Last week we received the following enquiry from someone buying property in Spain:
Question: We have paid a deposit on an ‘old’ property in Almeria. We later found out that the property has no Escritura and our estate agent and Spanish solicitor have both said this is not a problem – that the Escritura can be applied for and will be issued in our names and a Spanish mortgage granted. English banks will not provide a mortgage based on a newly issued Escritura as they say their policy is to wait two years to guarantee ownership and to ensure the property is not claimed back i.e. by a family member or a neighbour. My concern is not necessarily raising the money or getting a mortgage but the possibility of the property being taken away from us after we’ve paid for it, therefore loosing our money and the property.
Answer: Buying a rural house in Spain is a complicated process which can be full of problems if you do not look into all of them. The title deed (escritura) should be signed at the same time as when all the money is paid. The alternative is to pay first a reservation deposit and sign a private purchase/sale contract with the vendors or with the legal representatives (always get your lawyer to check the documentation presented by them to make sure they have legal rights to represent the real owners of the land and property).
Another very important piece of advice. The present owners of the plot of land where the house is must notify the owners of the land adjacent to the boundaries of your plot before selling to you because they actually have preference of purchase over you. By law the vendors should send formal letters to all of them offering them first refusal of the land and property you are going to buy. If within the legal period established, no (affirmative) reply is received, you are free to buy the land without any risk.
If you don’t make sure the above is properly carried out, you could become another innocent victim of what can go terribly wrong when buying rural properties in Spain.
Furthermore, if, as is often the case in Spain, you have agreed at the vendor’s request to pay some of the purchase price in cash (so that the declared price in the deeds differs from the real rice you have paid), and if the owners of the adjacent land have not been notified and given the time established by Spanish law to answer, then they could take advantage of the lower “declared” price as stated on the title deeds, deposit the same amount with the Spanish courts and take over ownership of your property. You will be paid the money deposited with the courts, but you will have lost the cash payment as well as your new property.