Spanish Property Insight


Spanish Property Insight

Spanish Property Market Analysts

When buying property in Spain you should find an independent lawyer qualified to practise in Spain who you can be confident is working exclusively for you, with no conflict of interest. Never use a lawyer in Spain introduced by the people you are buying from, like an agent or developer, because in too many cases there have been conflicts of interest.

Take care when it comes to choosing your legal help in Spain. Just like anywhere some professionals are better than others, and the legal help you get in Spain can make a big difference to the way things work out for you.

How to find a property lawyer in Spain

To find a lawyer qualified to practise law in Spain, and offer you a service in English or other languages, check out the Spanish lawyers section of the business and service directory, when you can search Spanish legal firms by type of service and location.

If you have decided to buy property in Spain, then make your search for a lawyer to help you do your due diligence one of your very first tasks, before even contacting estate agents and developers and starting to search for property for sale in Spain. This gives you time to find a lawyer in Spain who has no connection to the companies you end up buying property from.

Avoid using a lawyer recommended by your estate agent or developer, and never use an in-house lawyer. If you have no option but to use a recommended lawyer, then try to get 3rd party references from other people before going ahead.

With a little effort you will have no trouble in finding an independent English-speaking Spanish property lawyer. One sensible approach is to ask friends and acquaintances for recommendations.

Lawyers that specialise in real estate law

Spanish lawyers specialise in different areas of law. You need a Spanish property lawyer who specialises in Spanish property law (derecho inmobiliario). Spanish property lawyers will not have to look up the relevant laws and regulations, will be familiar with the common problems, will be quicker and more reliable, and might know something about the reputations of many of the estate agents and developers in the region. A specialist property lawyer is the best option when buying property in Spain.

Ideally, you should hire an attorney based in Spain, and preferably in the region where you are buying. Locally based lawyers can easily visit the town hall of the municipality where you are buying, and may even know the mayor, the municipal architect, and the local Notary. In a country like Spain, where contacts count, this can be a big advantage when sorting out local problems.

Local lawyers are also more likely to know about regional urban plans, the problems specific to the region, and the reputations of local estate agents and developers. They are well placed to do the local due diligence, and can readily accompany you to the signing of the deeds before Notary. Lawyers who are not locally based have to operate over the phone, or through associates, all of which may decrease their speed and effectiveness whilst increasing the cost to you.

Having said that there are cases where foreign buyers are better off using lawyers based in major cities such as Barcelona and Madrid, or even Spanish lawyers in foreign capitals like London. This is especially the case when buyers need a high level of international fiscal expertise, or where an appropriate local lawyer cannot be found.

In the end what counts is the quality of the legal service you get. There are some first class Spanish lawyers based in the UK or other countries, and you might be better off with one of these than a mediocre lawyer based locally, or a lawyer who is too close to local developers and estate agents, and suffers from conflicts of interest. So a local lawyer has some advantages, but at the end of the day what matters most is a good lawyer with the right skill set and no conflict of interest, wherever they are based.

Get an independent lawyer in Spain

Very few foreign buyers have Spanish lawyers in their address book when they set out to buy property in Spain. So it should come as no surprise that many of them end up using the lawyer recommended by the estate agents or developers they buy from. A survey I once did in 2006 found that 63% of foreign buyers end up using the lawyer recommended to them by their estate agent. Of these 20% reported being very dissatisfied with the legal service they received, compared to just 2% who used a lawyer they contacted on their own steam. The conclusion is clear. You have a much lower risk of problems if you find a lawyer with no connection to the people you are buying from. One easy way to do that is to use a lawyer in our directory of lawyers in Spain. These lawyers will not be beholden in any way to the people you are buying from.

Another reason, at least in the past, why many foreign buyers of Spanish property ended up using a lawyer recommended by their estate agents was because they tend to buy in such a hurry. People on 2 or 3-day inspection trips are usually unprepared for the buying procedure, and end up signing contracts and paying reserve deposits on the last day before rushing to the airport. They simply don’t have time to find a lawyer for themselves, and feel grateful when the estate agent suggests a ‘very good’ lawyer who can help them, indeed who is waiting to receive them at that very moment – what a surprise! However, buyers who use these lawyers don’t realise what a minefield they are walking into, and end up hiring the very people they most need protection from. This tendency to buy in a hurry, and use the first lawyer to hand was common practice in the boom years of 2000 to 2008 when ‘free’ inspection trips were a big thing, though it is rare now. If you are going on an inspection trip organised and paid for / subsidised by property sales company, get a lawyer lined up before you go.

Avoid in-house lawyers who may have a conflict of interests

The worst mistake a buyer can make is to use the in-house lawyer of an estate agent or developer. In-house lawyers will, of course, draw up contracts in the interests of the company, and fight its corner if push comes to shove. You are probably better off doing all the legal work yourself with the help of a Spanish-English dictionary than using an in-house lawyer.

More commonly, though, estate agents in Spain recommended lawyers that appear to be completely independent. In many cases the independence will be genuine, and the recommended lawyer will look after the buyer’s interests. However, in too many cases the lawyer has a dependent business relationship with the estate agent that can undermine the legal service received by the buyer. Even when lawyers have the best intentions, estate agents can use a close relationship to put pressure on them to cut corners.

When buying something as expensive as property in a foreign country you need a lawyer who you can be certain is working for you and you alone. Because you can never be sure about their relationship, you should always avoid using lawyers recommended by estate agents or developers. And looking for an independent lawyer once a dispute has started is like closing the stable door after the horse has bolted. You need your own Spanish lawyer from the very start.

Managing the relationship with your lawyer in Spain

Don’t sign or pay anything to an estate agent or developer until you have had an independent lawyer who specialises in Spanish property law give you the all clear.

This also applies to reserve payments (typically anything up to 10,000 euros) when buying off-plan from a developer. In the past, too many investors have made this initial reservation payment without any legal advice whatsoever, often under the assurance they will get their money back if they change their mind. Estate agents and developers often put you under pressure to take this step, insinuating that you will lose the opportunity unless you move fast. The pressure is more a reflection of the estate agent’s anxiety that you will change your mind, or find something better from someone else.

Once you have found and hired an independent lawyer you need to establish a good working relationship built on trust, and avoid giving any impression that you lack confidence in your lawyer. Having said that anything is possible, so always keep copies of all the important documents you pass to any law firm in Spain, and keep notes of conversations and decisions.

Many law firms in Spain charge between 1% and 1.5% of the value of the property for their legal services, whilst others charge on an hourly basis or a flat fee (all fees attract VAT). Just be warned that there are considerable variations in fees.

What to do if things go wrong

If you have doubts about your Spanish lawyer, you have the right to change to another lawyer at any time.

To do this you should inform your lawyer in writing, and giving instructions to pass your file to your new lawyer by a certain date.

If your instructions are ignored you should send an ultimatum to your former lawyer threatening to complain to the local lawyers association, which will be a branch of the Spanish law society (colegio de abogados), and then do so in the last resort.

How to lodge a complaint against your lawyer in Spain

First of all, confirm that your lawyer was actually an abogado qualified and registered to practise law in Spain, rather than some sort of para-legal, or fake professional (it happens more often that you might think).

All bona fide lawyers should make their collegiate number or numero de colegiado prominently available, for example in the footer of emails. Find this number (or demand to know it) then look them up in the national database of certified lawyers in the Censo de Letrados online database using their name, surname, collegiate number, and the Spanish province where they practise. If you don’t have all the information above you can do a partial search as see if you can find them in the results.

Once you have confirmed their professional status as a certified Spanish lawyer registered with one of the provincial lawyers associations, get in touch with that association and ask how their complaints procedure works, then follow that procedure, which might differ from one association to another in small ways. Make sure you have paperwork to backup your complaint.

How do you find the contact details of the relevant association? Easy, just search using the province and college of lawyers in Spain. So, for example, to find the contact details of the Malaga Bar Association, just search for ‘Colegio de abogados Malaga’, though Google will also probably given you the right results if you simply search for ‘Malaga Bar Association’ or ‘Malaga Law Society’ too.

The website of each provincial bar association should have its contact details in some prominent place, normally on the home page. Ring and find out how to complain. You might need the help of a Spanish speaker.

If you have proof of malpractice, you could also consider complaining to the local consumer office run by the government to protect consumer rights (search online for your local ‘defensor del consumidor’, which might be at a municipal or regional level). There are also several privately run consumer organisations that you can approach for help like the FACU and the OCU.

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.

Case studies

Jeff Wilson from Kent

Jeff Wilson from Kent, who bought an off-plan apartment in Alcaidesa on the Costa del Sol through Ocean Estates, used a firm of solicitors recommended to him by Ocean called DVA. He did not know that Fernando Del Valle, head of the company, and recently arrested on charges of money laundering, was also the administrator of Alleerton Holdings – the developer he was buying from. Ocean recommended him a legal firm with an obvious conflict of interest, and Wilson feels that the legal service was woefully inadequate. “I trusted Ocean Estates and never imagined they would recommend me a lawyer alleged to be thick as thieves with the developer” says Wilson.

Malcolm and Cipa Allum from Manchester

Malcolm and Cipa Allum from Manchester also used DVA on the recommendation of Ocean Estates when they bought a townhouse off-plan in Nueva Andalucia near Marbella. Having been shown attractive plans and specifications by a sales rep from Ocean Estates they gave a lawyer at DVA power of attorney to sign a purchase contract on their behalf. However, the purchase contract that DVA signed included a different set of plans, a detail they were not notified of when they paid the deposit of 100,000 Euros, and which would have made them change their minds. The Allums are now disputing the purchase, and feel that DVA made little effort to look after their interests, appearing to side with Ocean Estates and the developer rather than them.

“The legal service was never better than cursory,” says Malcolm Allum. His Italian wife Cipa is more expressive “DVA were never on our side. They were pushing us to complete against our wishes but doing nothing to address our concerns, ignoring our questions and responding with irrelevant answers. They should have been fighting tooth and nail for us. Isn’t that what you pay them for?”