Legal Process for buying a property in Spain
Once you have chosen your property it is essential to arrange a full legal check with an English speaking lawyer to protect your own interests. This ensures that the seller is the legal owner of the property, and therefore has the right to sell. Your lawyer will also provide you with a Nota Simple which confirms if there are any outstanding debts or loans against the property.
To purchase a property in Spain you must have a Spanish tax number or NIE (numero de identificacion extranjero), your lawyer can arrange this for you.
Option Contract (Opcion de Compra)
After both parties have agreed a price for the property and unless you are paying in full and in cash immediately, it is advisable to sign an Option Contract.
This contract will contain details such as the age and size of the building, the purchase price and date of completion, there will also be a description of the property. In addition it will state which party is responsible for paying what. Once this contract is signed the completion can be organised.
The deposit is payable when signing the Option Contract and the standard deposit is 10%. This will be held in a bonded client account until the specified completion date. This contract is legally binding and therefore your deposit will be lost if you withdraw from the purchase. If however, the seller decides to withdraw, you are entitled to twice the value of your deposit as compensation.
Deeds of the Property (Escritura de compraventa)
On the completion date, the outstanding balance (purchase price minus deposit paid) and all fees must be paid by the buyer. The buyer and the seller then sign the compraventa contract which is the equivalent to the Deeds of the property. The purchaser is then issued with a copy of the public deed of conveyance (escritura) in the presence of a Public Notary who is the official required to witness the deed of sale. The original signed escritura is always kept in the notary’s office. A copy is passed on to the tax office and also to the property registry. The keys will be handed over at this point.
Registration of the Property
In order to register the property in your name, you must provide proof of payment to the land registry office of the relevant purchase taxes. After completion these taxes must be paid within a period of 30 days, this will be arranged by your bank if you have a mortgage or otherwise by your lawyer. Late payment will result in a fine from the tax office.
As the owner of a Spanish property you must have an account at a local bank with sufficient funds to cover the normal running costs. Standing orders will need to be set up for water and electricity bills etc.
It is advisable to take out a house insurance policy to cover any potential problems. This can be done with the bank or through an insurance company.
New EPC Legislation
EPC´s (Energy Performance Certificates) or CEE´s (Certificado de Eficiencia Energètica) are becoming mandatory for all properties for sale for let as of 1st June 2013.
Having been mandatory in countries such as the UK since 2006, the new legislation passed by Royal Decree 235/2013 on 14th April 2013 is one of the first steps to bring Spain in line with European Guidelines for energy efficiency, a global response to the growing ecological concern.
The EPC is a document rating the property’s energy efficiency based on a number of factors such as size, build material, age of boiler, type of insulation etc. and it quantifies the energy required for lighting, cooling and heating. The EPC is easy to read at first glance as it begins with a colour coded graph with a sliding A to G scale and an arrow pointing to the rating the property has been given. Along with the determined ´score´ of the property is an estimated cost of utility bills and furthermore, suggestions on how to improve the property’s energy efficiency and how much the bill payer could save by effecting the suggested changes.
The responsibility for the EPC will primarily fall on the owner. However it is also the responsibility of the sales agent or lettings agent to advise the property owner of their new legal obligations.
Fines for not having the EPC in place will range based on the type/use of the property and could be any amount between 3000 Euros and 600,000 Euros.
A qualified Energy Assessor can produce the EPC and prices will vary, mainly depending on the size of the property.
The EPC is valid for 10 years however the owner can chose to update their EPC at any time during this 10 year period if they deem it necessary, following any improvements or major structural changes to the property.