Private contracts

[Anonymous]

Here’s one for the legal faction.A French friend has been offered a house which he loves.but has been told by his lawyer that their is a private contract of ownership between two parties which will be resolved on the day of the completion.His only worry is, could this be the only one.Question.
If you buy a property and somebody comes along later waving a private contract that points to ownership or a charge on the property, what if any validity does this have in Spanish law. ❓

[Anonymous]

Strange question. I’m sure it’s the same in France or in the UK.

The -almost- only ownership there is is that of the Land Registry which is determined by completion at a Notary.

You draw up a private contract between the parties and a date is specified to complete before a Notary.

What happens if the vendor has signed more than one private contract to sell ? Well in these private contracts there is usually a clause that states that if the vendor pulls out they will have to return double the amount of the option which normally amounts to 10% of the value of the property. So the vendor would effectively be liable for 20% of the agreed sales price of the property if he pulls out within the deadline to sell the property to someone else.

Once you complete at the Notary and lodge your Title Deed at the Land Registry you are “safe” if someone comes along with a private contract claiming “ownership”.

The “legal faction”, I like it. 🙂

[Anonymous]

Sorry my posting wasn’t too clear.(my english is poor).The private contract I refered to was one drawn up with a member of the family of the owners of the house signing over rights of ownership of the house until a family loan had been payed.

[Inez]

Perhaps you mean a compra venta? Land owned for years with no mortgage etc was bought and sold on this.

[Inez]

Or an option to buy

[Anonymous]

It seems that the land registry entry is in the name of the seller but they signed over the right to the property to another family member who will attend on the day of the signing in the notaries office.

[Inez]

A power of attorney then. You need to see what his wers are but if he is acting on behalf of the owner it should be ok. Just ensure you have good legal advice!

[Anonymous]

Hi Inez I think in this case the private contract was maybe used to try to bypass the Spanish inheritance laws or just to sign over ownership of the house without paying taxes.Just wondered if this is common practise?Something I’ve never come across before but we learn something new every day.

[Anonymous]

You do often find that a property is “owned” by somebody who has “inherited” it (I think to avoid taxes) but never had the deeds etc changed and so if you were to buy such a property, on the day of signing, the “owner” has to inherit the house briefly in one transaction and then you buy it from them 5 mins later! I had to do this with my first property purchase here.

[Anonymous]

Thanks HB that is the sort of contract I mean.Was begining to think it was perculiar to Valencia.My friends worry is that six months after completion somebody might knock at the door with another PC and claim title to the house.Just wondered if one stands up in Spanish law.I would have called my ex employers to speak to their lawyer but being from Madrid if you ask him the time and he replies you expect a bill in the post. 🙂

[Anonymous]

@Drakan wrote:

Strange question. I’m sure it’s the same in France or in the UK.

The -almost- only ownership there is is that of the Land Registry which is determined by completion at a Notary.

You draw up a private contract between the parties and a date is specified to complete before a Notary.

What happens if the vendor has signed more than one private contract to sell ? Well in these private contracts there is usually a clause that states that if the vendor pulls out they will have to return double the amount of the option which normally amounts to 10% of the value of the property. So the vendor would effectively be liable for 20% of the agreed sales price of the property if he pulls out within the deadline to sell the property to someone else.

Once you complete at the Notary and lodge your Title Deed at the Land Registry you are “safe” if someone comes along with a private contract claiming “ownership”.

The “legal faction”, I like it. 🙂

Hi Drakan I always think of lawyers as factional 🙂

[Author]

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