Property transactions in Spain, as anywhere, are essentially a legal matter concerning the transfer of property rights from vendor to buyer. Relatively complex legal issues lie at the heart of every transaction and buyers should use qualified professionals to ensure their interests are protected in this legal maze. Without qualified legal advice buyers take significant and almost entirely avoidable risks with one of the biggest investments they will ever make.
A significant number of British people who have bought in Spain complain that their lawyers were an expensive obstacle rather than a solution to their problems. Some complain of inept lawyers and assert that you are better off doing the legal work yourself with the help of a translator. Others have decided that lawyers aren’t worth their fees and that a gestor (a less qualified administrator) can provide the same level of protection at a lower cost. Most unfortunate of all though, are the British buyers whose lawyers worked against them due to hidden conflicts of interests.
Despite these negative experiences the fact remains that you should always use a lawyer when buying property in Spain. Without a competent and independent lawyer you run considerable risks, and given the sums of money at stake it just isn’t worth it. However it is also clear that you have to get your choice of lawyer right as all the problems with lawyers can be traced to incompetence or conflicts of interest.
Conflicts of interest
Very few British buyers have a Spanish lawyer in their address book when they set out to buy property in Spain. Given that many estate agents make a song and dance of providing legal solutions, most British buyers take the easy option and use the lawyer being pushed under their noses. However British buyers who use these lawyers run the risk of hiring the very lawyers they will need protection from if a dispute arises.
Lawyers recommended by estate agents and developers come in different guises. Some companies offer their in-house lawyers, who will of course draw up contracts in the interests of the company and fight its corner if push comes to shove. You are probably better off doing all the legal work yourself with the help of a Spanish-English dictionary than using an in-house lawyer.
It is more likely, though, that estate agents will recommend a lawyer who is nominally independent from them. In many cases the independence will be genuine and the recommended lawyer will look after the buyer’s interests. However in some cases there is just a veneer of independence that covers up murky commercial relationships and conflicts of interests. Buyers are lulled into a false sense of security whilst the recommended lawyer does little more than oil the wheels of the transaction on the estate agent’s behalf. And even when recommended lawyers are genuinely independent from estate agents there is usually some sort of business relationship that estate agents can use to put lawyers under pressure to cut corners.
So when buying something as expensive as property in a foreign country you need to find a lawyer who you can be certain is working for you and you alone, and avoid using lawyers recommended by estate agents or developers. Looking for an independent lawyer once a dispute has started is like closing the stable door after the horse has bolted. You need your own lawyer from the very start.
Finding a competent and independent lawyer
If you are serious about buying property in Spain you should make your search for a lawyer one of your very first tasks. This gives you time to find an English-speaking lawyer with no connection to the company you buy from, which reduces the risks of hidden commercial relationships that might undermine the service you receive. It also means you have your own lawyer on hand to check the very first contracts you are expected to sign.
With a bit of effort and forward planning you will have no trouble finding an independent lawyer. One sensible approach is to ask friends and acquaintances for recommendations. If this draws a blank then consider contacting the British consulate in or closest to the region where you are buying. They can email or fax you a list of English-speaking lawyers in the region. Many English-speaking Spanish lawyers also advertise in the press or can be found through internet searches. At the end of the day it doesn’t really matter how you find your lawyer, so long as they are working for you.
Wherever possible you should hire a lawyer based in Spain, and preferably in the region where you are buying. Locally based lawyers can easily visit the town hall of the municipality where you are buying, and may even know the mayor, the municipal architect and the local Notary. In a country like Spain, where contacts count, this can be a big advantage when sorting out problems. Local lawyers are also more likely to know about regional urban plans, the problems specific to the region, and the reputations of local estate agents and developers. They are on site to do any of the many legal checks that may need to be done and can readily accompany you to the signing of the deeds before Notary. Lawyers who are not locally based have to operate over the phone or through associates, all of which may decrease their speed and effectiveness whilst increasing the cost to you. Having said that there are cases where British buyers are better off using lawyers based in major cities such as Barcelona, Madrid or London. This is usually so when buyers need a high level of international fiscal expertise, or where an appropriate local lawyer cannot be found.
It is important to realise that Spanish lawyers specialise in different areas of law and ideally you need one who specialises in real estate law (derecho inmobiliario). In theory a generalist or even a divorce lawyer can help you buy a property but in practise the service will not be as good. This largely explains why some British buyers have found their lawyers to be incompetent. Bear in mind that the lists of lawyers provided by British consulates and other sources do not normally indicate areas of specialisation so you should always look into this before proceeding with a lawyer.
Many buyers wonder whether British solicitors can be used to buy property in Spain. There is nothing to stop one using a British solicitor, and advice from a British solicitor is probably better than no advice at all. However you should avoid using British solicitors unless they are also fully qualified in Spanish real estate law and fluent in Spanish. Without this the service they can provide is limited.
A list of competent, independent real estate lawyers organised by region can be found at the website.
Dealing with lawyers
You need to establish a good working relationship built on trust, and avoid giving any impression that you lack confidence in your lawyer. Having said that anything is possible so always keep copies of all the important documents you pass to your lawyer and keep notes of conversations and decisions.
Many lawyers charge between 1% and 1.5% of the value of the property for their legal services, whilst others charge on an hourly basis or a flat fee (all fees attract VAT). Just be warned that there are considerable variations in fees and fee structures. Do ask for the fees to be explained and an estimate of the hours involved. But also be diplomatic when discussing fees, as Spanish lawyers don’t like to be haggled with as if they were selling oriental carpets.
Typically you will be asked to pay a provision of funds of 1,000 Euros or up to 50% of the fee when your lawyer starts working for you, with the remainder due once your purchase is completed. You should expect to receive a receipt for your initial payment that details the amount and purpose of your payment.
If things go wrong
If you have doubts about your lawyer you have the right to change at any time.
To do this you should send a letter or fax informing your lawyer of your decision and giving instructions to pass your file to your new lawyer by a certain date. If your instructions are ignored you should send an ultimatum threatening to complain to the local lawyers association (colegio de abogados) and then do so in the last resort.
If you change lawyers during the purchase you only have to pay for work provided up to that date. It is difficult to measure the work done and most likely you will just have to settle for not making any further payments.
© Mark Stucklin (Spanish Property Insight)