were we over-cautious?


This topic contains 2 replies, has 3 voices, and was last updated by Profile photo of Melosine Melosine 11 years, 2 months ago.

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  • #51185
    Profile photo of Anonymous

    We recently saw a house in Bocairent which we wanted to buy, but conscious of your advice to carry out full due diligence we didn’t wish to send the deposit until we were sure everything was in order. We realised it wasn’t, when our bank refused us a mortgage because only the land was on the ‘nota simple’ and we informed the estate agent (who hadn’t bothered to tell us about this issue) that we wouldn’t go any further until the house was registered. This shouldn’t have been a problem because it was over 5 years old but getting the vendor to agree to it and dropping the ‘black money’ from his desired 28% to 20% took a lot of time and we delayed booking flights to go back out in August to close the deal.

    We were just at the point of sending the money by way of deposit for the vendor to get the house registered, when we were told that someone else had viewed it and were able to go to the town hall to have the house registered, pay deposit and complete immediately. So our caution in getting everything in order before sending any money caused us to lose out on a house we really wanted and given that we’d shown good faith in the estate agent and the vendor we’re very disappointed in our first brush with Spanish property buying.

    Were we wrong to be so cautious; should we have believed the assurances of the estate agents that everything was fine and it was no problem that the registration was not in order; and finally what is the accepted percentage for ‘black money’?

  • #58586
    Profile photo of Anonymous

    The estate agent should have kept you fully informed and should have also discussed with you the seller dropping the price to cover the costs of the registration of the house. In case you have this situation again you need to check if rates are being paid on an annual basis for the house. If so then the house is at least registered with the local council. For the land registry you would probably need the following documents:-

    Catastral Certificate – this comes from the office which sets the rateable value (Catastral office)

    Certificate from the Local Authority (Ayuntamiento) confirming the land has a house on it, the built area and the age of the house. To supply this the Ayuntamiento will probably ask for a report (informe) from an independent professional, e.g. surveyor, architect etc.

    The latest receipt confirming rates paid.

    Details of the registered owner of the land, i.e. as on the last sales document (escritura) entered in the Land Registry.

    Details of the party interested in taking over ownership or the actual owners

    With regard to black money, although this was sometimes paid before the entry of the euro it is less so now and there is no fixed %ge. It is entirely on a case by case basis but is illegal. Don’t forget that if you were to do this and then sell on to someone paying the full value you will be liable for higher capital gains tax because the registered price you will have bought at will be less than the real value and hence the declared profit will be higher.

    Although you have lost out you this time you cannot be too careful but need professional advice and unfortunately this is not always available in some cases.

    Good luck

  • #58587
    Profile photo of Melosine

    Definately NOT.
    Apart from the fact you have no proof that there actually was another vendor…. You were obviously interested and this could have been a ploy to make you accept the deal.

    I may be incorrect but I believe it is up to the vendor not the buyer to register it at the town hall and have it notorised and this takes about 3 months.

    Be very wary of houses without escritura. It always was the case of build now register later but things are tightening up.

    Black money is another issue altogether.

    If you have located one ideal house then you will surely locate another…. with….everything legal.
    The moment you see a property you like ,contact a solicitor ( not the estate agents) as you would in England.
    Within 24 hours you will know if it’s legal and will be able to proceed with delay.

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