6 Questions for Buying Resale Property in Spain

Thursday, May 12, 2016

6 Questions for Buying Resale Property in Spain

Here Jonathan Eshkeri of E&G Solicitors in Spain looks at the best questions to ask when buying Spanish resale property.

1. Do they actually own it?

This might sound obvious, but the individual selling the property must be the registered owner. Check this via the local property register.

If the property is owned jointly, all owners need to sign the documentation to sell it. If one or more of the owners has passed away, you ought to confirm that that their estate has been administered prior to you starting negotiations.

2. Are there any debts associated with the property?

While checking the credentials of the person selling, also check for any charges registered against the property.

Unpaid IBI (similar to council tax) can result in a registered charge if it is unpaid for long enough, as can outstanding community fees. In addition the Spanish tax agency can register charges in respect of unpaid personal taxes, or inheritance tax.

If there is a registered mortgage (a type of charge), make certain the purchase price will clear the debt and, if not, establish how the seller will cover the balance.

Check that any charges will be paid and cleared prior to the transfer of ownership, or by the day of completion of the sale and purchase at the very latest. Failure to do so could result in the charges remaining on the register, so that your ownership of the property will be subject to whatever debt the charge is securing. You don't want to be left with the seller's mortgage as well as your own!

Also, make sure all utilities and community fees have been paid by the date of completion, or at least that you have retained sufficient funds to pay them after completion. For instance, if there is an outstanding electricity bill, you can insist on deducting the amount of the bill from the purchase price. That way the seller still pays for his or her debts.

3. Was the property built with planning permission?

This question is vital. Enquire at the local town hall whether there are any pending planning enquiries or fines outstanding relating to the original build, or subsequent building works.

If there is anything outstanding, establish what needs to be done to settle the matter. Make this the responsibility of the current owner to resolve, including any monies owed.

Also, make sure that any works carried out after the initial build have been registered, e.g. an extension, or a swimming pool. If something hasn't been registered, get the seller to sign a 'declaración de obra nueva' and complete the registration retrospectively. However, beware, the fact that an extension or a pool has been registered, does not mean that it was built lawfully. Check that planning permission was granted for everything you are buying.

4. Does the property hold all necessary certifications?

Make sure the seller has all the documentation required to sell the property. This includes the Energy Performance Certificate that confirms that the electricity supply meets the latest safety and efficiency standards.

The other main document is a 'cédula de habitabilidad', or a 'licencia de primera ocupación'. This provides evidence that the property is recognised as a dwelling and, in many cases, will be evidence that planning permission was granted for the dwelling. Once again, check that any add-ons have received planning permission, such as pools and extensions.

5. Should I arrange for a survey?

Yes, particularly if you are purchasing a single family home. Whilst it is not a legal requirement to have a survey on aSpanish property, we strongly recommend that you do get one. A professional's opinion will put your mind at ease and make you aware of any issues. Anything highlighted needn't stop you from buying; it will just allow you to go into the process with your eyes open.

6. Anything to be aware of if I'm buying a rural property?

If you are considering buying a rural property there are a few extra questions to ask:

Is the property in a protected area?

If so, it could limit what renovation/redevelopment you can do, if any at all.

Is the building registered as a dwelling on the land you are buying?

If not, you may need to have it registered, along with any outbuildings or pools.

How is electricity supplied?

e.g. is it solar powered, generator powered, or connected to the mains?

How is water supplied and sewage dealt with?

Is the property connected to the sewer system, or does it rely on a well? If there is a septic tank, where is it and how often does it need to be emptied? Have the necessary permissions been obtained from the local authority, or does it comply with current rules?

Are there any rights of way that cross the property?

Consider how this might impact upon your plans for the property. Rights of way may affect your quiet enjoyment of the property.

Is the local authority responsible for maintaining any access roads?

If not, you may find that you are required to maintain these at considerable cost.

Originally published in the A Place in the Sun magazine - Issue 125