In view of the fact that the Costa del Sol is once again the top destination for international buyers, this article sets out the key legal tips to consider before buying a dream property in the region.
- Buyer beware
Property is one of the few areas where consumer laws do not generally apply. Therefore, in the event of any issues arising after the purchase, it is often impossible to sue the estate agent or the seller, or to otherwise undo the transaction. This is particularly relevant on the Costa del Sol, where there have been cases of properties lacking the relevant permits or having other issues in respect of title. As a result, it is essential for international buyers to instruct an independent lawyer to protect their interests prior to paying a deposit or entering into a contract.
- Know your specific challenges and needs as an international buyer
Although it is advisable for all buyers to instruct an independent lawyer before buying a property on the Costa del Sol, a Spanish buyer will generally face less legal risks than an international buyer. For example, he will possess better linguistic skills and familiarity with local practices in order to raise relevant enquiries to the seller, banks and public registries. In addition, the needs of international buyers are more complex than those of Spanish buyers. For instance, the former may want to avoid Spanish inheritance laws or may not intend to become tax domiciled in Spain.
- Choose the right lawyer
Your choice of lawyer should not solely be determined by how much he is charging. Although fees should not be excessive (and should generally be capped in respect of most conveyances), it is a grave error to simply instruct the cheapest lawyer without considering other factors. Any international buyer should make sure that his lawyer possesses the following attributes:
Independence. A lawyer who is appointed or recommended by the estate agent or the developer will not fully represent your interests. This will not only be counterproductive, but will ultimately harm your position, as the lawyer may not reveal serious liabilities that may prompt you to ask for a discount or to walk away from the deal.
Your lawyer should be a real lawyer. Unfortunately, there are numerous unregulated individuals on the Costa del Sol who claim to be “legal professionals”, “conveyancers” or “paralegals”. It is always prudent for international buyers to only instruct real lawyers who are registered with the local bar and covered by all applicable professional insurances.
You should receive clear advice in English. It is not uncommon some local lawyers on the Costa del Sol to hire English-speaking paralegals or secretaries in order to liaise with international clients, as they may not speak English themselves (even if their website and literature claims otherwise). This should be avoided as your lawyer must be able to understand you and explain complex legal issues clearly and directly.
Your lawyer should specialise in advising international nationals. It is simply not enough for a lawyer to speak English. You should instruct a lawyer who is knowledgeable of all the legal and tax issues that will affect you as an international buyer with regards to the purchase and thereafter. In essence, your lawyer should be capable of becoming your long-term advisor.
Your lawyer should be familiar with local practices and procedures. It is not necessary to instruct the lawyer whose office is closest to the property that you intend to purchase. However, your lawyer should have experience and be based on the Costa del Sol to effectively liaise with the relevant registries and parties to the transaction.
- All costs should be made clear from the outset
Before proceeding with a purchase, your lawyer should inform you of the transaction costs due on completion (e.g. notarial fees, legal fees, transaction taxes and disbursements), as well as ongoing costs applicable thereafter (e.g. service charges and taxes such as council tax, rubbish collection fees and non-resident owner´s tax).
- Do not make an offer or pay a deposit without consulting your lawyer
You should never make a firm offer or pay a deposit without first consulting your lawyer. As a general rule, you should also ensure that the funding is in place. However, in the event that a deposit is necessary to take the property off the market, your lawyer should properly advise you of the risks and insist that the transaction is conditional on financing, so you will not be in breach of contract or lose the deposit if your bank refuses or delays financing.
- A site viewing is a must
Although it may be tempting for some international buyers to make an offer on a “discounted” property listed on a website without incurring the time and hassle of flying down to the Costa del Sol, this option is not advisable under any circumstance. Prior to making an offer, a buyer should become aware of the facts and have a face-t-face meeting with his lawyer.
It is not always necessary to instruct a surveyor. However, a site viewing may reveal relevant issues, such as construction defects, incongruences of the title deeds or the presence of occupants at the premises.
- Look at the big picture
Most properties on the Costa del Sol (and in particular those purchased by international buyers) form part of communities or urbanisations with communal gardens, swimming pools, parking, etc. Therefore, prior to purchasing a property in a community, you should ask to inspect the common areas and the status of the community as a whole. Your lawyer should at the minimum confirm that the property in question is not in arrears in respect of the community fees (i.e. the service charge payable by owners). Moreover, a prudent lawyer would also analyse the minutes of the latest meeting of the general assembly of owners, to ensure that there are no major issues affecting the community.
About the Author
Lucas Bornico is a Partner at BF Solicitors (Bornico, Farquharson & Associates), an Anglo-Spanish law firm composed of Spanish lawyers (Abogados) and English Solicitors registered as EU lawyers with the Spanish Bar Association.
BF Solicitors specialise in advising local expats and international clients on the Costa del Sol. Their partner-led practice is able to provide a comprehensive service in respect of property, tax, wills & inheritance, wealth management, cross-border commercial & corporate transactions and yacht sales & registrations.
Disclaimer & Contact Details
This article is intended to provide a general overview on the purchase of a property in Spain and should not be deemed to constitute legal advice. Before relying on this article and entering into a transaction, readers are strongly advised to contact BF Solicitors for a free and confidential consultation.
BF Solicitors – Bornico, Farquharson & Associates
Head Office: Av España, 146 – 3°, 29680, Estepona (Malaga), Spain
www.bfsolicitors.com / Email: email@example.com / Tel: +34 952 000 031 (Spain) / +44 (0)20 7442 5810 (UK)