiring a property
in a community of owners, the president of the same should present you with the following:
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Statutes of the
community of owners.
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Title
of establishment of the community and the declaration of partition.
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Payment receipt of the communal charges and quotas of the present
proprietor.
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Written certification by the president of the
owner community,
that there are no debts to
any third party and that the property you are acquiring is up to
date with the communal charges and the corresponding quotas.
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Necessarily, the
seller must provide a detailed and signed inventory list of
furniture, electrical
appliances and installations.
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Application for a NIF
(in necessary) by the chartered accountant.
II. Private contracts
Sales contracts for properties in
Spain do not have t be notarised in order to be legally effective.
The ownership of a property can, as a consequence of a verbal
contract and the handing-over of keys pass to the buyer. This also
applies to preliminary contracts.
In the case of a breach of a
private contract, buyer and seller can take legal action in order to
have the terms of the contract judically fufilled or demand
compensation for the breach. For this reason it is a common
procedure in real estate transactions in Spain, to sign a private
contract before signing the notarised public deeds. This contract
should include all parties and the purchase price. It must be signed
by both parties on all pages. Here we use the following type of
contract:
Reserve contract / option to buy
It is a private prliminary
contract in which the seller is legally bound not to sell the
property to any third party during an agreed amount of time and on
demand of the buyer, to sign the notarised bill of sale in exchange
for the payment of the outstanding amount of the purchase price. For
this the buyer makes a down-payment; the amount depends on the time
arranged for the reserve. Usually down-payments consist of 5-15% of
the final purchase price. The signing of such a private preliminary
contract is especially convenient for those who need more time to
obtain financing and after that long search, wish to reserve their
dream property. When such a contract is concluded it is advisable to
declare the down-payment as "arras" (down-payment) according to
article 1454 of the Código civil. This legal regulation specifies
that in the case of a breach of contract a certain amount of
conscience money must be paid by the liable party. If the buyer
cannot guarantee the financing and consequently is unable to go
through with the purchase, they would lose the down-payment. On the
other hand if the seller fails to comply with the signed contract,
for example by finding another buyer who is prepared to pay more,
they would have to pay the buyer double the amount of the down-payment
as compensation. What is stipulated as "arras" gives more security
to the buyer whilst guaranteeing that the seller will reserve the
property until the stipulated date, because if not, it would cause
him grave financial harm.
III. Public deed of sale
What is commonly known as
"Escritura" is a notarised sales contract which is not a requirement
for a legal transfer of title, but is necessary for the registration
in the Spanish property register. The Spanish notary simply
notarises what both partie state and previously enquires via fax if
the seller is registered as the owner. He then sends another fax
with the essential facts to the property register, which
automatically activates a block, which means that other notarised
deeds cannot be registered in the property register. A notary in
Spain has the sole function of documenting what both parties state,
which is why it is advisable to obtain competent professional advice.
IV. The registry of the property
and the register of the deeds of sale
In Spain you can obtain a
property without registering it, but the property register is
granted a very important role in Spain. The register publicly
declares that the person registered in it is actually the legal
owner. This is how the registered seller protected in the case of a
goodwill sale. For this reason you have to take into consideration
that according to Spanish legislation, a public deed is made and the
consequent registration by the buyer is essential, as it is the only
true proof of official ownership.
The notarised deed must be
presented by the buyer or their representative, with the receipts of
the notary charges and the payment of the IVA (VAT - value added tax)
to the tax office.
Now the registry official can
procede with the registration. The registration can take some weeks
but it is protected against third parties by a note of warning.
