I feel compelled to preface this article by stressing that buying rural property in Spain has associated higher legal risks as opposed to buying urban property; specifically when it comes to buying a dwelling. Over 80% of the bad press we read abroad on Spanish property is directly related to rural land i.e. illegally built houses on rural land under threat of demolition.
The main reason on why people take chances with their money and buy rural land is because the urban counterpart of a rural property is normally 60% higher. In plain English, you get more bang for your buck buying rural than urban, but this comes at the expense of legal security. Some people do not mind, or simply cannot afford urban property, but I thought it was worth pointing it out from the outset.
Another point worth mentioning, which is a common blunder amongst foreign buyers, is that the are stringent planning permissions for building on rural land. Building a house in a plot of rural land should never be taken for granted. Legal advice should be sought beforehand always. Unlike in other countries, rural land in Spain is thought to grow food, not to build houses.
Sure, living in the countryside appeals to many (myself included), but make no mistake, a campo house, from a legal point of view, is completely unlike buying a home in a consolidated urban area. Which goes on to explains the enormous difference in price tag for two properties of similar characteristics and plot size, one built in rural land and the other on urban land. You can also expect to sell the urban counterpart mush faster than a rural property, which could take several years. Also securing a mortgage against a rural property is fairly challenging, which limits the pool of buyers, restricting it in most cases to only cash buyers.
In today’s article I focus on the eight main tips on buying rural, but obviously there far more points to watch out for. Whilst I normally recommend hiring a conveyance lawyer to buy property in Spain, when it comes to investing on rural land, it is simple compulsory. Under no circumstances should a foreigner attempt to buy rural land in Spain without being represented by an independent lawyer. If you do, you are only setting yourself up for a nasty fall with your hard-earned money.
Eight tips on buying rural land in Spain
1. Property registered under the seller’s name
This may sound as a fairly obvious point, but quite often than not I’ve found out the person who had the property listed at the estate agency was not the registered owner. This can be explained for a number of legitimate reasons i.e. the registered owner has passed away recently and the inheritance tax liability has not been sorted out yet. Until the Spanish IHT is settled, the property cannot be registered, mortgaged, or sold by his beneficiaries.
2. Is the Title deed accurate? Moreover, does a Title deed even exist?
It may come as a surprise, but do not take a Title deed for granted when it comes to rural land. Indeed, Title deeds may not even exist. As a rule-of-thumb I recommend walking away from any rural property that has no Title deed. The legal nightmare is seriously not worth the aggravation.
Should a Title deed exist, it is frequently outdated and inaccurate. The golden rule is not to buy rustic property (in fact any type of property) until a vendor has fully updated all the missing details at the Land Registry (at their expense) to the buyer’s lawyer satisfaction. Unregistered extensions have repercussions on seeking finance.
3. Are there charges, encumbrances, liens or debts against the property?
Self-explanatory. Any debts go against the property itself, not against the owner i.e. an outstanding mortgage would be a financial lien against the property. Debts and charges always follow the property, and the new owner becomes liable for them. This is why it is the conveyancer’s duty of care to ensure a Title deed is handed over clean. Deed restrictions create limitations or obligations on the property use that a would-be buyer should be made aware of prior to acquiring the land.
Rural property abounds with easements, unlike its urban counterpart, due to their own nature. Some common examples:
- Right-of-way: adjoining plots of land may have a lien to facilitate access to a neighbour’s property. Another example: Shepard’s may have a right (consuetudinary law) to enter your property at certain times of the year to herd their flock (transhumance).
- Hunting rights: your land may subject to cynegetic interests and turned into a hunting ground during the shooting season. Be prepared to collect all the spent cartridges.
- Right-of-view: this encumbrance caps the building height on the plot of land so as not to impede the views of an adjacent plot.
- Right to extract water: from your private well or from a stream running through your property’s boundaries.
4. Is the property description accurate (land registry and catastro)?
Rural properties, more often than not, are inaccurately described at both the land registry and the cadastral registry. Typical discrepancies include but are not limited to:
- Plot size: frequently real-life measurements differ (significantly) from what is reflected at both the land registry and catastro. This is why on my eighth tip I strongly recommend a chartered surveyor is commissioned to carry out a surveyor’s report where such discrepancies would come to light.
- Inaccurate property description: as mentioned above in my second tip, we can think of extensions or refurbishments made to the property which have gone unregistered by the owners to the point a dwelling’s footprint has been illegally increased.
- Boundaries: rustic properties’ boundaries are hazy at best. Limiting the boundaries of a plot of land using neighbours’ names long dead is not exactly ideal. This can be highly confusing. Another example is that rural land is frequently demarcated by white boundary stones (‘mojón’) or some iconic landmark (old tree).
5. Rural villas and the legal loophole of ‘Casa de Aperos’
I feel compelled to emphasise this point as it affects scores of rural landowners and may in fact lead to criminal prosecution by the state.
Some owners, either out of (inexcusable) ignorance or else purposefully, abuse the planning system using a legal loophole (‘casa de aperos’) to circumvent planning restrictions to build on rural land. Traditionally Spanish Authorities were lenient, to the point nothing was done for decades. However. over the last years the Government has taken a firm stance clamping down on all who build on rural land earmarked as unfit for development.
The most common example is when an owner of rural property applied for a licence to build a tool shed (‘casa de aperos’ in Spanish) of 3*3 m² to store the tools to plough the fields. The landowner purposely exploits this legal ‘loophole’ to circumvent planning limitations and build a rustic villa instead. The reason a landowner would breach planning laws and risk prosecution is because a rural plot of land stands to appreciate significantly on building a villa.
This may lead to local Authorities threatening with a demolition order, at the owner’s expense, besides imposing heavy fines and even face prosecution in the most serious cases. Almost every case we read in the press of expats facing a threat of looming demolition relates to what I have just explained.
A buyer’s lawyer will determine if a rustic villa does indeed have planning permission from the local town hall. If it doesn’t, then I strongly recommend a buyer walks away from it to avoid a legal quagmire. Buyer beware of webs advertising rural property with planning permission, most are just clickbait.
6. Does the property comply with town hall and regional planning laws?
This carries on from the previous point. It is essential your conveyance lawyer ensures the rural property complies with both local and regional planning Authorities.
The impact on people’s life’s on having two administrations squabbling over planning competencies cannot be overstated enough.
7. Is the property connected to the mains? Does it have access to its own running water supply & utilities?
A surveyor’s report will highlight, for example, if a property is connected to the mains drainage. Frequently rural properties are not connected to the mains sewage and have their own septic tanks in use which leads to problems as these must be emptied every few years to avoid ‘overflow’ and ‘seepage’ problems, not to mention health-related issues.
Additionally, few rural properties are connected to the electric grid. It is very important a would-be owner fully understands what utility connections are available – if at all – and its limitations i.e. power surges. It is commonplace rural properties have their own generators which bears severe restrictions on the use of household appliances leading to shortages or even power cuts.
8. Hire a chartered surveyor
I have badgered relentlessly over the previous seven points, with practical examples, on the usefulness of hiring a surveyor. In my opinion it should be mandatory when it comes to buying rural property. The benefits of commanding a survey far outweigh its cost. Any problems will be quickly picked up by a seasoned professional. This (in)valuable report can be then used by your lawyer to know what weak points to watch out for and which are likely to give problems down the road. The lawyer will then use this insight to his client’s advantage as leverage on knowing what should be negotiated and worded into a Private Purchase Contract. Bear in mind that conveyance lawyers seldom visit properties; we only examine the associated legal paperwork.
Conclusion
Buying rural land in Spain is fraught with problems, it’s a legal minefield. You will need the support of a seasoned conveyance lawyer; his insight and advice will far outstrip his fee (which is 100% tax-deductible on selling, by the way).
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