Although it is not mandatory to buy property in Spain assisted by a Lawyer, it is highly advisable that you do; particularly if you are a non-resident. Lawyer and regular contributor Raymundo Larraín Nesbitt takes us through the advantages of having legal representation when you buy a property in Spain.
Marbella-based Larrain Nesbitt Lawyers has over 16 year’s taxation & conveyancing experience at your service. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain. You can review here our client’s testimonials.
By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
8th of November 2016
You would never buy a property in the UK without instructing a solicitor or conveyancer and yet a surprising number of people choose not to instruct a Lawyer or legal representative when buying abroad. If anything, it is even more important to obtain good legal advice when buying overseas as it is highly likely that you will be unfamiliar with many of the key processes.
While it is possible to buy a property in some overseas jurisdictions, including Spain, without having to appoint a Lawyer, it would be very unwise to do so. Buying a house is one of the biggest investments most people make in their lifetime. So why take the risk by not obtaining proper legal advice?
Only a qualified and registered abogado (lawyer) can give you legal advice in Spain. Beware of intruders posing as Lawyers who meddle in conveyancing. The golden rule is to always ask a Lawyer in Spain for his registration number (número de colegiado).
Buying Property – Avoid Horror Stories
- Buyer buys a rural villa which is unregistered, does not have planning permission and is set to be demolished by the Authorities.
- Buyer buys off-plan property from a developer who is tethering on the verge of bankruptcy. The buyer is mistakenly confident because he has been issued a bank guarantee by the developer’s lawyer purportedly ensuring his stage payments when in fact this guarantee is only legally enforceable as from the moment a developer attains planning permission from a town hall; not a moment before (you can read my article on this). In the event of filing for receivership a buyer would lose all his money despite having a bank guarantee in his possession.
- Buyer buys from someone pretending to be the owner.
- Buyer buys a property that is different to the one shown by the vendor.
- Smug buyer ‘under declares’ part of the sales price because “that is how things are done in Spain”. A year later he is landed with a huge tax bill as a result of the complementaria or bargain-hunter tax.
- Buyer buys an offplan property without a lawyer thinking the bank will check his title is clean and above board. What the buyer doesn’t know is that the property has not attained a Building Licence and all his stage payments are unsecured despite the bank’s reassurances to the contrary. This is a consequence of Spain’s new Bank Guarantee law. Buyer loses all his money without any legal recourse.
- Buyer buys an offplan property without appointing a lawyer as he (mistakenly) thought his lender would do all the legal checks. Ends up losing all his money.
- Buyer buys property with tenants already inside. They can legally stay until the expiration of their tenancy agreement in accordance with Spain’s Tenancy Act (which can be up to 8 or 10 years).
- Buyer buys a property with debts, charges or encumbrances. Whoever is the owner of the property will be held liable for these debts.
- Buyer buys a luxury frontline beach penthouse and pays full price. Years later, on selling, he is informed by the buyer´s lawyer that following Spain´s Coastal Law the property is not classified as freehold and what he bought is known legally as an ‘Administrative concession’ or Government leasehold. He will only be offered a fraction of the price he paid for it making a huge loss. More details in my article Proposed Amendments to Spain´s Coastal Law – Amnesty.
Buying – Ten Reasons to Hire a Lawyer in Spain
1. Legal independence. Larraín Nesbitt Lawyers is totally independent. You should avoid using a lawyer recommended by an estate agent and most certainly never use the developer’s own Lawyer. If it is gratis, it is for a good reason!
2. Registered professionals. Larraín Nesbitt Lawyers only employ qualified and registered Abogados. Registered abogados are subject to disciplinary action by the Bar Association so must conduct themselves honourably to continue practising else risk being disbarred. We are members of the British Chamber of Commerce, Spain.
3. Professional Indemnity Insurance. Registered lawyers have Professional Indemnity Insurance in place in the event of malpractice or negligence. Currently this cover stands at €1,000,000 with Larraín Nesbitt Lawyers.
4. No language barrier. All our staff speak and write English fluently, besides other languages. Nothing will be lost in translation!
5. No hidden extras. We will provide you with a written quote so you are sure that there are no unpleasant surprises. We will provide you with a clear breakdown of costs in English beforehand.
6. Free escrow service. Larraín Nesbitt Lawyers keeps a separate client account.
7. Accountability. We will give you an invoice, statement of all expenses and written advice. Larraín Nesbitt Lawyers will put everything in writing.
8. Transparency. You will receive a written report in English, clearly setting out the terms of your contract, with a description of the property you are buying including any community facilities, such as pools, golf course etc.
9. Ongoing communication and post-service. For resale properties, your lawyer will inform you about the description as described in the Nota Simple and Title deeds. Remember; it is your responsibility to check the description of the property carefully with what you have seen and inform us if there are any differences. Some building reforms are undertaken without proper approval (unregistered property extensions) and there is no way for your lawyer to know about this. Which is why we recommend arranging a snagging list beforehand.
10. Conveyancing can be arranged in your absence. If granting a Power of Attorney, our law firm will ensure you understand what powers you are giving and for how long those powers last. Normally the powers you give your lawyer are on-going unless you expressly revoke them.
Hiring a seasoned Lawyer, in my experience, pays for itself on all the money you stand to save on avoiding the most common pitfalls.
Because impartial legal advice is priceless.
“Managers keep the rules, leaders break them.” – Sir Richard Branson.
English business magnate, investor and philanthropist. Founder of the Virgin Group which controls more than 400 companies.
Larraín Nesbitt Lawyers, small on fees, big on service.
Larraín Nesbitt Lawyers is a law firm specialized in inheritance, conveyancing, taxation and litigation. We will be very pleased to discuss your matter with you. You can contact us by e-mail at email@example.com, by telephone on (+34) 952 19 22 88 or by completing our contact form to book an appointment.
Tax & legal services available from Larraín Nesbitt Lawyers
- Conveyancing – Buying
- Conveyancing – Selling
- Fiscal Representation (Non-Resident Income Tax)
- Will Service
- Buying Distressed Property in Spain – 8th August 2011
- Buying Resale Property in Spain – 21st February 2013
- Buying Off-Plan Property in Spain – 8th of June 2013
- How to Buy Commercial Property in Spain – 4th July 2014
- How to Buy Rural Property in Spain – 8th August 2014
- How to Buy Property in Spain Safely – 10th October 2014
- House Hunting in Spain – Interview with The New York Times. June 2015
- Taxes on Buying Spanish Property – 8th July 2015
- Non-Resident Taxes in Spain – 8th December 2015
- Buying Property in Spain – 10 Reasons to Hire a Lawyer – 8th November 2016
- How to inspect an off-plan property overseas – Q&A with The Sunday Times. July 2017
Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.
2.016 © Raymundo Larraín Nesbitt. All rights reserved.