Buyers Guide

Page 3

Your abogado should also check: If the property is on an urbanizacion, that the urbanizacion is legal and registered and has been adopted by the Town Hall. The Plan Parcial will show all the plots on the urbanizacion and if it is legal and with the Town Hall to check for proposed new roads and developments. Make sure the seller has the final Escritura Publica if not exercise extreme caution.
Making a Private Contract:
Hopefully now both parties are in agreement so a private contract for the sale can be drawn up. When your lawyer has drawn up or approved this Private Contract, you would normally be expected to put down a 10% deposit. Your lawyer should pay the 10% to the vendors lawyer. This contract is then legally binding, your 10% deposit is non returnable, and the vendor is legally bound to sell the property to you at the agreed price, the rights of both the buyer and seller are protected, it is a very fair system.

The contract will usually specify a completion within one month, [but other periods can be agreed to suite both parties] and the penalty for not doing so [usually loss of your deposit]. Normally a property will not be withdrawn from the market until the 10% deposit is paid The private contract should include all the points covered in the negotiations and it should also state that the property is sold free of all mortgages, liens and embargos, that all bills are paid up to date and all the household equipment [listed] will be in working order.

Your lawyer should also check:
That the IBI receipts are all up to date. [more about this later] , the certificate of Referencia Catastral, the number should be on IBI receipts, make sure any community fees are paid up to date, and likewise electricity, water and telephone bills are paid.
Rubbish collect charges [basura] be a nasty surprise as bills can have built up and are subject to additional fines and surcharges.
Important Notes:
Only the persons [or a company] named on the escritura [title deed] of a property can own that property, only those persons [or the company administrator in the case of a company] or persons empowered by a power of attorney [Poder] can sell the property

It is not advisable to make any payment to any agent or agency.
Your lawyer should always deal directly with the vendors lawyer, and you should always know who the vendor is.
Only documents and contracts in Spanish are fully legally binding in Spain, never sign anything until your abogado has approved it.
Declared Value: It used to be common practise to grossly under declare the sale price in order to reduce the 7% transfer tax ITP on resale properties or the 7% IVA on new properties and capital gains taxes of up to 35%.

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