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Real Estate Risk

[vc_row][vc_column][vc_column_text]Are you planning on purchasing a property in Spain but unsure of Spanish real estate law – and keen to avoid unnecessary risks, expenses, and legal issues?

There are numerous risks and problems that can put your interests at jeopardy. Lequidy is here to make you aware of some of the main risks involved…

And how to avoid them, so you can purchase property with more peace of mind.

Be cautious regarding the statements of real estate agents.

Real estate agents can lie with regards to the necessity of certain documents.

There are good and bad real estate agents – but it’s often the case that the agents are not acting in your best interest.

Rather, they are often acting for their own economic benefit and on the seller’s behalf.

You should know that certain documents such as the Certificate of Habitability are necessary and may not be easily obtained, even though a real estate agent might tell you otherwise.

Here at Lecuidy, we act solely in the best interest for you, so that your purchase of property will go smoothly and fluidly.

When searching for the right property, make sure you know whether the land is registered under urbanizado, fully urbanizado, or rural.

Urbanizado or urban, means that you are allowed to build on the specific plot of land with compliance to planning and building regulations.

Fully urbanizado is when a property has established infrastructure works that have been completed. If these infrastructure works are not completed then be careful, you may have to pay for them, depending on the contract.

In both cases, you will want to make sure that this property is connected to a main water source, electricity, and a telephone line. This will help to make sure that the land you intend on purchasing is definitely urbanizado or fully urbanizado.

If the property does not provide these necessities, you may never be granted authorization to connect to these services regardless of what a real estate agent or seller may say.

Otherwise, the land you intend on purchasing will be considered rural land. This translates to agricultural land, which provides very strict constraints on what can and cannot be built – and the size of what can be constructed on this plot of land.

You could end up paying a lot of money for a piece of land, on which you will never be allowed to build!

So, before buying a property, it is fundamental to check with the land registry (Registro de la Propiedad) to make sure that the plot of land you intend on purchasing has planning permission so that you can legally build on this property. This will also need to be confirmed with the urban planning of the corresponding City Hall.

If the property does not have appropriate planning permission, the government can and will destroy any construction on your property.

Before purchasing a property, check to see if the property has incurred any debts.

In Spain, any debt belonging to a property that is sold transfers onto the buyer. Common property debts include a mortgage, payments due to a tenants’ association, and property tax.

It is essential that you check to see that there are no debts attached to the property before making a purchase.

However, if there are debts belonging to the property, then you will want to state that the seller will pay off these debts in the terms of the contract.

When writing the terms of the contract to acquire a property, make sure you put an exit clause in the contract if you cannot acquire a mortgage.

In Spain, mortgage lenders will not sign off on a mortgage agreement until the due diligence and compliance of your financial capabilities have been checked off and approved.

For this reason, you will want to put a clause into the terms of the contract which states that if you cannot obtain a mortgage from a licensed mortgage lender, then the contract becomes null.

Hire a surveyor or an engineer to scrutinize the property.

Before purchasing a property, you will want to hire a surveyor or an engineer to assess the property.

You should have the property surveyed to make sure it is properly described and structurally sound. Otherwise, this will result in costly repairs.

You will also want the land to be measured to make sure that the proposed plot measurements match with the Spanish Cadastre.

Be cautious of buying off-plan or a new-build home.

When purchasing a property that has not been physically built yet, you will want to perform the due diligence before signing anything to ensure that:

  • the company that is building your property exists and is registered at www.registradores.org
  • the project or construction plan is registered with the land registry
  • planning permission has been granted by your local government
  • there is proper insurance that will refund your money if the property is not built. For example, if the contractor/ financer runs out of money and goes bankrupt.

Never sign anything without a lawyer by your side.

Whenever you sign a document for the property (be it the reservation or a private contract) you are about to purchase, you will want to understand the full legal meaning of the terms used and their implications.

That’s where we come in. We can help you navigate through all the points we’ve mentioned in this post, so that you understand what you are signing and do not incur any hidden fees or expenses throughout this process.

As a team of young yet highly qualified and experienced lawyers, it is our mission to help you acquire the property that you desire. We do the work and you get to become a real estate owner in Spain!

If you’ve any questions, then contact us – or just start by getting in touch with the live chat today![/vc_column_text]

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