MALLORCA INVEST

HANS OLOF SAVASEN

Cyberspace Real Estate @gent

World Wide Real Estate $ervice

If you are looking for a piece of Paradise, this is a great place to start your quest”

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Before paying for your property you should take a few things into consideration and these should never be forgotten, otherwise you might find yourself without the property and in trouble trying to recover your money. Even though these things rarely happen, if you want to be sure they don’t happen, here are a few tips on what you should look out for.

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Make sure that the seller is actually who he says he is, i.e. check the Land Register where you can find all the information regarding the property. You should also ensure that the property is clear of any debts such as mortgages, legal seizures or even some remaining revelatory conditions which might exist on a previous contract signed by the owner.

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Check in the Town Hall that all the taxes regarding the property have been paid by the owner, because the Spanish Public Treasury can reclaim them for up to five years after they were due.

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Find out if any urbanistic (building) infractions were committed in the construction work. Possibly work done without the necessary building License or maybe exceeding the conditions held in that License or even work done outside Land Planning may bring you problems after your acquisition.

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In the event that you wish to build on the property you propose to buy; before buying you should find out what your building limitations are, i.e., how many square meters can be constructed (this usually depends upon the size of the land) volume, hight allowed. This information is relatively easy to find in the Town Halls who will be pleased to advise you on this matter.

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All of these aspects which I consider of vital importance as well as others depending on the above mentioned, should be studied carefully and cleared by the buyer before going to a Public Notary and making the inscription of the title deed in the Land Register.

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The Notary, whose main function consists in giving public faith of the identity of the signing parties, as well as defining the object of the contract, the price and form of payment, may or may not check the situation of the property in the Land Register, but this is something that the buyer has to look after in his own interest.

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Regarding the inscription of the property in the Land Register, contrary to some European legal systems where the plain inscription in the Land Register automatically transmits the property, the legal system in Spain doesn’t consider the inscription as constitutive - now what does that mean? Simply that the laws in Spain allow the property (as well as other rights) to be transmitted without it being registered. For example, you can sell or buy your property by means of a private contract without it being registered and the property will be fully transmitted

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The derived advantage of inscribing your title deed in the Land Register is that the inscription certifies to whom the property belongs and it’s a valid assurance for anyone who needs to know. This also protects the property from inscriptions attempted by others (banks, Public Treasury, creditors). These legal guarantees will not cover your purchase if you only use a private contract, as the contract conferred in this manner will only be effective between the signing parties, buyer and seller. Therefore it could be possible for a third person (bank, creditors, etc) to inscribe charges such as mortgages or even seize the property for debts left by the last owner.

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The ideal purchase operation for someone wanting to buy, would be where, regardless of whether you’re planning on paying the full price immediately or by instalments, the operation is done through a Public Notary, who will give official credence to the contract, the signing parties, the price and the object of the contract.

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Another item to be considered is the option contract signed prior to the final purchase contract. There is no need to do this before Notary as it is not necessary to register it in the Land Register, but you should be aware that this previous option contract consists on an amount of deposit handed over by the buyer and accepted by the seller on behalf of which the seller compromises to reserve the property until the option contract expires, with the legal penalty of repaying double the amount in the event that he fails to fulfil this option, and the buyer assumes the obligation of purchasing the property within that period of time, risking loosing the deposit should he not go ahead. The price of the option contract will be deducted from the final price, and until then the buyer has time to investigate the property he is about to purchase.

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To summaries, we could say that the legal system in Spain provides us with the necessary legal guarantees and ways of investigating to avoid falling into any possible traps ready for the naive investor who has not acquired adequate advice from his legal advisor.