Buying a home in Spain looks deceptively simple: agree a price, sign a few papers, and collect the keys. In practice, the Spanish property buying process involves detailed legal checks that protect you against hidden debts, sitting tenants, planning problems and unclear contracts.
An experienced Spanish property lawyer will guide you step by step, coordinating surveys and reviewing every document so that what you buy in Spain matches what is actually registered on paper.
Conduct the property checks
Your lawyer will conduct several background checks:
- Who the legal owner is
- That it’s unencumbered by debts, charges, court judgements, unpaid taxes, liens, etc
- If there are sitting tenants
- That planning permission was originally granted, and any subsequent changes approved
- If it is subject to any special rules
- If a new home, that it is insured against damage arising from any structural defects
Conduct a survey
As soon as you’ve reached an agreement on price, instruct your surveyor to inspect the building and report back on any defects found.
- Armed with that information, you can renegotiate the price, considering the cost of repairs and replacement.
- The surveyor will also confirm that the property is the size and accommodation as described in the Title Deed Extract (Nota Simple) and the Catastral (Tax description). It's best to pass on a copy of the report to your lawyer.
- You should always ask the selling agent for the energy certificate (CEE), which will give an idea of the running costs of the property and what will be needed to make it more efficient.
Campbell D Ferguson, FRICS – Director. Survey Spain SL Network of Chartered Surveyors in Spain. www.surveyspain.com
Reservation agreement
The reservation agreement is the equivalent of ‘sold, subject to contract’ in England and marks an end to the property being marketed for up to a month in return for a reservation fee or holding deposit. This is usually between 3,000 and 6,000 euros.
It is normally a one-page document drafted by the listing estate agency or the seller. A reservation contract strikes the property off the market over the next 30 days. These security deposits are normally non-refundable unless expressly worded otherwise.
Reservation contracts are not an essential step in the buying process, but they are common. As long as the agreement is made subject to conditions such as satisfactory legal checks, building surveys, the ability to secure a mortgage, and so on, the risk is relatively low, and you should be able to get your deposit back if your conditions aren’t met.
For extra peace of mind, fees should be lodged with the vendor’s solicitor, not with the estate agent or property owner.
In any event, never sign a reservation contract or hand over any money without the thumbs up from your lawyer. Reservation contracts are more legally binding than you might expect.
More on this topic in our articles:
- Buying property in Spain from a private seller (Resale Property)
- Buying new build property in Spain from a developer (Off-Plan Property)
The purchase contract
This is the equivalent of exchanging contracts in England. It is essentially the point of no return, beyond which you will lose your money if you pull out.
There are several possible contract types, including the preliminary sales contract (contrato privado de compraventa) and the down payment contract (contrato de paga y señal), but most foreign buyers sign a deposit contract (contrato de arras).
This contract sets out the right of the buyer to purchase the property at a set price within a set timetable. The contract also specifies which fixtures and fittings are included, and which expenses the buyer and seller are responsible for.
- Both parties are penalised for pulling out of the agreement.
- The buyer would forfeit their deposit (usually 10%) if they cancelled.
- The seller will have to pay the buyer twice the amount of the deposit if he or she pulls out of the sale.
It is technically possible to write conditions into a purchase contract to enable you to pull out if, for example, the results of a bank’s valuation survey or your building survey turn out to be unsatisfactory.
Not surprisingly, these are unpopular with sellers. And when you do try to invoke such a clause, you may find getting your deposit back to be a long and expensive process.
More on this topic: Financial & legal repercussions of breaching an option contract (arras)
Sign the title deed
The equivalent of ‘completion’ in England takes place at the offices of the notary.
Representatives of all parties need to be there – not just you (or your legal representatives if you have given them Power of Attorney) and the seller, but also the banks providing your mortgage and the seller’s mortgage, for example. Even the selling agent is often there in order to ensure that they get their fee.
With so many parties involved, it’s not unusual for the signing to be cancelled because someone fails to turn up. In any event, expect a lot of hanging around.
The notary will check the paperwork and make sure you understand it, often by reading the entire document to you. If you are not a fluent Spanish speaker, it is required that you instruct an interpreter, who is often your conveyance lawyer.
If everything is in order:
- you (or someone with power of attorney) will sign the title deed.
- you will also make the final payment for the property on this visit and be given the keys.
- the notary will give you an authorised copy of the deed, called a copia simple, either on the spot or send it via your lawyer a few days later in PDF format.
If you have a mortgage, the lender retains the original mortgage deed until the mortgage is settled.
Register ownership at the Land Registry
The buyer, or their legal representative, collects the original deed post-completion and lodges it at the Land Registry, paying the associated fee.
- The registration process can take up to three months to complete.
In Spain, we have a two-tier system comprised of the notary and the land registrar. Unlike other countries, in the Spanish legal system, the only thing that matters is title registration, not the physical title deed itself.
Other post-completion tasks
- Inform utility companies of the change in ownership and sign new contracts
- Inform the community of owners of the change in ownership
- Settle all your bills
- Pay any taxes that are due
- Now that you’re living in Spain and have a fixed address, register yourself on the padrón if you haven’t already done so.
Update your will – both in the UK and in Spain.
Get advice from a solicitor about Spain’s inheritance laws and what they mean to you.
EU citizens can choose whether they want the law of the country in which they live, or the law of their nationality, to apply in the event of their death.
In some regions of Spain (such as Andalusia), inheritance tax has been (almost) abolished.
Larrain Nesbitt Abogados is a Spanish law firm specialized in conveyance, taxation, inheritance, residency, and litigation.
You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88, or by completing our contact form to book an appointment.
The information provided in this guide is of general interest only and is not to be construed or intended as a substitute for professional legal advice.
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