Buying property in Spain can be problematical if you do not use Spanish lawyers and even then there are sometimes issues especially over the legal size of the property. Many properties are either an 'illegal build' or an ‘over sized build’ and there are substantial fines attached for the new owners in addition to the possibility of having the property, or part of the property, demolished by the authorities.

Problems occur largely because of translation and a case in point is one where Red Tape recently helped a couple who had previously purchased a villa off-plan that they believed to be totally legal until they came to put it back on the market. The property was actually 35% larger than the size that had been authorised and thus there was a serious time delay and fines to pay for making the whole property truly legal and able to be sold on again. Red Tape solved the problem but the Spanish lawyer, who had been appointed by the couple to handle the original transaction, claimed that she had told them the true situation at the time of purchase but that the couple, who speak Spanish, had misunderstood. The builders claimed that they too had verbally informed the couple of the over-build. It was impossible to prove that the lawyer had not done her job properly and it cost the couple many thousands in fines to finally 'legalize' the villa.

There are numerous horror stories regarding purchasing property in Spain but there are a few golden rules to follow:

1. Appoint a truly bi-lingual Spanish law firm
2. Any deposits paid should go into an escrow or bonded client's account and never be paid into an estate agent's current account
3. Beware of signing powers of attorney, ensure that you really trust the professional you are handing this over to
4. Ensure the escritura has the correct measurements of the house on it and that it is not just an escritura for land or for a smaller building than is actually there
5. Estate agents are now required to have the following documents for the property before marketing it: escritura publica (title deeds) and nota simple (short form of deeds available from land registry offices); paid up receipts for IBI (annual property tax); Catastral certificate with the exact boundaries and size of the property; paid up receipts for community fees; paid up receipts for all utility bills
6. Ensure that, as the buyer, you are not paying todos los gastos (all the legal costs); the seller should be paying at least the notary’ fees and the plus valia tax (capital gains tax on the property on the profit the seller has made since his/her purchase)
7. Under-declaration of the true sale price of a property used to be common practice but now there are heavy fines in place for the buyer and seller if you decide to take this risk. Furthermore, when you come to re-sell the property you will pay substantially more plus valia if you under-declared
8. When you come to signing the escritura de compraventa (deeds of sale) at the notary bear in mind that the notary is only responsible for ensuring that the contracts are signed and that monies and taxes are paid. The notary is not responsible for the accuracy of the contracts so you cannot blame the notary for you buying a property that is an illegal or partially illegal build
9. If buying off-plan ensure that all stage payments go into a bonded or escrow account.

There are numerous other points to take into account but your Spanish lawyer should deal with them e.g. if you are buying from a non-resident 5% of the purchase price will be paid over to the hacienda (town hall) as a guarantee against the non-resident's tax obligations.

Red Tape can help you to buy property in Spain with the following services:

• Finding suitable properties in the area you want, including via bank repossessions and public auctions
• Full translation service
• Checking all documentation for you
• Accompanying you to the Notary and translating

Selling property is obviously the reverse process of the above. Red Tape are involved in numerous property sales in the following ways:

• Collecting together all the documents you need from the various authorities (review the list required by the estate agents above in point 5)
• Negotiating realistic rates of commission with estate agents
• Taking photographs and preparing marketing information on your home
• Acting as key holders
• Distributing details to estate agents and then maintaining contact with agents
• Putting se vende (for sale) signs up at your property
• Internet marketing on non-agent sites
• Auction advice
• Liaising with Spanish lawyers for you
• Full translation service
• Showing prospective Spanish buyers around and marketing the property in Spanish press etc
• Ensure that the escritura and the catastral certificate agree prior to you selling your property

Building or Extending Your Own Property:

If you are intending to build or extend your property you will need a licencia de obra (licence for works) or permiso de obra (permission for works). Either will cost you around 4-5% of the estimated construction work dependent on location.

If your property is within urban land it will be much easier to secure permission and gain your license, however if it is in a green zone it may be difficult, even impossible. Rustico land (farmland or forest) is likely to mean that you need at least 10,000 sq m to build if there is a water supply and as much as 30,000 sq m if there is no water supply. Your house can be demolished if you build illegally so it is simply not worth risking anymore. In Andalucia the updated Ley del Suelo (land law) has effectively put a stop to most illegal construction.

Red Tape help with self-build projects, extensions and licences in the following way:

• Getting plans approved via the Colegio de Arquitectos (College of Architects)
• Preparation of the Memoria de Calidades (contract for building specifications)
• Working with the aparejador (architectural engineer)
• Producing a contract for the builder, including the memoria, with fixed payment schedules and penalties for late completion
• Ensuring you have a 10 year building guarantee in place for major structural work
• Updating your escritura with the declaracion de la obra nueva (declaration of new work)
• Registration with the hacienda
• Licencia de primera ocupacion (first occupation licence).

Licences

Red Tape are frequently called in to sort out illegal builds and to obtain the correct licences to make them legal. Mostly it is possible for us to make an illegal building legal but not always. Many owners have been mislead or misguided in the past by hearsay regarding building regulations and ‘what you can get away with’.

Now things have changed and the regulations are strict and adhered to by the authorities, hence the helicopters flying overhead checking for illegal building work. Satellite technology is also used in the new, sophisticated computerized surveillance of illegal builds or extensions. The following court cases, fines, suspended sentences etc are unpleasant and costly to say the least.

The Spanish authorities are not intent on demolishing your illegal build, they are instead focused on collecting the relevant taxes. So when you make the effort to make an illegal building legal they will bend over backwards to help you and generally you will pay a relatively small fine to achieve legality and you can then sell the property on for considerably more money than you would do otherwise. Furthermore, if you are planning on leaving your property to your loved ones you are not leaving them a hornet’s nest of problems, and additional costs, for them to resolve and a long time delay before they can sell.

Let Red Tape tie up a solution today

Contact: Jose Ensenat on 661 341 568 or at jose@redtape.es