By request, we are bringing this programme this step by step guide to buying a property in Spain out of our archive.
To listen our interview please click the player at the foot of this page.
Peter: Today we’re talking to José María Sánchez, who is the managing director of Andalusian Lawyers and a lawyer specialising in conveyancing, particularly for foreigners investing in property in southern Spain. He’s going to guide us through the buying process with a step by step guide. So, once we’ve seen our dream property, what should be our first step?
José María: Before you pay any money or sign anything, the most important thing is to find yourself an independent lawyer with experience in conveyancing. Why is it so important that a lawyer should be independent? Well, if the lawyer has connections with the other party, e.g. with the seller, agent or developer, he won’t represent your interests 100 per cent. For example, if the lawyer also works for the agent or developer, he might be keen to complete the sale as soon as possible and not work to defend your side of the sale. An independent lawyer with no interests in the sale apart from the buyer’s is the only person who is going to fight your corner.
Peter: Why would you think so many people accept an agent’s or developer’s lawyer rather than look for an independent lawyer?
JM: When you see a property you want to buy, it’s easy to get carried away and buyers often find themselves caught up in the middle with agents and sellers putting pressure on them to pay a deposit, accept conditions and buy as soon as possible. You should take things calmly and inform the agent that you’re putting everything in the hands of your lawyer.
P: How would a buyer find an independent lawyer?
JM: In Spain, personal recommendation is the best way to find any good professional and lawyers are no exception. Ask friends who they would recommend or ask your bank manager for a recommendation. You should check that the lawyer is a member of the provincial lawyers’ association and don’t be tempted to employ someone who isn’t a lawyer. A lawyer is the only person who can give legal advice and more importantly, if anything should go wrong or you’re not satisfied with the outcome, a registered lawyer always has professional indemnity insurance.
P: So we’ve found an independent lawyer, what’s next?
JM: Your lawyer’s first task is to check the property’s legal status – if it’s a resale property, check that it’s registered in the seller’s name, check for debts on the property etc. If it’s an off-plan property, your lawyer needs to check the development has all the necessary licences and that the developer has an bank guarantee. An independent lawyer will leave no stones unturned at this stage – a lawyer working for the developer might turn a blind eye if the developer hasn’t got all his paperwork in order. Once your lawyer is happy that the property’s paperwork is in order or that any legal problems can be solved before completion, he draws up a contract.
P: Is the contract standard or can the buyer and seller add clauses?
JM: the contents of a contract are very similar, but you can add any clauses you like to it. Remember that an independent lawyer will add clauses that defend your interests or fight to remove those that go against your interests. For example, it’s quite common for a developer to include a clause forcing the buyer to pay the costs of cancelling a mortgage. An independent lawyer should do all he can to get such a clause removed. Once both parties’ lawyers have agreed the contract’s contents, the buyer and seller (or their lawyers) sign the contract and your lawyer pays the seller a deposit, which is usually ten per cent of the price.
P: How long has the buyer then got between paying a deposit and completion?
JM: It depends on what’s agreed in the contract, although for resale properties, a month is the usual period. Obviously in off-plan purchases, the timescale is much longer. The buyer should now open a bank account if necessary and more importantly, start proceedings to get an identification number that all foreign property buyers must have in Spain.
P: How does the buyer obtain this number?
JM: The number, known as a numero de identificacion de extranjeros - NIE for short, can only be obtained from a national police station and in person. So, I’m afraid this means that the buyer has to go along to the nearest national police station, queue (possibly for hours) and fill in and sign the forms. The buyer is given a receipt and he should give this to his lawyer so that the NIE can be collected on his behalf later on, usually a couple of weeks later.
P: Why is this number so important?
JM: it identifies a buyer for the tax authorities and if you haven’t got a NIE when you pay the taxes associated with buying a property, you can be fined.
P: What about finances for buying the property?
JM: Well, obviously the sooner you have these in place, the better and if you’re buying with a mortgage, you should have this approved or pre-approved before you pay the deposit. The buyer also needs to allow around 10 per cent of the price for fees and expenses so budget for this as well.
P: And is it possible to give a lawyer power of attorney to sign and complete on your behalf?
JM: Yes, although I think that it’s best for the buyer to be present in person for completion, but if it isn’t possible, then your lawyer can draw up a power of attorney and carry out the purchase for you.
P: Between signing the contract and completion, what exactly should your lawyer be doing?
JM: Quite a lot! He should check and double-check all the legal aspects of the purchase, make sure that any legal problems are sorted out and prepare the completion documents ready for signing at the notary. An independent lawyer will do this absolutely meticulously.
P: So now it’s time to complete, what happens here?
JM: Both parties (or their representatives) meet at a notary’s office where the notary witnesses the signing of the title deeds (your lawyer has previously checked these) and you pay the final balance of the price, usually in the form of a banker’s draft. Your lawyer should explain all the steps and anything you don’t understand and you should feel free to ask.
P: And you get the keys and the property is yours?
JM: Yes and you can move in straight away if you want to. The next step for your lawyer is to pay taxes on your behalf and register the property at the land registry in your name. He should also organise direct debits for utilities and local taxes if you wish. You can now relax and enjoy your new home!
To contact Jose Maria Sanchez please visit www.andalusianlawyers.com or leave your comments via our site contact and Facebook pages.
