The lawyer (solicitor) draws up the private purchase contract and conducts the legal investigation during the Spanish purchase process. From the moment the reservation contract of the real estate agent the project runs completely through him, including the signing of the Title Deeds at the notary and the registrations / after-sales. Because this is different from other Northern European countries, it´s important to have the division of tasks and the responsibilities clear of the real estate agent, lawyer and notary.
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Full-service purchase by Power of Attorney lawyer
So in Spain you don´t hire a lawyer to resolve problems, but to avoid them already in the first place. The lawyer can legally represent his client by a Power of Attorney signed at the notary which is especially convenient for foreign buyers. For example because sometimes a completion date might be delayed at the very last moment. The lawyer/solicitor can take care of the following tasks for his client.
- Overview costs and taxes: through the offer of the lawyer you can determine your purchase budget
- NIE-numbers: Application of fiscal document for purchase at the Police station (you need to have these at completion)
- Spanish bank account: Opening bank account for direct debits of service contracts (payment for the purchase itself run through the thirds account of the lawyer)
- Legal investigation / advice: Check legality of the property (DAFO) and debts (see below)
- Private purchase contract: Drawing up extended contract with all conditions of the purchase (see below)
- Payments purchase: The 10% down payment, the final payment and if desired also the reservation fee are paid through the thirds account of the lawyer
- Architect: Advice and referrals for tasks architect (structural survey, measurements house or terrain, New Build Declarations, DAFO, etc.)
- Mortgage application: Facilitating the application at the Spanish bank, arranging valuation and the signing of the purchase deeds at the notary with the bank (on the day of completion)
- New Build: Check licenses, bank guarantee and further documentation plus facilitating partial payments
- Registrations: Correct inscriptions after completion at the Land Registry (Registro de la Propiedad) and Cadastre (Catastro)
- Tax payments: ITP transfer tax payments for house and possibly furnuture, 1,5% Actos Juridicos Documentados (AJD) (from 28/05/2021 to 31/12/2021 temporally 1,2%), the 3% Capital Gain Tax for non-fiscal resident vendor
- Service contracts: Name changes and direct debits of electricity, water, environmental tax (basura), comunidad/community, IBI council tax, etc.)
- Spanish will & inheritance tax: Fiscal & legal advice plus facilitating the signing of the Spanish will at the notary
- Rental license: Advice about renting out property and application RTA rental license, licence Vivienda Rural (country side or small towns) and Licence of First Occupation/LPO (for a B&B or Casa Rural you need an opening license for a company)
Power of Attorney
Signing the Power of Attorney in Spain is the cheapest and quickest. Is this not possible? Then you can also sign in a Spanish embassy or consulate in your own country (depending on waiting lists). In worst case you could also sign at your local notary. In this case, though, you´ll have extra costs from the notary, the Apostle of The Hague and possibly a legal translation.
The legal investigation
The Spanish notary is not responsible for the checks of the legality or debts of the property. Neither for the correct registrations or tax payment after completion. It´s advisable to no try to cut back on that one percent of the purchase price and contract a good lawyer/solicitor to carry out the legal investigation. Especially if you buy in the countryside! The legal situation is difficult because of the different layers of laws (for example in relation to the DAFO certificate). Besides of this the lawyer is the only professional that has the right education for this work. If a real estate agent makes a mistake or judgement error, you´ll have far more problems and costs. The same goes of course for a gestor (administration office / accountant). Also he´s the only one with a relevant professional liability insurance.
Especially for country side houses (rustico/campo) it´s quite common that these aren´t registered correctly in the Land Registry and Cadastre. The lawyer check if this can have negative consequences, how these problems can be solved and negotiates over the costs.
In the country side the DAFO certificate is an important issue, but there´s all kinds of special circumstances. Think for example about extra notarial deeds, the situation of the Community, licenses, needed price retentions, the check of the minimal fiscal value, the request for black money or a valuation of the furniture, etc. Your lawyer will inform you about all legal ánd fiscal consequences and will negotiate on your behalf.
Private purchase contract
Just to be clear: the real purchase of the house only takes place when signing the Title Deeds at the notary. After the signing of the private purchase contract the financial risk is 10% of the purchase price. This happens half way during the investigation and mostly this risk is for both parties. A good lawyer or solicitor, though, puts all kinds conditions to this payment. The contract often contains about 10 pages. All these clauses will guarantee that the buyer gets his down payment back if there are any unsolvable problems. By the way, it concerns 10% of the purchase price minus the paid reservation fee.
Practical examples of purchasing problems
Are you still wondering if you really need a lawyer? Then read these practical examples of problems when buying a house in Spain in which it (almost) went wrong without proper legal guidance from a specialist.
Need a referral for a good estate agent in Andalusia? Or like to receive an example offer for the legal investigation of a specialized and independent lawyer? Find out more through link above.
©2021, Ariane van Wijk