Why should you use a lawyer in the process of buying a property in Spain ?. Notary and lawyer/solicitor in the process of buying properties in Spain.
The Spanish buying process is very similar to other countries. Foreign investors in the Spanish system will find many similarities with their home countries.
But, however, also we may find many differences.
The most notable difference is the position and functions from the lawyer and the notary functions.
I.- SOME EXAMPLES IN OTHER COUNTRIES OF EUROPE:
A) BRITISH PROCESS: In the British buying and conveyance process, the notary is not involved at all in the process of a property sale. Seller and buyer are assisted in the transaction with the help, each one of them, with their own lawyer. Then, the buyer’s lawyer, and the seller’s lawyer, are the ones who, from the first steps up to completion take control of the sales process, doing and conveying the change of name of the property, and the payment of the price, taxes, etc. Both solicitors are the ones who made the contracts, take care that each party fulfils its obligations, payment of taxes, they organize and receive payments and complete the registration of the property to the new owner, etc.
As conclusion: Notary does not take part on the British conveyancing system of buying and selling properties, and there are two lawyers/solicitors, one on the buyer, and the other by the seller, who participate in all stages of the process.
B) PROCESS OF CONTINENTAL EUROPE: French, Belgian, Swiss, Dutch, German, and others: In these countries, on the properties’ buying/sale process, the presence of the notary is essential. Notary does everything. Unlike the British system, in the continental system, both parties, buyer and seller, usethe notary, as the intermediary of the transaction, from the very beginning to the end, and he makes the following:
- Approximation of parties, and the formalization of the transaction by contract.
- Control of the fulfilment of each party ‘s obligation.
- Performs of legal, administrative and tax research of the property.
- Urbanistic and construction research of the property.
- He makes and receives all the payments from the sale.
- Complete the deeds of sale.
- Complete the registration in the land register on behalf of the new owner.
- Report and pay taxes from the purchase and sale
- Make the change of the contracts of supply of water, electricity, local taxes, etc.
Conclusion: The function of the LAWYER in the buying/selling process in these countries is zero. Lawyer is not involved in this process, except when there is litigation resulting from judicious litigation.
II.- SPANISH CONVEYANCE PROCESS
It can be said that the process of buying Spanish is a mix between the two systems considered: The «British» and the «Continental».
In the Spanish conveyance process, the notary is really important, but not enough to make a purchase with total guaranties and security. The presence of the Spanish notary in the purchase process is essential because, like other countries such as France, Belgium, Holland, etc. , the sale cannot be registered in the land register without having gone through the formalization of notary acts (or «escrituras»).
The notary also checks essential information such as:
– The ability of the parties to buy or sell. That is, if the buyer has the legal capability to buy and the seller to sell.
– Study of limitations and charges on the property.
– The study of property documents, such as building permits and licenses, etc.
– Verification of the way of payment, etc.
But unlike the «Continental» notaries, the Spanish ones does not do more than the functions mentioned. That is to say about the functiono of the Spanish notaries:
- LEGAL AND URBANISTIC STUDY: The notary does not make a construction/urban study of the property as consulting planning. There is information on the property at various sources such as the Cadastre,, or Town Hall, Urbanistic and Planning Development Departments, local and regional departments, which are not consulted nor verified by the Spanish Notary during the purchase process.
- Notary does not check if the property has any kind of penalties or fines for the construction, or for example, a demolition order.
- Notary does a check on the registration of the property, but, in Spain, the majority of the construction penalties, and fines are not recorded in the property/land registry.
- There is no study or verification of possible future development projects likely to affect a property (eg, expropriation, or a future highway, or even an urbanization project, etc.).
Unfortunately, there are cases in Spain where the buyer has completed the purchase without the assistance of a specialized lawyer, with a perfect notarial formal process, and perfectly recorded in the cadastre and the land register. So, formally perfect. And then, after the purchase process, he found that there was missing a license or certificate of occupation («certificate of habitation»), or even had an expropriation order for a highway project, for example, or that the property had urbanisation charges, or part of the plot must be given or lost to the administration for extension of a public road, etc .
This lack of planning study by the notary creates particular problems in the following properties:
– Properties in urbanisations: For example, the builder did not complete the urban development, and the urbanisation infrastructure, and then, there are works of urbanization without finalizing, which must be completed, and paid, sometimes, by the owners.
– Properties, houses, or villas in rustic areas or COUNTRYSIDE: These properties are generally in the rural area and outside the urban areas. These properties, typically villas or vacation homes can have problems such as:
* Lack of license or construction of the main dwelling
* Lack of building license or license for an eventual extension of the main building, or its accessories (pool, garage, etc.).
* Problems of identification or definition of the boundaries of the plot or land, etc.
* Urbanistic and construction penalties, fines, or demolition orders, etc.
– Villas and apartments in old housing with serious infrastructure problems or pending the development of project or improvement, etc.
The above information will not be obtained by a notary in Spain.
Unfortunately, in Spain, legal, administrative, and planning information affecting the property, are not condensed into a single point of information, as it should be the land register. In Spain, the information in the land register, although essential, is not complete.
The information contained in the Property/Land Registry in Spain does NOT collect ALL the necessary information that affects the property.
- CONTRACTS AND PAYMENTS: The notary prepares the payments of the property, nor chooses nor prepares the sales contracts. So, the buyer does not pay the purchase price to the notary. In Spain, payments of the price, or parts of the price, are paid to the lawyers, the real estate agency or the seller.
At our firm, customers sometimes ask us the bank account of the notary to make the payment of the purchase price, and are surprised when we inform that in Spain, the notary does not receive payments, and that payments must be paid directly to the seller, or his lawyer, or to the real estate agents
- REGISTRATION AND CHANGE OF OWNER IN EL REGISTR FONCIER: The notary, once the process of purchase is completed, with the signing of the notary deeds of sale, has no obligation to proceed to the registration of the transaction in the register land. Therefore, there are notaries who do this management, and there are others that do not realize it. And, even in the notaries who perform the registration service, do not come to register the purchase if the buyer does not expressly request it!.
As lawyers, we have seen many situations where sellers have discovered that even their deeds were not registered at the Land Registry. At the time of the purchase, current owners went to the notary, and once the purchase was completed, and being confidents that the notary would make the necessary actions to complete the registration steps, they did not instruct the notary to act the registration in the land register. So, the notary never did it!. Therefore, over the years, have found that the properties were still on behalf of the previous owners, because he did not give the order to the notary, and were not assisted by a lawyer in your process.
- CHANGE OF OWNER OF WATER AND ELECTRICITY CONTRACTS AND OTHER MUNICIPAL TAXES: The notary DO NOT manage the change of ownership of water supply contracts, electricity and others like the property tax or municipal.
Also, notary does not arrange the domiciliation of the payment of these services in the bank account of the buyer by direct debit.
- CHANGE OF OWNER TO THE CADASTRE/COUNCIL TAX: The notary DO NOT manages the change of ownership of the parties to the cadastre. They communicate to Cadastre, but do not conform this is done, and instruct Cadastre to pass the order of payment of the tax by direct debit to the owners bank account.
- CERTIFICATE OF HABITATION As explained in other sections of this site, the buyer must obtain a certificate of occupancy, in place, also called “Certificate of habitation”. Out of new properties (the ones bought directly from builders), the notary does not request to provide a valid certificate of habitation to the vendors.
REAL ESTATE AGENTS: In addition to the above, the activity of the real estate activity is not regulated in Spain. Activity of offering properties in the market for sale is «free». As difference with other countries where the proffession of the agents is strcitly controled and regulated, this is not the case in Spain.
So, there is not any guaranty in Spain to confirm that the real estate agents control their proffession, or simply, that they have the minimum legal acknowledge to know about the legalities of the properties they are offering in the market.
So why use a lawyer IN SPAIN TO BUY IS AN APPROPIATE DECISION?
As stated above, to have a complete idea, and to get information on the buying process, you need to get this information from different local, regional sources, land registry, planning departments, and also to consult with architects and other specialists, etc … ALL THIS WILL NOT BE MADE BY A SPANISH NOTARY.
To do this you will need to get the services of a lawyer who can get all the information from different sources and to check all the ncessary legal and administrative points.
Besides of this, unfortunately, this process is quite complicate so, NOT ALL LAWYERS ARE VALID FOR ASSITING IN PROPERTY TRANSACTIONS. So you need a lawyer who, besides that speaks your language, and who knows real estate law, he must also be a specialist in construction and urban planning law, and to count in his team with architects, and other professionals and technicians, to have enough capability and skill to obtain all the necessary information, and to complete of all aspects regarding the purchase of the property.
Therefore, at this stage, once the purchase decision is solid, TLA, our firm, advises you to:
– Contract a lawyer. There are companies or agents who present themselves as lawyers and give «legal service», or offers their selves as “conveyancers”, and, in fact they are not lawyers. Sometimes they are not even Spanish!.
– Contract a lawyer registered in Spain. Do not be tempted to use lawyers in your own country. Only national lawyers know the system of buying and the Spanish buying process.
– Lawyer must speak your language. Avoid lawyers who do not speak your language, and who use secretaries or assistants or translators. Your lawyer must speak your language perfectly to communicate directly to you, not through secretaries or translators.
– Check that the lawyer is a specialist in Urban and Construction Law. He must be an expert in real estate law, but also, he must understand of urban planning and construction.