For those who are involved in conveyancing transactions in England and Wales,  we know how important it is to keep the client fully informed at all times, to be efficient in our negotiations with other parties and to deliver an excellent service to clients carrying out a thorough property investigation.  This is why it is advisable to leave the matter in the hands of a suitably qualified professional.

The same principles should be applied to those dealing with conveyancing matters in Spain especially if Lawyers are not familiar with the law in Spain or the country´s culture.  We have all heard unpleasant stories about Spanish property transactions caused by unprofessional people.

To avoid any unpleasant situations or surprises each property transaction needs to be handled with the utmost care and attention.  There are no basic rules to be applied to all transactions if you want to deliver a professional service to clients.

The following is just an example of some of the main issues to consider when dealing with Spanish conveyancing:-

1.-  Getting advice in Spain.

Choosing a law firm to deal with Spanish conveyancing is not difficult.  However, when it comes to considering which on to choose you should pay attention to the following criteria:  the firm and its Lawyers should have extensive knowledge of the property business in the area so they can ascertain the value of the investment, they can provide information about the parties involved, they are able to cover all other legal matters that might arise on a particular property transaction or investment, including international issues when dealing with non Spaniard clients.  Most important is to obtain a detailed list of the services included in their conveyancing fee and how they intend to provide these services.

2.-  Full Investigation.

It is not true when people think that in Spain all you have to do is check with the Land Registry that there are no mortgages or charges placed on the property.  A thorough investigation needs to be carried out to ensure that there is NOTHING that can jeopardize the transaction.  It is always advisable to make searches before the City Hall Planning Department to check planning rules, building license applications, licenses to alter or extend the existing property accord with the documents received. Details of the property should be in accordance with the Land Registry details. 

A full Land Registry Search is also advisable in some circumstances taking into account the fiscal value of the property for tax purposes, tax authority warnings placed for new assessments etc. 

A Companies House Search is compulsory if dealing with Developers, Builders and Spanish Company owners. 

If taxes are not paid, these are placed against the property so it is very important to check with the authorities to see that previous taxes have been property filed and paid in due time in order to avoid penalties and other inconveniences.  Also most people forget the importance of examining the Minutes of the Community of Owners.

3.-  Reporting in Writing.

A full investigation is advisable to obtain all the above information.  Your Spanish Solicitor should provide a report in writing setting out all the results from their searches and enquiries together with a conclusion as to whether the property is a sound investment or not.

4.-  Negotiations of the Contract.

As buying a property in Spain is so popular Lawyers now receive all types of standard purchase contracts with terms and conditions in favour of the Seller or Developer.  A purchase contract may include many terms and conditions that can be considered by the law as unfair and therefore not applicable.  In order to take advantage of the law, it is wise to negotiate these terms and have them amended accordingly.  If this is not possible, then it is usual practice to send a formal protest in writing to the Seller before signing the contract giving evidence of this fact.

5:- Advance Payments Guarantees.

The Spanish law makes the developer of a new complex liable to have insurance or a bank policy to guarantee buyers that all the payments made during the construction period plus interest will be recovered in case the building construction does not commence or will not be completed on the agreed dates.

It is therefore mandatory for the buyer to make sure that the developer has in place the insurance policy to comply with the law. As the policy may take a few weeks to be produced it is also relevant to take care that the payments are made to a designated special bank account. The policy shall be kept in the buyer’s hands until completion for the sake of security. 

The above policy does not just guarantee that the money paid will be refunded in the unlikely circumstances named but it does mean that the insurance company or the building society has checked the value and approved the viability of the building project, giving you additional security.

6.-Completion

Unlike in the UK, completion does take place at the notary public’s office. Title deeds quite often contain terms that are complicated to understand even for Spaniards or simply set out some extra responsibilities for the buyers that are not known at this stage. It is therefore crucial to inform the client as to the extent of the meaning of every deed’s terms.  

Completion takes full effect when the deed is registered at the appropriate Land Registry. It is advisable to make sure that the deed is filed within the priority period so it will guarantee that no other documents encumbering the property can get access to the Land Registry before the title deed.

The above list is not exhaustive and there are a number of other issues that may or may not be applicable to a particular transaction. Our associate firm  BCP Abogados and Solicitors undertake complex and high value property work dealing with all aspects of residential and commercial property transactions.