Anyone in the history of home ownership will tell you that investing in bricks and mortar is a stressful business.
If you are looking to buy a property in Spain you may think that the romantic sheen of spending the rest of your days on the Costas will take the edge of making such a huge financial commitment, but don't be fooled. The Spanish property market is a tricky maze to navigate unaided. Without independent specialist Spanish legal advice to guide you through its varying twists and turns you could see your dream purchase turn into the sort of nightmare served up in the Daily Mail with alacrity.
But of course the horror stories of demolitions and 'land grabs' are by no means the norm for the savvy purchaser looking to invest/ retire in Spain. Location, location, location may be a popular mantra for property hunters, but when it comes to the Spanish property market preparation, preparation, preparation is the only way to avoid unnecessary stress and enjoy your dream home...
It is of vital importance that you cast your net wide with your initial search. Relying on one estate agent to show you potential properties is a sure-fire way of missing out on a bargain. A sole estate agent will be in a position to sell to you on their terms, as they will be the ones preparing the comparisons on properties. Think about conducting an online search first and then reaching out to several agents based in the town or area that you are looking to settle. Getting a broader view of the market will help you snap up the deal of a lifetime and help you avoid paying over the odds.
As with any financial transaction you make, big or small, impartiality is key. If you are unfamiliar with the Spanish language or the Spanish property market it may seem comforting to take tips and advice from the seller or the estate agent who are locals. It is worth remembering that the seller's and estate agent's interests are not aligned with your own. Agents and sellers will tell you want you want to hear and not necessarily what you need to know. That is why it is essential that you use an independent specialist Spanish property lawyer with no ties to the seller or the agent to avoid any conflict of interest and, above all, so that you receive the best possible advice.
Don't be pressurised
Assurances are cheap in the Spanish property market. Often, those who have their heart set on a property are coaxed into handing over hefty deposits by the estate may be told that there has been unprecedented interest in the home you have your sights on, but this hyperbolic talk should be taken with a pinch of salt. As deposits are non-refundable in Spain, if you have handed over money before full enquiries have been made on the property, and it turns out that your new home is not fit for purpose, you will be faced with the unenviable option of either cutting your losses with the deposit, or proceeding with the purchases in the hope that the unknown costs of fixing your property will not bankrupt you. Neither is ideal and both are very much avoidable.
If you are investing in a property that has yet to be built it is important to protect your financial investment from unscrupulous builders and developers. In a transaction of this complexity it is of vital importance that you seek independent legal advice so that your objectives are recognised and investment ring-fenced. Without the necessary due diligence on a company, as well as bank guarantees recognising and protecting your contribution, you could end up with nothing.
Even if your purchase has run smoothly, ignore ongoing expenses at your peril. With any property transaction there will always be taxes, community fees and council tax to pay. Failure to do so could have devastating consequences on your enjoyment of your new life in Spain.
Jonathan Eshkeri (E&G Solicitors in Spain)
(This article was first published in A Place in the Sun Magazine - Autumn 2014 issue 119)