Legal- property documents in Barcelona-Spain

PROPERTIES SALES CONTRACTS

The legal advisor makes, at our request, the following notes.

'It is quite important, as in any other European country, to have or obtain adequate, property documents. It is not recommended to just buy a house, property, home, land, real estate in Spain, Barcelona, Costa Brava, or in any other country in Europe, without checking legal matters properly.'

Legal matters-documents
The "Arras"

A deposit is paid when an “arras” contract is signed. It is quite standard, to agree in this contract, that a deposit of 10 percent is paid straight away, to ensure/secure the (sold) property at the agreed price. With a signed "arras contract", a party may refuse to go on with the deal. However, the buyer will lose his deposit and the seller will have to repay double the amount of the deposit. All relevant sales details are included already in this contract. Also, a date and a place with the notary will have been included.

Alternatively, a so called Sale & Purchase Contract (Contrato de Compraventa) could be agreed upon and signed. This is mostly applied with newly built property. Such (pre) contract, signed between seller and buyer, is binding on both parties.

If a signed contrato is not followed up, through the notary's office, then the only recourse, if either party fails to complete (the deal), is to sue the other party.

The latter is not so attractive, we assume, and therefore, an Arras is the most effective agreement to be signed, according to our opinion.

When are contracts/agreements to be signed.

Do not sign contracts without it being checked first by a lawyer and the real estate agency. One is committing themselve to the transaction.

The contract is valid if it is signed by both vendor and buyer. The Barcelona Houses estate agent, can sign on behalf of seller or buyer, but only if they have a notarised power of attorney (a so-called poder). The real estate agent will however ensure that proper clauses, including those for advance, Arras, for his commission-payments, will have been correcty and properly introduced into the text of contracts.

Before signing a contract, the following is to be verified (double-checked)

Proof of Ownership

Be certain that the seller actually is the owner of the claimed land or property The proof is a certificate (certificación) from the Property Register (Registro de la Propiedad) in Barcelona or another city in the province. Barcelona-Houses agency may acquire such document, for the buyer.

It is relevant to check that the ownership recorded in the Registro is correct. The buyers and sellers should be properly identified.

About charges

Charges are: debts, charges, court orders which are registered here in Spain generally against the property rather than against a person. The charges include for example censos; usufructos, limitaciones; hipotecas; multas, embargos and others.

Also, you may risk that some unpaid taxes have not yet been recorded at the Registro. Therfore the lawyer is to check with the Hacienda (Ministry of Finance); the Ayuntamiento (Community), and others, such as for example the Recaudación Provincial to ensure that these have been fully paid.

The notary

The notary must ensure to have a up to date/new "nota simple" on the day that the new sale documents will be signed. That is to say, when the contract is formally effected. He will ensure, but have it also checked by your lawyer, that the ownership and charges have not at al-l or not significantly changed since the previous investigation.

Authorised copy of the Escritura Publica

This copy is requested from the Register. In the meantime, an older, authorised copy of the Escritura Publica, has been shown to the buyer, when they bought the property. The escritura is the title, deed, of the property, which provides a number of exact details of the owner, a description of the property (but not the definitive description) which is done by the Catastro.

If there is no stamp, than the new buyer has a Tax issue, which is to solved

In addition, if the present owner chose to register the property, the official Registry stamp will show this.

Check, when were taxes paid by the seller

Just before registering it was necessary to pay the transaction taxes which are stated on the last page of the escritura (x%) transfer tax (Impuesto sobre Transmisiones Patrimoniales), or (x%) VAT (IVA) and (x%) stamp duty (Impuesto sobre Actos Juridicos)).

Unfortunately, in some cases some people choose not to register and not pay taxes.

Register the new property, as soon as possible, if not urgently

Registering, by the new owner, requires payment of transaction tax. Indeed. However, not registering increases the risk that other charges can be registered which rank ahead of new ownership. Therefore it is suggested here that the notary is to be requested to register immediately, i.e. by e-mail; by fax and to obtain confirmation of this.

Registration and payment of taxes has to be done in Catalunya, the Comunidad Autónoma where the property is located. Taxes have to be paid at the Oficina Liquidadora de Impuestos, AGÈNCIA TRIBUTÀRIA DE CATALUNYA - OFICINA LIQUIDADORA *REGISTRE MERCANTIL DE BARCELONA and the receipts sent with the escritura to the Registro. A lawyer, specialised in these matters, is certainly of good help, we note.

If the Notary has a “gestor” (representative) he will be likely in a position to arrange this for you, at your request. Also the bank, if involved, may be of help, to you. In case you acquire a mortgage, they will likely but not necessarely arrange the payment of taxes and registration on your behalf.

Local property tax

Have the lawyer check that payment has been done perfecly till now.

In case the impuesto sobre Bienes Inmuebles (IBI), is unpaid, is will be next connected to the fincas/property. Then, a new owner, will become liable. Make sure to ask to see the receipt for the last year, the time for which liability for non-paid tax can be passed-on to the buyer

The IBI receipt

This is a receipt, that will show the Referencia Catastral and also the valor catastral . All property transactions must quote the Referencia Catastral.

Registro de la Propiedad is concerned with ownership, the Catastro is concerned with the property.

New property

In case you bought new property, it will be your responsibility that the property is properly registered.

Certificación Catastral

This contains the legally valid description of the property. It provides a register of assessed values for tax reasons. It comprises a description of the location and properties/characteristics; a plan.

In case you buy into an urbanisation, there are specific issues, which require detailed investigation and checking.

The subject is to however too detailed, to be noted summarely, on this web-page.

Ley de Costas

If the building does not have the necessary approval and licences, a buyer may most likely have problems when registering it.

The local authorities could, in a bad case scenario, also have the property demolished.

Therefore, seek confirmation that the property was built in conformity with the Ley de Costas. This authorised the authorities to restrict building within 100 metres of the beach and to establishes a zona de influencia up into the inland. It is important that a lawyer ensures that any new properties built since 1988, comply with this law.

If the property was built since late eighty's on or near the coast, or lately elsewhere, it is also sensible to see proof that a building licence was obtained and that a certificate (certificado de fin de obra) and a licence (licencia de primer occupación) have been issued. These documents are normally obtained through the local Ajuntamento.

The owner is an offshore company

Offshore Ownership Tax is required here.

See to the payment(s)of the annual tax, when the vendor owns the property through an offshore company

The above information indicates with a fair, general initial description, of how real estate business may be done in general and under local real estate terms and conditions. For a precise advice with regard to any legal issue, a lawyer is to be consulted in Barcelona, Spain.

Our legal counsel may also provide requested advice, with regard to any request made to us, in the field of real estate, in Barcelona, Spain.