Below are the questions most frequently asked about legal matters by our clients when buying off-plan property.

What happens if the developer disappears or goes bankrupt before completion?
This is now extremely rare, and the government have actually tightened up the process in this area quite considerably. Spanish law now requires developers to provide bank guarantees to protect the investor’s money from day one, whilst mortgages (of between 60% and 70%) are available, subject to status, on every off-plan unit, enabling the purchaser to complete if he/she chooses to do so.

When signing private purchase contracts, the developer must now produce evidence that he has in place a bank guarantee or an insurance policy. Following this, if the developer runs into difficulties, such as bankruptcy, the purchaser´s lawyer will arrange for the return of all monies paid to date, plus interest at 6%.

Can I negotiate on the purchase price and conditions?
Yes, once you have chosen a suitable development, the purchase price, terms and conditions may be negotiated with the developer. Your offer may be subject to a mortgage, or you may require a delayed completion. This must be stated at the time of the offer. We can recommend a lawyer who can help you with this process.

Do I pay a deposit to the developer?
Yes, a small deposit (usually €3.000 to €6.000) is required by a developer to reserve the property. A reservation document is drawn up which means that the property is taken off the market, and the purchase price is fixed.

How do I choose a lawyer to represent me?
We can recommend a number of different lawyers who can represent you in your purchase. They will speak in your native language, can be reached by phone, fax and email, and are happy to ensure that your purchase is as trouble-free as possible. A lawyer will provide legal guarantees that the purchase of your property is free from any debts or charges, and that all fees - including electricity, water and community fees - are paid up to the day of completion.

When are the contracts exchanged?
Upon acceptance of the offer by the developer and payment of the reservation deposit, the next step is to exchange private contracts. This normally takes place within about 14 days. Your legal representative would have made steps to make sure the property is free of debt or problems as above, and the private contract will set out the agreed selling price and the date of completion at the notary. It is normal practice at this stage to pay 10% of the purchase price.

What is a notary?
A notary formalizes the sale of a property; they check that the title deeds and purchase are in order before the final payment is made, and the purchase document signed. The notary will then fax a copy of the purchase document to the local land registry office, and the final registration of the documentation normally takes around 2 months.

What if I change my mind?
You are committed by the signing of the private purchase contract, and if you choose not to complete the transaction you will lose your 10%. If you have not reached this stage of the purchase all you will lose is your deposit.

What are community fees?
Community fees generally apply to properties that share benefits e.g. community swimming pool(s), general maintenance, gardening and security. These fees are set by a president and committee who are voted in at an AGM (Annual General Meeting) every year. Community fees are payable usually by direct debit on a quarterly basis.

Is it easy to open a bank account in Spain?
This can be arranged by you or your lawyer, and is very straight forward. Normally all that is required is a passport and a small deposit to the account.

Will my property be freehold?
Yes, all properties that we deal with are freehold properties.

Who pays your commission?
The developer pays our commission; you the buyer pay no fees or commission.

Are there any additional fees to pay like stamp duty in the UK?
Yes there are; as a rule you should allow an additional 10% on top of the purchase price, to cover fees including lawyers, the notary, property registration and transfer tax.

If you have any questions not listed below, please feel free to contact us by email legals@liveestate.com