Once you’ve paid a reservation deposit for a property, you need to do thorough research into all the legalities before paying any more money.
Once you have reserved an off-plan property, you don’t get to sit back and relax for months while you wait for your lovely new home to be built. You probably paid between €3,000 and €6,000 to take the property off of the market, and you are probably supposed to make the next payment within 30 days. Now is the time to carry out some basic searches to ensure that the plot, the development and the developer are all in order.
If you do not speak Spanish and are not familiar with Spanish laws, you will defi nitely need an independent Spanish lawyer (abogado). You can find a Spanish abogado in both Spain and in the United Kingdom. When you’re looking for an abogado, always make sure that he or she is is registered with the Spanish College of Lawyers.
Simple procedure
Once instructed, your lawyer will probably request a Land Registry search against the plot of land where your future property is going to be built. The Land Registry search, commonly known as the nota simple, can be obtained at the local Land Registry office and provides the most relevant information about the plot where the property you are buying is going to be constructed. The search will tell you important facts such as who is the current owner of the land. The nota simple will also indicate whether the land has been designated for residential or agricultural use. It will also show any charges and rights of way that may affect the land.
You should bear in mind that the situation described in the nota simple may vary with over time. For example, some projects start on agricultural land while the developer is in the process of changing the qualification of the land and complying with the local laws of residential planning. In other cases, the land has been requalifi ed as residential but this is not yet shown on the Land Registry search as the change will be made a few weeks before completion. That is why the work of the lawyer does not end with the Land Registry search. It’s also why it’s essential that you have a good independent lawyer who is looking after your interests alone, with no links to the developer or estate agent, who can look into all the permissions for you and give you unbiassed advice.
The lawyer also needs to request things from the developer, most importantly evidence of planning permission and evidence that a line of bank guarantees has been provided for the project. In Spain the provision of bank guarantees, for the purchase of off-plan properties, is compulsory by law. Take advantage of it. Ask your lawyer whether there is any line of bank guarantees available. The promise of the agent or the developer that a bank guarantee will be provided is not enough. This has to be confi rmed by the bank. Do not be afraid of asking too many questions in this regard. At the end of the day, the bank guarantee will be the best protection you can have should something go wrong with the project as it will enable you to get your money back.
While you have paid your reservation deposit, and probably won’t get it back if you decide not to proceed with the purchase, it’s better to pull out now if your lawyer identifies any serious problems, rather than to hand over tens of thousands of pounds and wait months for a property that you may not be able to use or may even never get completed. Because of that, the searches your lawyer does are all essential.