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You have found your dream home, what now? We are regularly asked whether hiring a lawyer is really necessary. The notary checks everything, right? You might think: ‘if that is the case, then we don’t need a lawyer to save costs, do we?’ Let’s help you out of your dream right away, because a lawyer is indispensable in Spain when buying a house. We are happy to tell you why!
Notary versus lawyer
Where the role of a notary in the Netherlands and Belgium is the most important key figure in the purchase of a house, this is slightly different here in Spain. Of course, the notary is important in the smooth running of the transfer process and in checking the final notarial deed of sale (the ‘escritura’), but the lawyer is the one who has actually done all the legal work and you are in the legal part. of the purchasing process. With this information we want to provide you with some insight into the role of a lawyer, what exactly they do, when you call for help and of course the costs.
A practical example
You have visited and found your dream home under the Spanish sun. Congratulations! But now. Since the house is probably not for sale exclusively with one real estate agent, it is important to get the house off the market as quickly as possible. Of course you don’t want the house to be hijacked right in front of you.
Where in the Netherlands or Belgium you can expect that all checks have already been done in advance before a home comes on the market, here this will often have to be done to a large extent due to the principle of non-exclusivity. This means that it is very important before a preliminary purchase contract is drawn up and 10% of the purchase price is paid, that you are sure that everything is correct.
The reservation contract, the contrato de reserva, was devised for this purpose.
With the reservation contract you can still record an option to purchase, but under the conditions of a good legal check. With this contract and a reservation deposit of usually between 3000 and 6000 euros, you buy time. Once the contract is signed and the reservation deposit is received, the property will go off the market. It may no longer be offered and viewed by others. The money remains secured with the broker and you will get it back if the legal checks ultimately show that this is not a good house to buy. Otherwise it is already a down payment on the 10% of the purchase price.
When does the lawyer come into the picture
This is in any case the moment when we will advise you to engage a lawyer. The validity of a reservation contract is not unlimited. Under normal circumstances, it is assumed that all checks can take place within 10 to a maximum of 14 days. So within two weeks this should lead to a preliminary purchase contract.
As soon as you have given the order to your lawyer, he will request all relevant documents from the selling party as soon as possible. After making the reservation, it is important in Spain that a lawyer will check various matters for you before the provisional purchase contract (contrato de arras) and the 10% deposit is transferred. After all, you don’t want to buy a home that turns out to be wrong afterwards. If your lawyer discovers a reason why it is better not to buy, you will be protected from a major mistake and you will simply get the reservation amount back.
So we always say that the costs for a lawyer in Spain always more than pay off.
What does a lawyer actually do?
You may assume that most lawyers do the same checks anyway, but it is worth asking what exactly is included in their purchase guidance package.
The duties of a good lawyer in Spain include the following:
- Checking the item to be purchased. This research is mainly based on three pillars: the ownership situation, the debt position and the legality of the property to be purchased. In Spain there is often talk of illegal construction and of course we want to prevent this! There is nothing more annoying than buying an unsaleable home afterwards that you can’t get rid of if you ever want to sell. It is therefore always checked whether there are debts on the home or whether, for example, a mortgage still has to be paid off. And not unimportant: whether the person who wants to sell the house is also legally allowed to do so.
- Drafting and checking the contracts (for example, the preliminary purchase contract and the final purchase contract).
- Contact point for the selling party (lawyer/broker). That way you don’t have to be in contact with the sellers yourself.
- Payment management assistance. How can you best allow the payment to take place and receive advice on applicable AML (anti-money laundering) legislation.
- The supervision and control of the transfer, i.e. the signing of the notarial deed at the notary.
- The registration of the deed of sale of the house at the Spanish register.
- Completing the necessary documents and taking care of the payment of the various taxes that are directly related to the purchase of real estate in Spain.
A lawyer not only checks, but also knows how to solve any legal challenges. It regularly happens that there are discrepancies in m2 between the land registry and the register. Also, not all outbuildings or swimming pools are always described. The lawyer can often check whether this can still happen and ensure that this is legally rectified before or during the transfer.
Your lawyer can also request the zoning plan for a home on request. In this way, it can also be examined whether the house could possibly qualify for a rental license. If you want to rent out, the lawyer is the one who will ultimately give you a definitive answer about the possibilities in the specific municipality. A rental license can never be guaranteed for research into the rental options of a lawyer.
Furthermore, your lawyer can convert the contracts with the utility companies (gas, water and light) for you after the transfer. These will then be debited from your account via an automatic payment. So you don’t have to arrange anything yourself.
Do I have to be present?
A lawyer can do much of the work remotely and online. For a number of things you will have to be present yourself, such as the transfer at the notary. If that is somehow not possible, you can also give a lawyer a power of attorney via a notarial authorization. The lawyer will then be able to sign cases for you if you cannot be present in Spain yourself.
For example, if you have a custom built dream home in Spain, you will often have to be in Spain to sign various documents. Think of building permits or securing the payments made by means of receiving a bank guarantee. Your lawyer can do this for you via the power of attorney and you do not have to come to Spain for every signature.
In addition to the standard tasks and giving independent advice, your lawyer in Spain can also arrange a number of other matters for you. With a power of attorney (issued at the notary), your lawyer can arrange matters for you or sign for you if you cannot be present in Spain yourself. For example, a lawyer can also request a NIE number for you with a power of attorney, if you have not yet done this yourself during the preparation process. In Spain you need the NIE number (the tax number for foreigners) when buying a property.
In that case, keep in mind that the NIE number is a lot more expensive than if you do this yourself, via the normal route. Where a NIE number normally costs about 10 euros, this amount quickly comes to about 300 euros per number via a lawyer. But of course it is nice that your lawyer can arrange this for you in Spain if you have found your dream home before and are short on time.
Of course we always advise you to be present as much as possible, after all, you remain the person who is going to buy a property in Spain!
How do I find a good lawyer
There are of course a number of good lawyers to be found in Spain. Especially lawyers specialized in real estate and purchase guidance for homes. Many potential buyers do not yet or not sufficiently master the Spanish language, so a Dutch or at least English speaking lawyer is important. Since you hire the lawyer yourself, it is important that no miscommunication can take place.
It is important to always have contact with the lawyer yourself to feel whether you have the ‘click’ and for the trust.
After finding your dream home, we can always put you in touch with a good Dutch or English speaking lawyer based in Spain. It is important that it is independent of the selling party and that it has good local knowledge. Certainly with specific objects, for example if you buy a ‘rustico’ home (finca in the countryside), a B&B (casa rural) or, for example, an apartment in Valencia. Then it is important that the lawyer knows and has the local knowledge and inputs to act quickly and retrieve the correct information.
We are also regularly asked whether, in order to avoid extra costs, it is possible that the lawyer who represents your business in the Netherlands can also do this in Spain or that you can also do this yourself if you have a legal background. This is certainly not recommended. Spain is a large country and the rules sometimes differ per municipality. We always recommend that you hire a lawyer based in Spain. Sometimes it is even the case that a lawyer from, for example, the Almeria region is not aware of the rules and guidelines in, for example, the Valencia region.
Costs
But what additional costs for a lawyer should you think about exactly? A lawyer in Spain often charges a basic rate of 1% (of the purchase price) + 21% IVA (Spanish for VAT) for the purchase guidance. The costs differ per lawyer, but are in any case usually between 1 – 2 percent of the purchase price excluding VAT. Outside of a %, they usually also apply a minimum rate. Think of 2000 to 3000 euros excluding VAT.
Also keep this in mind when calculating the buyer’s costs. In Spain it is often said about 12-13%, but outside of the regional differences that exist, some costs are a bit heavier with cheap housing. For example, for a house of 100,000 euros, the buyer’s costs weigh more heavily in percentage than for houses located in a budget above that. The lawyer’s fees are then 2.5% instead of 1.5% (including VAT).
Via the following link you can read more information about the purchase process and the other buyer costs that you can expect in addition to the lawyer during the purchase process in Spain. In any case, always inquire in advance which costs the lawyer will charge. That way you won’t be faced with any surprises. It is of course possible that the costs are higher if you ask your lawyer to assist you in more complicated cases in addition to the standard tasks.
Buy without worries
Don’t be put off by this long story. Or through stories that you have undoubtedly heard about someone who has bought a house in Spain with all kinds of problems. By being guided by a good lawyer, you can make purchases without any worries. You don’t have to know everything yourself, but you do have the experts for it. To save you from the pitfalls.
We are of course happy to help you find a good lawyer in Spain, well-known in the region and who can assist you in your own language or in any case in English if necessary. If you are not known in Spain, it is often difficult to determine what a good party is. Over the years we have assisted many people with the purchase and have built up a good network. We are happy to connect you to the lawyer that best suits you and your situation.
In any case, we keep saying: you never buy a house under the Spanish sun without a lawyer.
See you soon in Spain?!
