The procedure to purchase a property in Spain

Avoid the pitfalls when buying a property in Spain...

 The procedure to purchase a property in Spain is different from the rest of the European countries as far as legal and registering aspects are concerned. The differences are less accentuated with southern countries (France, Belgium, Italy, etc) than with Anglo-Saxon countries (Great Britain) or Scandinavian countries (Norway, Sweden and Denmark).

In Spain, all matters relating to purchase and sale contracts (concept, rights and obligations of both purchaser and seller, contract effects, etc.) are regulated by the Civil Law and in particular by the Civil Code.

Napoleon’s French Civil Code of 1804 provided the inspiration for Spain’s Civil Code. Napoleon’s Code, which in turn is influenced by Roman Law, has also provided the inspiration for other current European civil codes (Belgium, Italy, etc.).

In the Spanish contractual system, any
agreements, clauses and conditions considered to be relevant by the parties can be freely established in the contracts. However, despite the contractual freedom existing in the Spanish legal system, all agreements, clauses and conditions must obligatory comply with some rules and principles. Thus, the contractual freedom is limited by these rules and principles.

Purchase and sale contracts are governed by articles 1445 to 1537 of Spain’s Civil Code. These articles establish the purchase and sale concept, who are entitled to purchase and sell, the obligations of both purchaser and seller and the causes of contract resolution. Some of these articles must obligatory be enforced while other are not obligatory. In this latter case, the parties can freely establish the agreements and clauses of the contract, according to their wish.

Purchase and sale contracts can be made either in writing or verbally (article 1278 of Spanish Civil Code). However, it is advisable to make them in writing, particularly if the object of the purchase and sale is a property.

Purchase and sale contracts are fully valid between the contracting parties and their heirs, provided that the following requirements are fulfilled:
1    Consent of the contracting parties.
2    Object of the contract.
3    Purpose of the contract, where the actions to be performed by the parties are described. Seller: delivery of the object and its detailed description. Purchaser: payment of the price including detailed amount.

Finally, all contracts entered into by the parties either in writing or verbally can be notarised and become public title deeds through their signing in the presence of a Notary Public. Both purchaser and seller are entitled to have their private purchase and sale contract notarised.

The main difference between a private contract and a public title deed is that the public title deed has direct access to the Registry of Properties and, once registered, the name of the owner will be recorded and his or her right with respect to the property will then be protected not only against the seller but also against any third party who might claim rights upon the property.

Prior to signing any private contract of purchase and sale with a promoter or individual, it is very convenient to appoint a professional (Lawyer) who will be able to check the content of the contract and give legal advice to the purchaser.

Thus, the lawyer will verify if the contract meets all the essential requirements to be valid, that is, if an accurate description of the object of the purchase and sale is included and will inform the purchaser.

Likewise, he will ensure that the method of payment is adequate and that the penalty clauses imposed on the parties for breach of contract are fair for both parties (for instance, if the penalty for delay in a payment is fair compared to that imposed on the seller for delay in the delivery of the property).

With regard to new-built properties, it is very important to verify if the builder is the owner of the plot of land upon which the property object of the contract is being or is to be built. In this case, the lawyer must also verify if said builder has obtained the building licence and the extension of such licence.

Finally, it has to be taken into account that the builder can be obliged to take on insurance or provide bank guarantees for any monies paid by the purchaser in respect of the property price. Thus, in the event that the building works do not start, are never completed or are not completed by the agreed delivery date, the purchaser will be guaranteed the refund of any sums paid.

Once the lawyer has ensured that the contract complies with all the abovementioned guarantees, it can be signed and the payments made, according to what has been agreed.

Finally, at the same time or after the final payment is made, the purchaser will be entitled to formally complete the purchase by signing the public title deeds before a Notary Public.

Spanish Solicitor

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