Other countries, other customs, other jurisdictions. Whoever buys a property, a house, an apartment or a place in Mallorca or Ibiza has to take into account, for example that the notary, much differently than in Germany or England, only takes a small portion of the liability in the process.
In Spain the notary attests to the documentation that both parties bring him. Subsequently, after the signing of the notarial deed, the notary sends a telematic notice to the Land Registry so that the ownership of the new owner may be reserved. Otherwise it is not the notary but the lawyer who should advise on the legal, judicial and tax issues which are incurred by a buyer or seller during the process. In England, is the figure of “Solicitor” (lawyer) who on behalf of the client completes the paperwork and manages the sales transaction, including the transfer of the property between the two contracting parties, until the new owner is registered with the Land Registry.
Why hire a lawyer in the sale of a property in Mallorca or Ibiza?
If we compare the process of purchasing a property in Spain with Germany or England, we realize that the role of professionals involved in it, such as the role of the lawyer or notary, does not translate from one country to the other. It is therefore highly recommended for the success of the operation, to have the legal, judicial and tax services of attorney who specializes in real estate law, who speaks the same language as the client. The client will understand 100% of the information with the advice of a reliable professional, who, throughout the process will ensure that from beginning to end, the purchase is understandable and transparent.
In the sale of a property, “the before counts as much as the after”
In our law firm, we offer a complete service, being pioneers in this field, and we have the Pre Scan Property Service. The Property Pre Scan Report is the development of an initial study of the urban situation of the property, which is valuable information for all parties involved in the purchase process: seller, buyer and real estate agent. The results of the study will determine whether the property meets all the requirements necessary to carry out the purchase without difficulties or obstacles. Furthermore the registrations or information contained in the various public authorities at local, regional and national levels will be reviewed:
- Updated Land Registry simple note.
- Square meters of property registered in the Cadastre.
- Information from the Urban Department of the Island Council.
- Planning and collection information from the corresponding City Hall.
- Debts and tax payments to the tax office.
With data obtained from the “Property Pre Scan” report, you will be able to make an assessment of the urban and legal status of the property and you can see if documentation is missing and under what conditions it can be sold or bought. This will provide a good basis for negotiation of the purchase price for all parties involved.
The sale: contract and deed
Once the price is fixed, the real estate lawyer starts to work. Taking into account the circumstances of each case, and before the purchase, he will act to rectify any irregularities found in the corresponding administrations. In the second step, he will draw up the purchase option contract. This contract is the legal tool that commits both parties and in which at least the following basic elements should be established:
- Sale price.
- Down payment or purchase price option with maturity date. The amount of the option can be deposited in the escrow account of the notary, lawyer, real estate agent or the seller.
- The official documentation that will be compiled until the date of signing the contract option on the property and the documentation that must be provided the day of the signing of the deed of sale before the Notary.
- Penalties for both sides are set for breach of contract.
At this point, the notarial deed of sale will be prepared by all parties and by the notary, and the documents listed shall be provided in the option contract to the Notary. The lawyer will present a budget of taxes and expenses associated with the purchase for both seller and buyer. These costs should include at least:
- Transfer tax.
- Change in equity tax.
- Professional fees.
In short, the buyer will incur costs during a sale in which may vary between 12% and 14% of the purchase price.
Registration, tax payments and changes in ownership
Following the signing at the notary tax payments must be carried out within a set time period. As an example; if the transfer tax is not paid, the new owner can not be registered in the land registry. Change of ownership in the land and supply services in the property, such as electricity, gas, water, telephone and Internet, should also be completed. As mentioned at the beginning, our firm of lawyers and tax consultants offers a comprehensive legal, judicial and tax service to residents and non-residents in the process of purchasing property and we understand all the essential aspects from before, during and after the sale.