How to Avoid Potential Problems at the Initial Stages of your Purchase of a Spanish Property

Deposit to Reserve the Property

When a buyer finally finds their dream property either through an estate agent or directly from the vendor or developer he or she usually comes under immediate pressure from the vendor or his agent to do one of two things or both.

1. To sign a reservation/ deposit contract.
   
2. Transfer to the vendor, developer or his agent deposit money.

It is at this stage that buyers very often make a fundamental mistake, which can cause them problems and stress later. Do not give in to the sales pressure techniques of the agents. Remember they are trained to use every trick in the book to get you to sign or hand over deposit money.

Do not immediately hand over Deposit Money

Firstly, never give any reservation deposit funds without having a signed reservation deposit contract relating to the money transfer. This contract is needed to protect your rights in relation to the deposit money. No matter how trust worthy or respectable the developer or agent may be you still need to have a contract checked by a lawyer prior to providing a deposit. This is to protect you and guarantee the return of your deposit money should your lawyer discover something untoward with the property, or the vendor does not sell you the property. The reservation contract will give you legal rights, which you can use to enforce your demand for the return of your money. A common "headache" for buyers is fighting for the return of the deposit money when they are not sold the property or they do not proceed due to a problem with the property.

Arrange for an Independent Spanish Lawyer to check the Contract

Secondly, you will need to have this reservation contract checked by a lawyer prior to giving a deposit. This is because often these contracts do not contain clear clauses providing for the return of the buyer's deposit money in the circumstances I have explained earlier. Most buyers will employ a lawyer on their purchase, so why not use your lawyer at this stage and get them to check the reservation contract and draft changes if the contract does not adequately protect you and your money.

Do not use the lawyer of the developer or the vendor, nor the lawyer recommended by the estate agent, as these lawyers cannot be independent due to the clear conflict of interest. These lawyers are getting their clients from the vendor or his agent, and so they will reluctant to find a problem with the vendor's contracts or property. If they find fault they will upset the vendor or agent who is supplying them with clients and so "bite the hand that feeds them so to speak".

So while you are looking for your Spanish property it is also a good idea to start looking for a Spanish Law firm in the area of Spain in which you are going to buy. Check out the law firm for its suitability to act on your behalf. Firstly ensure that the lawyer in your firm is actually a qualified Spanish Lawyer (Abogado). You can check this by asking to see his law society identification card and checking with his local law society. You may think why should I do this type of check, but there are actually people working as lawyers who are not actually lawyers, or who are not registered with their law society and so are not licensed to practice. Non lawyers or unregistered lawyers are not protected by professional liability insurance, and so should they advise you wrongly and you suffer a loss there will be no guaranteed fund for your compensation. Also on a practical level you need to check the Spanish Lawyer's level of verbal and written English to ensure that everything will be explained clearly to you.

With your lawyer who you have found independently you will be in a much stronger position. When the agent or buyer asks you for a deposit or asks you to sign a reservation contract you can tell them to fax or email the reservation contract to your lawyer, as you will already have his contact details. Once your lawyer has checked it and advised you to sign, then and only then sign the contract. Reservation contracts not only need to be checked to ensure that you have rights to the return of your money in certain conditions but also because some reservation contracts contain terms that bind you to clauses in the purchase contract which may be detrimental to the buyer's interests.

Why is it an Advantage to use a Spanish Law Firm in the Area you are Buying

Again this may seem obvious but it is amazing how many people use lawyers not within travelling distance to their property. Often it is necessary for your lawyer to visit the local planning department of the property you are buying to check the planning status in detail. If the distance is far then you will be paying travelling costs of your lawyer, or your lawyer may not be able to visit if he is not in Spain. Also on completion your lawyer has to travel to the Notary office in the area of the property. If your lawyer does not travel but employs another lawyer on his behalf then either your costs will be higher, or possibly the quality of service lower should your lawyer not be present at the Notary office on completion.

Once you have purchased your property it is also on a practical level convenient to have a local lawyer who you can trust. This is especially important in a foreign country where you are more likely to need on going advice and support. If you have had good service with your property conveyancing then hopefully the same lawyer will provide you with good service and support on other matters.

Essential to keep all Correspondence

One final "gem" of advice always put your instructions in writing to your lawyer and ask him to confirm his reply in writing. Keep copies of all correspondence. It may seem inconvenient and extra work to do this but it is essential. If you are not happy with your lawyer's service or feel he has not followed your instructions you will have documentary evidence to support your position. It is very common for unscrupulous professionals to conveniently forget that conversations have happened. If you have paid for the services of a lawyer and he has been negligent you are going to need evidence of this to get compensated. Its better to be cautious and avoid potential problems from happening in the first place as opposed to having the stress and costs of employing another lawyer to put things right!

For specific or general legal or tax advice on your Spanish property purchase contact Puerta Vides´s Lawyers and Accountants by email or phone: