Editor’s note: Buying property in Spain, be it a plot, apartment or villa, is often one of the biggest investments of a lifetime, in many cases amounting to a sizeable chunk of the buyer’s savings. It’s important for buyers to protect their investment by hiring a qualified lawyer to do the legal searches. Rafael Berdaguer, a lawyer with many years experience working in Marbella and the Costal del Sol, explains why.
If you are a foreigner buying property in Spain it is even more advisable, and a question of common sense, to use an experienced lawyer who can fluently communicate in your language, or at least in the universal language: English.
The first thing a lawyer has to determine is whether the real estate you intend to purchase is legal or not. I live in a town, Marbella, where the Town Plan establishes that some 18.000 dwellings have been irregularly built. I suggest at this point reading for a bit of background our article titled: Marbella 2010 Town Plan null and void: return to the 1986 Town Plan.
Some of these homes can be legalised, but there are others whose existence depends on the decision of a Court of law following a judgement declaring them null and void. In cases where there are problems, one must make sure they can be legalised by checking all facts: what kind of planning consent was obtained, whether there is any proceedings to redress the planning order being followed by the local council, or competent body of the administration, whether there are proceedings pending on aiming to make the building licence null and void or whether there is any court judgment resolving that the property is illegal and must be pulled down.
For those who intend to purchase in the countryside a legal search is also very important since it is in this type of land where most illegal constructions have been built and only few of them can be legalised.
The document that is supposed to give the purchaser comfort to a legally built house is the First Occupation Licence (FOL). This is a confirmation from the Local Council that the property has been built in accordance with the plans for which the planning consent was granted, and it is ready and qualified for the use for which same has been built. However, in Marbella, for example, there are many properties with a FOL that is irregular as the planning consent with which they were built was not legal. So one has to take into consideration that even if there is building consent and the house has FOL this does not necessarily mean that it is a legal property.
All these circumstances may affect the saleability of a property as a prospective purchaser may have difficulties getting a mortgage, something which should be taken into consideration at the outset. Also prospective purchasers may look into the potential difficulties for a property in irregular situation when the time comes for them to sell.
In parallel to this one must verify by conducting the proper searches at the Land Registry whether the property belongs to the person or company selling it, whether such property is free from charges, and if there are charges that these can be cancelled prior to concluding the transaction. In addition to this one must make sure that all local dues, taxes and community fees on the property are paid up to date and that there are no issues involving the community of owners where the property is which may significantly affect the property to be purchased.
Once the legal standing of the property is established, this must be checked from a physical point of view. For this, if the property is less that 10 years old, there may not be necessary to carry out a survey or inspection of the property as it should count with an insurance against structural damage. But for properties over 10 years there is no insurance cover and therefore the purchaser must employ a surveyor to inspect the physical standing of the property and its installations as otherwise he may not have other recourse than to litigate later on, something which it is not advisable due to the way Spanish Courts work.
There is some other compulsory documentation that the vendor has to provide such as the Certificate of Energy Efficiency (CEE). This document just gives you an idea within a scale as to how efficient a property is from the consumption of energy and should contain measures which can be taken to improve the efficiency in the consumption of energy. This is something good for new properties as it encourages developers to build more energetically efficient property, but in my opinion is a useless measure for old properties as it involves additional costs for the vendor, and delays in the completion of the transaction as in most cases the purchaser will take no notice of this document. However, it is a good starting point to create awareness amongst buyers to acquire energetically efficient properties especially if they have just been built.
To summarise, when it comes to investing a considerable amount of money in a property in Spain make sure you engage an experienced lawyer to do all the legal and other searches. That way you can avoid problems at the time of purchase, and ensure that when the time comes for you to move on, there are no problems at the time of sale either. That also increases your chance of making a good return on your investment.
Lawyer with the firm Rafael Berdaguer Abogados based in Marbella, Spain.
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