Tuesday, October 20, 2015

Purchasing: Real Estate in Spain (III). Contract

Our lawyers at Evolutiza Lawyers & Tax Advisors are going to explain main subjects regarding the agreement and private contract when going forward to purchase Real Estate in Spain. You know, we are experts on contracts and trail-blazers on Spanish Real Estate market.

We are moving forward, and maybe you prefer to be advised by one of our lawyers while looking for and choosing a property, but anyway, once you have selected a property, it is advisable to pay a deposit and sign a reservation document, here it is the contract in order to ensure your rights to purchase the property.

The deposit, or down-payment, is usually a small amount or a percentage of the negotiated price.  It is important to stress that, should the purchasers decide not to proceed with the purchase, they will not get the deposit back, except where there is express agreement otherwise, such as where the purchaser does not obtain the necessary financing or where problems arise of a legal or urban development nature that advise against the purchase. We can advise you and manage this kind of negotiations. It is more than advisable that all documents will be checked by our lawyers before signing.
The specific conditions and terms of the agreement will be defined in the private purchase-sale contract, besides some fundamental aspects, such as deadlines, price, expenses, etc. and they must be respected thereafter.
The sellers or their representative must provide the purchaser with the property’s documentation, so that the operation’s feasibility from a legal, urban development and tax point of view can be studied. Relevant due diligence must be issued by our lawyers in order to ensure the legal safety of the purchaser. This is one of our main fields.
Another crucial point is to draw up the purchase/sale contract or the purchase option contract. This is the point at which we negotiate with the selling party to agree on the most favourable conditions for our client’s interests. We will then send you a full report with details on the operation’s feasibility, the terms of the contract, the approximate costs of maintenance and the expenses derived from the purchase, along with a translation of the draft of the contract. The contract can be also signed in English or in double column Spanish-English, in order to avoid misunderstandings.
Singing a purchase contract in Spain is not a small deal. The contract will include the details of the agreements reached between the parties and the conditions of the purchase/sale, even though some may be overlooked as they are merely an obligation in line with current Spanish law.
Once the contract has been signed, both parties are under obligation to respect the contract in the agreed terms and conditions.
In the case of purchasing a home that is under construction, other intermediate payments are usually made between signing the contract and signing the deed, which generally coincide with certain phases of the building work. Our firm will take charge of managing those payments on your behalf and will request the relevant guarantees from the developer. It is worth remembering that, in Spain, property developers and builders that receive down-payments for homes under construction are obliged by law to guarantee the amounts received up until the work has been completed, by means of a bank guarantee or insurance policy. In this way, in the event that the building works are not completed, the purchasers will recover all the money they have invested, plus the statutory interest.
Our lawyers are specialist in guiding during the purchase, drfting and negotiating contracts, terms and conditions. Our advice covers the tax obligations too.