What should not be missing in your purchase process of a Sotogrande home?
Information sourced from Lawyer and legal expert Raymundo Larraín Nesbitt’s website and amended where applicable for Sotogrande. You can read the original article here: www.larrainnesbittabogados.com.
For most people buying a property is something you do on very few occasions during a lifetime. Rarer still would be buying a property in a foreign country.
Understanding the process of the country you are buying in is therefore very important, and engaging a reputable lawyer to provide advice, is something I would strongly recommend to any would be applicant.
The purchase process of your Sotogrande home follows four principal steps:
- Secure the property by signing a private contract. This stops you being gazumped whilst undertaking the due diligence on the property.
- Undertake due diligence.
- Close at the Notary.
- Ensure the property is registered in your name.
I do not believe I have ever come across a buyer who said they fully understood the process, and not learnt something new from a legal advisor.
The due diligence exercises your solicitors will undertake will require he or she requests, reads, checks, verifies and questions, as a minimum, the points highlighted below.
- Sight a copy of the properties Title Deed (escritura in Spanish). This will specify that the vendor is who he says he is and that the property being sold is correctly described.
- Sight a copy of a Licence of First Occupation, where possible. (the first occupancy licence which basically states that the property has been signed off by the authorities as fit for purpose)
- Ensure the person/s you are dealing with as sellers are the ones registered as the property owners. If not, to ensure they are acting through a valid Power of Attorney.
- Get an updated Nota Simple. This document is an updated status of the property highlighting any refurbishments that have been registered and any debts, embargoes or encumbrances the property may have.
- Ensure the property is classified legally as a dwelling and not as commercial property.
- Ensure the property is freehold, or leasehold if it were the case.
- Verify the property is not in arrears with its Community of Owners, if applicable (EUC in Sotogrande). A buyer could become liable for previous years arrears.
- Verify there are no outstanding local rates to be paid: IBI and rubbish collections charges (basura, in Spanish).
- Verify there are no tenants living in the property. The buyer must respect the duration of the whole rental contract, unless a tenant formally agrees to leave ahead in exchange.
- Check that the property is unencumbered (no mortgage against it).
- Ensure the property is free of liens i.e. rights of way, rights of view, hunting rights, gathering rights, well rights…
- Make sure the property is free of charges i.e. no registered embargoes against it.
- If investing in a Buy-to-Rent, verify your Community of Owners has not banned or restricted holiday rentals.
- If investing in a Buy-to-Rent, ensure you are compliant with holiday homes regional regulations and attain a Tourist licence to rent where necessary.
- Post-completion: ensure your property is now registered under your name at the Land Registry and never take anyone’s word for it! Verify it yourself, request a nota simple.
- Post-completion: arrange payment of local rates (IBI & basura) as a direct debit against your Spanish bank account.
- Post-completion: if you are non-resident, ensure you pay every year your Non-Resident Imputed Income Tax (NRIIT) on your Spanish property.
The above list highlights the most important points, but is by no means exhaustive, as for example there could be specifics on the property due to its classification (urban vs rural).
Generally speaking, the process is straight forward. However, my experience tells me that without exception there are always small hiccups which in most cases can be overcome.
I am always available to discuss specifics and can recommend a number of different reputable law firms who can provide advice in your own language if you prefer.
Charles Gubbins.
✉ charles.gubbins@noll-sotogrande.com
? +34 607 911 661
