Legal Advice »
We are a professional real estate company whose primary focus is to take care of our clients. Therefore, unlike other estate agents on the Costa del Sol, we act with the highest level of integrity and avoid any form of conflict of interests. We do not follow any immoral business practices, such as employing an in-house lawyer or including legal cots in the purchase price.
We strongly advise all clients to instruct an independent lawyer before proceeding with the purchase of a Spanish property.
For most of us, property represents a considerable part of our assets, so it is essential for buyers to instruct a lawyer to protect their interests. This is particularly relevant to international buyers, who may not be fully familiar with local taxes, customs and regulations. Sellers also benefit from the involvement of a lawyer because they will simplify the conveyance process and can advise on taxes applicable to non-domiciled owners.
If you require a recommendation on which law firms to approach (or avoid!), please let us know. Over the years we have come across many lawyers and we know the ones who are professional and provide the best service. Needless to say, we do not get any form of referral fee and would be happy to provide two recommendations if necessary (with at least one lawyer being close to the property of your choice).
The lawyers we recommend have considerable experience, are fluent in English and have well-established relationships with local registries, planning departments, notaries, tax offices, etc.
Tips before instructing a Lawyer:
The following are our key tips before instructing a lawyer in Spain:
- Do not rely on the fact that a notary will be involved. In Spain a public notary is necessary to transfer title, to grant powers, make a will, etc. Although notaries are generally well qualified and carry out a public function by ensuring that formalities are met, buyers should be aware that the notary is a neutral figure who does not advise individuals as clients, nor will a notary negotiate contracts on their behalf. For this reason it is crucial to instruct a lawyer to protect your interests.
- It is not suitable for an international buyer or seller to instruct a “Gestoria”. Gestorias are Spanish consulting firms which specialise in filing documents and dealing with bureaucracy. Although they are cheaper and may be useful for straightforward matters, it is not advisable for international clients to instruct them for conveyancing. A gestoria may be useful for some minor matters, such as renewing a driver´s licence, changing title on a vehicle, paying bills, etc. However, they are not lawyers and cannot advise on laws, taxes and regulations. They are also not covered by insurance in regards to professional negligence. This is particularly relevant because property law is not straightforward and the tax requirements of non-domiciled owners are complex.
- Ensure that your Spanish lawyer is local and has experience in advising international clients. It is not the best strategy to instruct a lawyer in your home jurisdiction because 99% of the legal work will take place in Spain. You will need a lawyer who is local (it is not necessary to employ the closest lawyer, but he should be based in the vicinity or province of the property), so he will be familiar with local notaries, registries, planning regulations, taxes and so on. In addition, your lawyer should be fluent in English and familiar with advising international clients, because the tax and inheritance rules applicable to international owners are very different to those applicable to Spanish residents.
Guide on the legal process in Spain:
The following is a guide on how the conveyance process generally works in Spain.
- After your offer is accepted by the vendor, it is best to speak with a lawyer from the outset before paying a reserve or a deposit. If possible, it is also recommended to speak with a lawyer before you look for properties to ensure that you are familiar with the process and that all your documents are in order.
- When the vendor accepts the offer, it may be necessary to pay an initial reserve of anywhere between €3-7k depending on the value of the property. This will ensure that the property is temporarily taken off the market until a deposit is agreed. The buyer should ensure that his lawyer is content with all the initial paperwork before paying a reserve to the other side.
- After a reserve is paid, your lawyer should undertake a throughout due diligence before signing the agreement and pay a deposit of circa 5-15% of the purchase price. The value of the deposit would depend on the terms agreed between the parties. It is essential for buyers to ensure that the purchase price is locked and that their lawyer explains the mechanics of the convincing process.
- In case it was not sorted out before, your lawyer should accompany you to a Spanish notary in order to grant a power of attorney to authorise him to act on your behalf. Thereafter, your lawyer should assist with obtaining the NIE number (ID number for foreign nationals) which is necessary for selling or purchasing a property in Spain. If you are not in Spain, it will be necessary to grant the power with a local notary (and obtain an apostille to make the power valid in Spain).
- It is best practice for the lawyer to carry out all the legal checks before paying a deposit and completing the purchase. The scope of the legal due diligence will depend on the location and type of property. For example, the checks for a flat in a community will be different from those of a new-build villa in the countryside or close to coastal land. However, in most instances it will include checking with the land registry and the tax office that there are no charges or debts registered against the property. In addition, it may be necessary to contact the Town Hall to ensure that the property is in conformity with local laws and has a first occupational licence.
- Depending on the property, the buyer may desire to instruct a surveyor to carry out a structural survey or a valuation. A survey is not always required in Spain because developments have a 10-year insurance for structural defects. Moreover, communities also have their insurance to cover communal parts. However, it may be advisable if there are cracks, damp or any other symptoms that raise concern. In addition, a survey is generally advisable for stand-alone villas (instead of flats in a development).
- There are two main types of deposit in Spain: an option whereby the price is locked and the vendor cannot walk away and the “arras”. The latter is more favourable towards the seller and does not close the deal 100%, because he can return twice the value of the deposit to the buyer and walk away. This may occur if he finds another buyer who is willing to pay a higher price. The choice of deposit is largely dependent on the skills of the lawyer and the size of the deposit.
- If a buyer is securing financing with a bank, he should ensure that the deposit is paid only after having a mortgage pre-approved or if the purchase is made conditional upon financing.
- After the interim contract is signed, the deadline for completion is fixed. In the meantime, the lawyers will finalise the paperwork and calculate all the taxes and sums to be paid.
- Completion takes place before a Spanish notary and it is when title is passed to the buyer. On such date, the parties´ lawyers will simultaneously exchange the keys and the certified cheques. Exchange can be made by the parties directly or via their respective lawyers if they granted a power of attorney. If there is a mortgage registered against the property, a good lawyer should ensure that the charge is cancelled on the same day before transferring the title.
- On completion the buyer acquires the keys and can now enjoy his property in sunny Spain!
- Last but not least, the buyer´s lawyer will ensure that all taxes are paid and that the title is later registered in the land registry (in addition to other standard post-completion tasks). Moreover, a good lawyer should ensure that all the accounts for community fees, water, electricity and council tax are transferred to the name of the new owner.
Please contact us if you would need for one of our recommended lawyers to contact you or if you have any queries in regards to the legal process of purchasing a Spanish property.