Spanish Property Contracts-With all the talk about house prices in Spain we thought it would be a good idea to run over a few tips for purchasing a home and some things to look out for. The housing market in Spain is a bit up and down at the moment so take your time before you rush in to any purchases. The golden rule of purchasing from a selection of apartment rentals in spain is never sign any legal document until you have had it checked over by your solicitor. If you are in a hurry and sign any document, you will be committed to the contract and without professional advise you may find that if if you want to buy the property, the terms of the contract, including the tax position may not be to your advantage. Over zealous developers and property agents may thrust any number of documents in front of you and this could include any of the following:
An official offer to purchase the property. This is a formal letter of offer. If the person selling the property accepts your offer, this creates a legally binding contract to proceed. At this point you will usually be required to hand over a deposit ( 5% of the property value is about normal).
A Reservation Contract This type of contract will take the property off the market for anywhere between 2 & 4 weeks, this gives your lawyer time to make all the necessary checks on the property. At this stage, you will usually pay a reservation fee of approximately £2000-£3000. If you do not proceed with the purchase for any legal reason, you should be able to obtain the return of your deposit although this can sometimes be a rather a lengthy drawn out process. If you change your mind, just because you no longer wish to purchase the property, then you will loose your deposit.
A preliminary contract(contracto privado de compraventa). This is the full property purchase contract. It will bind you in binding the property, even if you find out at a later date something that you are not happy about.. When you sign this document, you will be asked to pay a deposit which is usually 10 % of the purchase price although in some cases, it can be more.
As mentioned above it is not advisable to sign any type of documentation until you have had it checked over by a solicitor. Your solicitor will be able to alert you to any danger signs relating to your property purchase and will be looking out for any of the following:
- Does your chosen home have good title
- Are there ant debts attached to the property.
- Has the building be constructed legally with all the necessary planning consents obtained
- Does the property have any structural defects
- Does anyone else holder a stronger right than you to purchase the property
- If the property is in course of construction, will the developer provide you with any guarantees
- Are you confident that any planning application for renovation or repair will be agreed by the Spanish authorities
At the present moment, property prices are falling a little in Spain, there is a surplus of property on the market and there should be no need to rush in to signing a contract. If someone is pressing you for a quick sale, there may be a reason, so be careful
If you decide to buy a property in Spain and require holiday home insurance, including insurance for holiday letting, contact Assetsure for a quote.