Eleven Important Steps

Many people choose to buy a new property. Not one that is standing empty, completely finished, for these are rare occurrences, but a property that has yet to be built. It may be identical to a show house or built to an individual design to be constructed from a builder’s plans. We will now follow this standard legal and administrative trail. It starts with the decision to purchase and follows clear steps to a conclusion in the notario’s office.

A Plan Of The House

It makes sense to have a plan of the house. Not a glossy brochure, nor a three dimensional line drawing, but an architect’s plan (see Figure 11) which shows the dimensions of each floor and each room in square metres. The overall size of the house is important to determine its market price, the valuation for any mortgage, the insurance premiums and the assessment for local taxes.

Locating The Plot

It also makes sense to have a line drawing locating the plot. This is called plan parcial, a Spanish term meaning a plan of parcels, or plots of land, which is registered with the planning department at the local town hall. Firstly it ensures the urbanisation is legal by registering it with the town hall. Secondly it shows other adjacent developments and, most importantly, if any major roads are planned close by.

While a line drawing, supplied by the agent or builder, will suffice on most occasions, the plan parcial, from the Urbanismo department at the Ayuntamiento (town hall) is the approved source.

Reservation Contract

This document represents the first step in the buying process. It is an outline agreement to reserve the property. It should contain as a minimum the following:

• Name, address, telephone number and passport number of the purchaser.
• Name, address, telephone number and the business or personal identification of the agent.
• House type, plot number and address of the property.
• The price in Euros. This should clearly state if IVA (Value Added Tax) is included in the price.
• The reservation, deposit and payment formulae. Initially this normally involves a non-returnable deposit.
• Signed and dated by both parties.

The nota Simple

This document, which translated means a ‘simple note’, is issued by the Land Registry Office and is a copy of the Property Registration details (see Registro de la Propiedad in this chapter). For a property yet to be constructed, it will show proof that the person selling the property is the registered owner of the land and that there are no debts on the land. It should be noted that a similar methodology for existing properties is also followed, showing details of the present owner, if the property has an outstanding mortgage or loan or if it has any debts registered against it.

The significance of the document is clear. It establishes that the person building or selling the property or land is the person with the right so to do.

Obtaining a copy of the nota simple is straightforward. Firstly locate the Registry Office with jurisdiction over the property or land. This is not always in the nearest town or village. Secondly complete a request for information form and pay a small fee, then return in a few days to collect the nota simple.

The All Important Contract

While conveyancing procedures end with the notary, if there is anything commercially wrong it is too late for alteration. For this reason the purchase contract is the most important document in the Spanish buying process. The signing of the contract signifies the following:

• The plan of the house and the location of the plot is satisfactory.
• The nota simple has been checked and is in order.
• The contract has been read and understood.
• Signing the contract triggers the release of a normally non-returnable cash deposit.
• The purchaser has the necessary monies, or mortgage, available to complete the transaction.

An English language copy of a contract is reproduced in Appendix 1. It is well written and comprehensive. It is normally set out paragraph by paragraph in Spanish and the mother tongue of the purchaser, thus ensuring no ambiguity. The key points are highlighted below:

• It reconfirms all previous details, namely the parties to the agreement; the ownership of the land, its registration and freedom from debts; details of the plot; the size and description of the property.
• It sets out in detail the payment method, time, currency and amount; financial penalties for failing to complete; emphasises the sale includes the services of water and electricity and the use of the community facilities.
• Confirms that the purchaser respects the obligations of the law surrounding the Community of Owners.
• This particular contract was drawn up by a builder. It is ambiguous on a firm date for completion and weak on the penalties for failure to complete on time!