More and more people are buying a home in Spain, whether as a retirement home, holiday home or investment. With prices falling daily as people panic over the credit crunch and the weakness of sterling against the euro, now is a good time to buy, but hey, - be careful out there!
Here’s my personal top 10 of things to watch out for to ensure your property buying experience goes to plan.
1. Anyone can set up as an estate agent in Spain, as there is little or no regulation. Choose a long-established agent who has a reputation to uphold. Every day, inexperienced and unscrupulous agents are closing for business. You don’t want anyone to disappear with your dreams and your cash, do you? Ensure your agent is fluent in Spanish, so there are no nasty surprises in store.
2. Choose an independent lawyer. (Abogado)
Your agent may make recommendations, but an independent lawyer will make serving your interests his only concern.
Your lawyer should also ensure that you receive translations of all documents connected with the purchase. DON’T CONSIDER COMPLETING THE PURCHASE WITHOUT A LAWYER.
3. Unless you’ve set your heart on a shiny new build, don’t buy off plan at the moment. Several builders have gone out of business, and even the well established ones have curtailed their building until things improve. You could be waiting years for your home in the sun.
4. If you do buy off plan, ensure your builder is well established. NEVER BUY FROM A BUILDER WHOSE HEAD OFFICE IS A PORTAKABIN. It’s likely he hasn’t bothered to obtain all the necessary building permissions, and by the time you find out, he’ll be miles away with your hard-earned cash. Do your detective work and visit other sites operated by your chosen builder to verify the quality of build. You may get a 10 year builder’s guarantee on completion, but that’s not much use if he goes out of business, is it?
5. You might fancy a home on the beach, but be aware of the 1988 Ley de Costas (Law of the Coast). Spain wants to halt the overdevelopment of its coast, and many home owners face the prospect of having to seek permission to remain in a home they purchased in good faith years before the law came into effect. Coastal land is public land, and many builders went ahead without the necessary permissions. Even if permission was granted, local authorities may decide they want you out. You can take your case to the European Court, but you may not win, and who wants that hassle anyway? Also, with rising sea levels due to global warming, who’s to say your beach house won’t be an underwater hotel for the fishes in 50 years time?
6. Be aware of the infamous Valencia Land Grab Law (LRAU) of 1994. Introduced to prevent rural landowners standing in the way of necessary expansion, the law in Valencia was badly drafted and has been used to compel householders to either surrender part of their land or contribute towards local infrastructure. Your lawyer should ensure your planned property is not affected by the LRAU, but one method of avoiding problems is to buy in an urbanised area, either in a town or village or on a purpose built urbanisation. The LRAU only comes into effect when there is a need or wish to reclassify rural or coastal land as urban for development, usually due to lack of other available land. Homes built on land originally classified as urban are unaffected.
7. Insist on a surveyor’s report. On the Costa Blanca, the typical attitude seems to be ‘We don’t bother with surveys, it’s a waste of money and you have enough to pay in property taxes.’ However, you wouldn’t buy a home in England without a survey, so don’t do it in Spain. If your load bearing walls are not strong enough, or your swimming pool starts sliding down the mountain, you could be landed with a huge bill. The EUR 400 spent on your survey is money well spent.
8. Don’t pay a deposit unless you are certain this is the home for you. In Spain, once you hand over a deposit, you are committed to the purchase. If you withdraw later, you’ll lose your money, which is typically 10 percent of the asking price. There are plenty of properties on the market, so don’t part with any cash until you’re certain you’ve found the right one for you.
9. In Spain, debts are attached to the property, not the person, so ensure that your lawyer obtains proof that the vendor has paid all his obligations, including community fees if the property is on an urbanisation, and all utilities and taxes. Also ensure that the property is free of mortgages. It may be boring, but ask to see all the receipts.
10. You need a Spanish bank account, as the utility companies will only connect you to the services if they can set up a direct debit with a Spanish bank for payment. Ensure your chosen bank has at least one English speaking member of staff. Some banks may also produce statements in English on request.
The writer, Sandra Piddock, is originally from the UK. She moved from Cornwall to Costa Blanca in March, but says it feels like home already. She maintains a website in her spare time.
Expatica November 2008
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House-hunting in Spain can be complex. Sandra Piddock points out 10 traps you could possibly fall into.
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