Purchase Process

Nota Simple
The first stage in buying a property in Spain is to establish the registered title deed of the property you are buying. The Nota Simple, is an extract of the registered title deed of the property and is obtained from the local office of the Land Registry. In most cases it is the Nota Simple that confirms the ownership, size and location of the property, and on this basis you can continue with your purchase to the next stage and look to sign the private sales contract (contrato privado de compraventa) once the vendor and/or vendors have agreed to the conditions of the sale.

However if the Nota Simple is not available for a second-hand property then it’s title deed is not registered. Reasons for this could be that the property has been previously sold on a private contract or the property is an inheritance between family member(s). It is therefore necessary to establish whether it is possible to form your title deed before signing a contract or handing over any of your money to the vendor.

While IBI payments (local authority contributions) may be up to date you will need to ensure that all the appropriate property details can be registered, and this will usually require the services of a lawyer. It is common with the old village properties and rural cortijos to be on the market without an escritura. But this does not mean that the property can not go to public notary for your registered title deed.

Your lawyer will first establish whether it is possible to form a deed although the completion may take a little longer than you expect. In the interim, your lawyer will hold on to your 10% deposit in an escrow account until sure of forming a title deed with the full agreement of all the vendor and/or vendors, this is especially the case with a family inheritance. If it is not possible to produce your title deed because ...

• a family member has disappeared, or
• a family member disagrees to the sale, or
• a family member has died without trace

...then do not consider buying this property, as your claim to ownership will be prejudiced, and your lawyer will return your full 10% deposit.

Buying Your Property
Once we have established that the property you are buying has a registered title deed, or that is possible to go to title deed then you now need to fix the sale price and establish the terms for your desired date of completion. It is at this stage that you will need to have the balance of your 10% ready to give to the vendor.

The Private Contract (contrato privado de compraventa)
You sign the private contract (contrato privado de compraventa) and pay your balance of the 10% deposit when signing this initial contract. Once you have paid the deposit there is a legal binding agreement (contrato privado de compraventa) between you and the vendor. This document includes some valuable information such as the names, nationalities, marital status and identity numbers (usually passport or resident reference number) of both parties, the property address and also the final agreed date of completion before the public notary office.

Note that if you fail to complete the sale within the specified time limit, you will lose your deposit. Conversely, if the vendor changes his mind or defaults, you would be entitled to rescind the contract and claim damages of twice the amount of your deposit.

From now on until after the completion of your purchase, your lawyer or legal representative will take care and assist you in all the different steps involved in the transaction, ensuring that all Spanish Legal requirements are met, that the property is registered in the vendor's name and that it is free of any outstanding mortgages, charges, encumbrances, debts or other liabilities. The purchase terms should not be limited solely to price but should also cover in detail all your requirements, for example, the completion date, the form of payment…etc.

Finally on the day agreed for the completion, your lawyer or legal representative will go with you to the Public Notary to sign The Title Deed, when you will make the final payment to the vendor, who will simultaneously pass over possession of the property to you, handing you the keys. At this stage the sale is completed. Immediately after completion, the notary office will fax your details of the new title deed to the local land registry to inform them of your identity as the new owner and so as to prevent the property being sold twice. In this way the Notary and the Land Register act together to protect and guarantee your interests. You will then have to pay the relevant taxes and have the original title deed submitted to the Land Register for registration of your title.

IBI Receipt.
The receipt for the paid-up Real Estate Tax (Impuesto sobre Bienes Inmuebles), is an important item. The IBI receipt shows first that the estate tax is paid for the current year. Also it shows the amount of the official assessed value of the property for tax purposes (Valor Catastral). The IBI receipt also confirms the existence of the house and that as such it is therefore registered for taxes, which can be an important point when no Escritura Publica exists and the owner holds the property only by virtue of a private contract. The IBI receipt of payment must be presented by the vendor when you sign the contract at the notary as it also displays the number of the Catatsral Reference (Referencia Catastral), and which since 1997, is a required part of the documentation in property transfers.

Referencia Catastral (Catastral Reference).
The Catastral Reference is the file number of the property’s registration in the land registry, which in Spain is called the Catastral, a word that exists but is rarely used in English, and which means the land registry. Property is registered in Spain by its measurements and boundaries and physical characteristics, unlike the Property Registry which is more concerned with ownership and mortgages. Land descriptions on the title deeds are often quite vague, even misleading. The Catastro is usually more accurate, because this information has been updated for some years now, with regular inspections using aerial photographs to check physical reality of land and houses.
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Signing the Deed of Sale.
Your final act of the purchase is the signing of your deed of sale (escritura de compraventa) and your payment of the balance due, usually paid by bankers draft unless otherwise arranged. As a non-resident purchaser you must obtain a certificate from a Spanish bank stating that the amount to be paid has been exchanged or converted from a foreign currency, a copy of which will be attached to your title deed. It is normal for both parties to be present when the deed is read, signed by both you the buyer and the seller, and witnessed by the notario, an official government legal agent. You can give a representative in Spain general power of attorney (poder general) to sign a contract on your behalf. This is quite common for foreign buyers, and it is usually your lawyer.

Registration.
Once you have signed the deed of sale (escritura de compraventa) then the Notary will give you a certified copy (primera copia) of the deed once it is prepared. A notarised copy is lodged at the property registry office (registro de la propiedad) and you as the new owner will have your name entered on the registry deed. Registering ownership of a property is the most important act of buying property in Spain, as until the property is registered in your name, even after you sign the contract before the notary, charges can be registered against it without your knowledge. It is only when the escritura de compraventa is registered and becomes an escritura publica that you are the legal owner of the property.

Escritura Publica.
The original title deed is always filed at the Notary, so you will receive an authorised copy. Unlike some systems of property registration, in Spain it is not the piece of paper itself which counts but it is the inscription in the Prioperty Registry Office (Registro de la Propiedad). If you lose your deed, you can always get another copy from the Notary.