When Spanish property deals go sour, British buyers often say they received poor legal advice. Our expert gives you the lowdown on how to find a good lawyer.
Sunday Times Home Section, 29th May 2005
A Spanish joke has it that lawyers are professionals whose only function is to protect their clients from other lawyers.
Unfortunately for some British property buyers in Spain, the lawyers they use don’t even attempt to do that. Those who use lawyers recommended by the estate agent or developer they are buying from run the risk of hiring the very lawyers they need protection from.
Who does your lawyer really work for?
Many British buyers take the easy option of using the lawyer pushed under their noses by the estate agent – or even take the agent’s word that no lawyer is necessary for the sale. This compliant attitude lies at the root of many subsequent problems.
It is always essential to use a qualified independent lawyer. If you are offered the services of an in-house one by the estate agent or developer, just say no. They will be too tempted to draw up contracts in the interests of the company and fight its corner if push comes to shove.
Be wary, too, of lawyers recommended by estate agents. Some will be genuinely independent and will look after your interests, but with others there is only a veneer of independence that covers murky relationships and conflicts of interest. Buyers can be lulled into a false sense of security while the lawyer does little more than oil the wheels of the transaction on the estate agent’s behalf.
I was recently contacted by a couple from Manchester who used a law firm on the recommendation of large Costa agent when they bought a town house off-plan in Nueva Andalucia, near Marbella. Having been shown attractive plans and specifications by the agency sales rep, they gave the lawyer power of attorney to sign a purchase contract on their behalf. But the contract the lawyer signed included a different set of plans – a detail the couple were not notified of when they paid the 100,000 (£69,000) deposit, and which, they say, would have made them change their minds.
The couple are now disputing the purchase and feel that the lawyer made little effort to look after their interests, appearing to side with the agency and the developer rather than with them.
“The legal service was never better than cursory,” says their disgruntled Mancunian client. His Italian wife is more expressive: “The lawyers were never on our side. They were pushing us to complete, against our wishes, but were doing nothing to address our concerns and ignored our questions. They should have been fighting tooth and nail for us. Isn’t that what you pay them for?”
Finding an independent lawyer
Make hiring an independent English- speaking lawyer one of your very first tasks in your search for a Spanish property. That way, you will have your own lawyer on hand to check the first contracts you are expected to sign.
Start by asking friends and acquaintances for recommendations. Or contact the British consulate in the region you are buying in – it can e-mail or fax you a list of English- speaking lawyers in the area. My website, www.spanishpropertyinsight. com, has a list of reliable lawyers who specialise in real-estate law, along with contact details for all the British consulates in Spain.
Spanish lawyers specialise in individual areas of law, so be sure to hire one who is an expert in property law – and has a good working knowledge of the kind of market you are looking in. Costa agents can be rather hazy about rural property issues, and vice versa. In theory, a general lawyer can help you buy property but in practice the service will not be as good.
Working with your lawyer
You need to establish a good working relationship built on trust. But it is also essential to 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 services, while others charge on an hourly basis or take a flat fee (all fees attract Vat at 16%). With so many variables coming into play, start by asking for an explanation of the fees and an estimate of the hours involved. Be diplomatic when discussing fees – Spanish lawyers don’t like haggling.
Typically, you will be asked to pay a provision of funds of 1,000 (£690) or up to 50% of the fee when your lawyer starts working for you, with the remainder due once the purchase is completed. 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 lawyers at any time. To do this you should send a letter or a fax informing the lawyer of your decision to dispense with their services and giving them instructions to pass your file to your new lawyer by a certain date. If these instructions are ignored, 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.
The good news
To end on a positive note, the good news is that with the right lawyer the risks you run are insignificant, and no greater than when buying in the UK.
© Mark Stucklin (Spanish Property Insight)