Option to buy

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This topic contains 15 replies, has 5 voices, and was last updated by Profile photo of Anonymous Anonymous 4 years, 8 months ago.

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  • #56547
    Profile photo of Anonymous
    Anonymous
    Participant

    Can anybody advise how much I should expect to pay a solicitor in Spain to draw up a rental contract with ‘opción de compra’ ? Or, indeed, do I need a solicitor/are these contracts available off the shelf?
    Many thanks!

  • #108232
    Profile photo of logan
    logan
    Participant

    An average price of around €250 should be the going rate for contracts such as this which is basically a rental contract with the option included.

  • #108233
    Profile photo of Anonymous
    Anonymous
    Participant

    Thanks logan…. I was thinking around €300 would be a fair price and was prepared, solicitors being what they are, to be stung at maybe €500. Then the quote came back at €900!!!

  • #108234
    Profile photo of logan
    logan
    Participant

    @Ensanche wrote:

    Thanks logan…. I was thinking around €300 would be a fair price and was prepared, solicitors being what they are, to be stung at maybe €500. Then the quote came back at €900!!!

    Yes I’m not surprised, shop around. I have a Spanish lawyer of long standing, that makes a difference.

  • #108248
    Profile photo of Anonymous
    Anonymous
    Participant

    Why do the forum users beleive that Spain will not be a rip off ????

  • #108249
    Profile photo of Anonymous
    Anonymous
    Participant

    I want to know why anybody would even consider rent to buy!!!

    You either rent OR you buy.

    If you were to enter into such a contract and the market declines further you are not going to purchase a property for a considerable sum above the current market value.

    If the market starts increasing rapidly (miracles can happen), then the seller will simply not sell too you at a sum lower than market value.

    This is Spain, you will have absolutely no recourse in the courts. And if you do it will come at a considerable cost and delay.

    But hey if someone want to sign a rent to buy contract….

  • #108250
    Profile photo of Anonymous
    Anonymous
    Participant

    @jp1 wrote:

    But hey if someone want to sign a rent to buy contract….

    Edited to add…

    And pay for the privilege!!

  • #108251
    Profile photo of Anonymous
    Anonymous
    Participant

    Unless you of course you are the seller…

  • #108259
    Profile photo of Anonymous
    Anonymous
    Participant

    jp1 Of course I am the seller! and seeing as I was quite prepared to board our place up and abandon it for the foreseeable future, the option of someone living in the property, maintaining it, paying rent and hopefully being in a position to buy it within the next five years is an attractive alternative.

    shakeel – I’m fully aware of rip-off Spain and, more to the point, I expect solicitors to try to rip you off whatever country you’re in. I was just keen to hear from those with more experience what the ‘correct’ price should be for that particular job and if a solicitor was actually necessary.
    To that end, I discovered that the Unión de Consumidores publish a draft contract….. so I might have a go at it myself if I can’t get a reasonable price from a professional.

    For anybody interested, the contract can be found here http://www.uniondeconsumidores.info/uploads/Contrato%20Arrendamiento%20con%20opcion%20de%20compra.pdf

  • #108260
    Profile photo of logan
    logan
    Participant

    More problems arise Ensanche if you get a bad tenant and that’s happening more and more as people lose their jobs. Then you have the expense of more legal work. It’s a rock and a hard place. I would be more inclined to sell for what you can get and be rid of the problem.

  • #108261
    Profile photo of Anonymous
    Anonymous
    Participant

    @logan wrote:

    More problems arise Ensanche if you get a bad tenant and that’s happening more and more as people lose their jobs. Then you have the expense of more legal work. It’s a rock and a hard place. I would be more inclined to sell for what you can get and be rid of the problem.

    I agree and that’s what we tried to begin with. We had a buyer at about 33% under what we paid in 2004 but it’s a country house and, being a growing family, they pulled out when they discovered there was no possibility of getting planning permission to extend.
    When we put the place up for rent with the option to buy, we were lucky enough to get 3 interested parties just through word of mouth, so at least we’ve had the luxury of choosing the ones most likely to stick to their end of the bargain. Still a risk though…. there’s no guarantee they’ll keep their jobs in the years to come.

    I read yesterday that you can buy insurance to cover lost income and legal expenses in case of a defaulting tenant….. probably the highest growth area in the insurance business in Spain!

  • #108262
    Profile photo of logan
    logan
    Participant

    I can only offer you my own experience and that of my friends. The risk is great over a 5 years term. Anyone’s life with the best of intentions can go belly up in that time particularly in these hard economic times.
    Insist on a substantial cash bond up front to cover any possible legal expenses, loss of rent or damage. That may indicate the financial worthiness of your prospective tenant. Legal contracts are vital, insist on a bank record of payments, don’t accept cash and declare the income to your own tax authority otherwise your tenant will have you over a barrel.
    Good luck.

  • #108263
    Profile photo of Anonymous
    Anonymous
    Participant

    Thanks logan… I’ll do all of that.

  • #108269
    Profile photo of Anonymous
    Anonymous
    Participant

    @Ensanche wrote:

    jp1 Of course I am the seller!

    Personally I would keep it simple. You can’t sell at your minimum price, you don’t want to board it up (understandable), then simply rent it, especially if you are going to experience higher legal costs for setting up a contract.

    My view is that renting a property is hard enough (and getting worse), I have seen two close Spanish family members rent out properties and almost immediately have the tenant stop paying. In both cases it took several years to get the non-paying tenant out.

    I can only imagine a rent to buy contract adds another level of complication to the scenario especially if the tenant stops paying.

    I would also agree with Logan, lower the price until you can sell it, being an accidental landlord in Spain is only going to get worse.

  • #108287
    Profile photo of Anonymous
    Anonymous
    Participant

    Thanks for your thoughts jp1…. I would lower the price until it sells but time is short as we are heading back to the UK in a little over a month.
    Luckily the tenants/prospective buyers are friends of our neighbours and trusted by them. We in turn trust our neighbours, so although none of that guarantees their future financial situation, I do believe that the deal at the outset is being made in good faith. The rest is a risk we’re prepared to take.

  • #108289
    Profile photo of Anonymous
    Anonymous
    Participant

    Ensanche if that’s the case “you sort of knowing them” then I would do it with the option for you as sellers to pull out if someone else decides to buy your property “highly unlikely” I know but could in theory happen.

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