Legal Guide (Spain)
Formalising Your Offer
Once there is
a verbal agreement between the parties, the next step
will be to formalise the terms of the offer in writing.
It is normal practice in Spain to include with the offer
a reservation deposit until exchange of private contracts.
This initial deposit (which may be
up to 10% of the sale price) will normally be held in
a clients account either with the agent or your legal
adviser. The money is not given directly to a private
vendor until completion.
Be aware that the system is a bit different
from the UK in that a verbal offer is considered binding
and that you may be taken aback by the speed at which
you are asked to sign and pay over a deposit. You should
take legal advice from a professional lawyer in either
Spain or England if you have any doubts about what you
are signing.
Estate agents are usually reliable
but remember the responsibility lies with you when you
sign anything. Make sure everything is done in English
as well as any other language if you are not fluent
in that language.
Exchange of Private Contracts
Upon agreement
of the price between the parties the paperwork will
start.
There are two basic types of contracts :
One is simply an option to
purchase. This is exactly what it says it is
and the money handed over by you will be lost if you
do not exercise that option by a particular date. The
vendor usually agrees to take the property off the market
for that period of time so that you cannot be gazumped.
There is often an agreement that if the vendor pulls
out he will compensate the prospective purchaser.
Check whether the money you pay for
this option is deducted from the ultimate sales price
or an extra. This is usually more common on new build-developments
and we have a similar reservation system in the UK.
The second type of document is a private
contract of purchase and sale (called
contrato privado de compraventa). This document sets
out all the terms and conditions of the purchase. There
might be terms which are not mentioned in the document
but which are implied by the laws which regulate these
sorts of transactions. If you have any doubt again check
with your legal adviser. If he is in the UK you can
fax through easily from Spain. A translation of the
document should be provided in English for you.
Click
here to see a checklist of what a good contract
should contain.
NIE Number (Tax Identification)
If you reside
in Spain or are buying a property you will need a NIE
( Numero de Identificacion de Extranjeros). In some
areas this is being replaced by an NIF (Numero de Identicaion
Fiscal).
This number identifies
you to the Spanish tax authorities and is required when
you pay your taxes or have any dealings with them. Buying
a property will involve some taxes.
It is obtained at the
local Spanish police station where you will need to
produce your passport and two passport photographs.
This can be done by your lawyer on your behalf.
Completion
Your legal advisor
will guide you through this process and prepare the
paperwork ready for completion. On an appointed day
it is usual for you to go to the Notary’s Office
together with the vendor, sign the contract and pay
your money in person. If you cannot manage this then
you can give your legal advisor or someone else power
of attorney on your behalf.
It is vital that you employ a reliable
legal representative wherever you are buying and that
you also find out as much as you can yourself.
