PRIVATE CONTRACT, NOTARY AND REGISTRATION


Before buying a home in Spain, you should get to know the Spanish system for purchasing/selling and owning a property...



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... there are differences from the one you know from your home country. By knowing and applying the law and the customs, you are more able to avoid difficulties.

Private contracts

You can legally purchase a property using a private contract, as long as it contains some minimum requirements: identification of the parties contracting, the object of the sale and the conditions of the sale. If you sign such a contract and later do not want to go through with it, you may be taken to court by the other party, demanding that you comply with it. Some contracts also contain methods of dissolving a contract, for instance that the vendor loses the money he has been paid. On the other hand, if the vendor breaks the contract, for instance if he gets a higher price offer, he may be forced to pay the buyer double the amount of the sum deposited.
A receipt for a down payment or a reservation may be worded in such a way that it is a legally binding contract.
A private contract may be a good method to agree on a purchase/sale that cannot be concluded at once. If you as a buyer need some time to provide the total amount involved but like the property and want to bind the purchaser by paying a deposit, you can in the contract stipulate that the rest of the monies shall be paid at a later date.
Even as a vendor, the private contract may be useful, because it gives you the assurance that the buyer will complete, before you take the property off the market.
However, it is not necessary in all cases to make a private contract. If you have all the money available, you can go straight to the notary to make an "Escritura Publica de Compra/Venta" (a public purchasing/sales deed).

"La Escritura"

While the private contract is legal, it does not give the buyer sufficient legal protection. That can only be given through the registration of your ownership rights in the Property Register. To be able to register a purchase there, the agreement must always be drawn up by a public notary.
The buyer has the right to choose the notary to be used. He is normally also the one who pays the notary fees. The notary will draw up the "Escritura de Compra/Venta" based on the title deed of the vendor and the declarations of the signing parties (details of the price and the payment). He will also include a "Nota Simple" (certificate) from the Property Register as to who are the present owners of the property and if there are any encumbrances existing on it. This certificate shall not be older than 48 hours before the signing of the deed, and blocks out any other inscriptions on the property. You must ask that the notary complies with this obligation!
Be aware that the notary does not check out anything else other than the identity of the signing parties, and that the information given in the deed corresponds with what is mentioned in the "Nota Simple" from the registry.
If you do not take a mortgage, and are not getting payment terms on the purchase of the property, it will be written in the Escritura that the purchasing price has been fully paid and that the document is the most firm receipt. In case a sum lower than the real purchasing price is being declared in the deed, with this receipt the vendor cannot claim any more money. If payment terms are agreed in the Escritura, what is normally added is called a "clausula resolutoria", whereby the vendor reserves his property rights until full payment has been given.

The registration

You should get a "Copia Simple" from the notary as soon as you have signed the deed. That is a photocopy of what you have signed, with the stamp from the notary, but without the signatures on it. The original stays in the files of the notary (meaning you can always get a new copy if you lose your Escritura), while what is called "La Primera Copia" (first copy) is sent by the notary to the Property Register.
The notary normally asks the buyer if he wants the deed sent by fax the same day it is signed to the Property Register. You should insist that he does so. At the Property Register they will enter the new Escritura at once into the daily journal and thereby block out any other entries on the property. From the daily journal it is later transferred into the main ledgers, and the "Primera Copia" is stamped by the registry and given the pertinent registration numbers. Then it is sent back to the notary, where you can pick it up. Today this process normally takes a few months.
Before making a private contract or paying a down payment on a property, it is prudent to ask the vendor to provide you with a "Nota Simple" from the registry for you to check it out, or to give you a copy of his title deed, so that you can go to the Property Register yourself and ask for a "Nota Simple". However, even if you previously have got such a "Nota Simple" you should still ask the notary to include the one ordered by him from the registry less than 48 hours before the signing of the Escritura.
Although the vendor and buyer can make an agreement themselves, or they can go straight to the notary and ask him to draw up the "Escritura de Compra/Venta", it may be wise to seek the assistance of a lawyer.

G. Blanco
Spanish Solicitor
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Additional information