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Contents:
1. First
information
If you have decided to buy an unfinished
property in Spain, the developer is legally
required to provide you with the following
information:
• Details of the Developer's
inscription at the Spanish Company
Registry (Registro Mercantil), its
trade name, address and data of the promotional
society.
• House plans and general location of
the unit.
• Instructions concerning the use and
maintanance of the installations.
• Building specifications and description of
the electricity, water, gas and
heating installations and fire protection
measures. Dimensions and specification of the
fixtures and fittings. This information is
contained in the memoria de
calidades.
• Property description and details of the built
area, common zones and additional
services.
• Price of the property and additional services
and terms of payment.
Keep in mind that anything the developer
publishes must be complied to, as any
publicity the developer disseminates has
the power of a legal contract.
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2.
The deposit and the advanced payments
Normally, you reserve your
apartment while construction is ongoing.
You sign a private contract with the seller and
put down a non-returnable deposit (about 10% of
the property total price).
In the meantime, you will usually be expected
to make advance payments (proportional parts of
the property's total price), which should be
protected by an insurance policy, until the
construction is completed. By that date you
sign the purchase deeds (contrato de
Escritura de Compra-venta) before a
Spanish Notary.
Be aware that not until the property is
completed, does the buyer obtain its
ownership.
You must open a bank account to make these
payments as for the developer receive them
periodically.
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2.1.
Guarantee of advanced payments
The shared parts of the property total price,
must be insured in order to get the return of
all money paid in advance plus interest at 6%
of penalization in the event the developer does
not commence the works of the propety on the
date scheduled, or in case of non-completion of
the property.
On signing the sales contract, the developer
must providedocumentation with the type of
guarantee for the andvanced payments and
indication of the guarantor.
In the event the insured events occur, the
purchaser may demand the developer for refund
of the advanced payments with an annual 6%
interest increase. If the developer does not
answer the demand, the purchaser should contact
the guarantor to demand for refund.
Your lawyer shall inspect that your private
contract contains reference to this
guarantee.
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3. The
private sales contract
Buyer and developer shall sign a private sales
contract, which serves tosettle the conditions
for the future purchase, once the construction
is completed.
This contract shall contain the following
provisions:
• Seller and buyer identification.
• Seller and buyer legal capacity to make a
contract.
• Description of the property; details of the
useful surface, common zones and accessory
services, and its location.
• The selling price and taxes levied on the
property to be paid.
• That in case of dispute, both parties agree
to submit to the exclusive competence of the
Spanish courts from the location of the
property.
• Signature of the parties to the purchase
contract.
• Payment terms while the apartment is under
construction, up to its completion.
• Bank account details where advanced payments
are to be paid in.
• Reference to the penalties to be applied
either in case the buyer does not accomplish
the payment terms agreed, or the seller does
not provide the qualities promised.
• Possession Date: the date when the buyer will
take possession of the house. The contract
shall also contain the penalty applicable in
case the developer does not complete the
construction of the property on time.
• Plan of the property and its description and
specifications (memoria de calidades).
Together with the private contract, the
developer must provide you the following
documentation:
• Description of the property and the building
where it is located, the common areas and
accesory services.
• Plans of the property and its location.
• Construction details: electric wire, fire
protection measures…
• Reference to the materials used in the
construction of the property.
• Details of registration of the building in
the Property Registry (Registro de la
Propiedad), or mention to the non registration
of it.
• Copy of the building permit.
this is not the final contract, which shall be
signed before a Notary on a public deed.
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4.
Signing the deeds. Registration
As soon as the construction is finished you
shall sign the Purchase deed (Contrato de
Compra-Venta) before a Notary, which shall
contain the mortgage contingency, and the
specifics of it: amount, rate and term, where
applicable.
The Notary is the public official who makes
this contract to be legal. He certifies that
the parties sign the contract properly. He
keeps the original document in his files in
case any problem could arise later. Note that
the notary does not certify that all statements
are true, only that the parties have sworn to
them.
The purchase deed must be registered with the
Spanish Property Registry (Registro de la
Propiedad). Once it is done, the title deed
(Escritura Pública de Compra-Venta) fully
assures your title: the registered contract
makes you the owner of the property.
The registration of the house is also important
for tax purposes, the real estate tax (IBI tax
) shall be paid every year since you could be
fined by the Spanish tax authorities.
If you cannot be present to sign the contract,
you can make a power of attorney allowing
another person to sign it for you, if
necessary.
You shall be receiving the keys of your
property upon signature of the contract in the
presence of a Notary.
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5. Taxes to pay
The taxes referred below shall only be paid on
purchasing a new property:
• Value added tax (IVA) 7% of the total price.
Iit is necessary to be paid as the sale is a
business operation between a developer and a
private individual..
• Stamp duty (Impuesto de Actos Jurídicos
Documentados) 0.5%: It must be paid upon
signature of notarial document.
To pay these taxes, you will be required to
obtain the the Spansih tax identification
number, say the NIE, if you are non-resident,
or the NIF if you are Spanish resident.
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6. Fees to pay
When buying a new propert, the following fees,
subject to VAT, shall also be paid:
• Notary (Notario): You must pay the notary
fees when you sign the deed, these are fixed on
official scale and will vary depending on the
size of the property.
• Property Pegistry (Registro de la Propiedad):
You must pay the registration of the deed at
the Spanish Property Registry in order the
property of the house can be transferred to
you. Before going to the registry, you should
have paid the corresponding taxes, its receipts
must be given to the Register, otherwise you
will not be allowed to make the
registration.
Your Spanish Lawyer may inform how much these
fees will be.
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7. Other
points to check when buying a new house
In order to avoid possible problems that could
arise later, do not forget to check every point
described below. Otherwise you may find that
your dream house is illegally built.
You will do well to have a skilled Spanish
Lawyer handle with this paperwork, as they know
the ins and outs of it.
7.1. The
Partial Plan
When you are willing to buy a dwelling zoned
within an urbanization in Spain, you should
first check the Partial Plan (Plan Parcial). It
is theplan of building plots, which must be
approved by the urbanism department (town
planning department) of the Town hall where the
plots are recorded in.
This plan assures that your urbanization is
legal and that there are no other developments
planned nearby that could affect your new
property. An urbanization is a planned
community which provides a minimum of services
and a minimum of quality control of the
constructions, installations, roads…
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7.2.Building
in conformity with the Coasts Law
If your property is going to be built near the
beach, make sure that your property will comply
with The Spanish Coastal Law (Ley de Costas) of
1988 or that the builder has an authorization
from the Coast department, which provides that
the authorities must restrict building within
100 metres of the beach and establishes a zone
of influence (zona de influencia) up to one
kilometre inland.
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7.3. The
building licence, the certificate of completion
of the building and the certificate of
occupancy
The builder must have
obtained the building licence (licencia de
obra) issued by the Town Hall, which allows him
to build the house.
The certificate of the building completion
(certificado de fin de obra) is issued by the
architect once the building is complete. The
developer needs it in order to get the
certificate of occupancy.
The developer must provide you with the
certificate of occupancy, which is issued by
the Town Hall (Ayuntamiento). This
administrative document permits you to inhabit
your new dwelling.
Only when the certificates of completion of the
building and the certificate of occupancy have
been issued, can the purchase deed be duly
finalized and notarised. The developer shall
obtain and pay them.
It could be difficult to register the sale if
the building does not have legal approval.
Other problems could arise; demolition of the
property could be enforced.
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8. Builder's liability for
construction defects.
Once you receive your keys, you should check
your house in order to detect whether there
exist any obvious defects or not. Homeowners
can, in some cases, force to fix their house
after they move in, under some specific
conditions.
The term of guarantee for possible construction
defects is as follows:
For those houses, which applications for
building licences were issued before May of
2000, the guarantee periods are as follows;
6 months, at least, since
the deed was signed, for defective construction
which have no effect on the building's final
purpose.
10 years, from the date of completion of the
works for defective construction of the
essential parts of a building.
15 years, for the cases in which the contractor
had no complied with the terms of the
contract.
For those houses which applications for
building licences wereissued after the month of
May, 2000, the guarantee periods are as
follows;
1 year for defective construction which has an
adverse effect on the finish of the house
(electrical installations, painting…). In this
case, the builder is responsible for all
property damages.
3 years for defective construction which has an
adverse effect on the habitability conditions
(humidity…). In this case, the other agents
involved in the construction of the building
are liable for the property damages..
10 years for defective construction which has
an adverse effect on the building's
basic structure.
Spanish law provides a time limit of 2 years to
claim for construction defects from the date on
which the deffect was apparent and known to the
proprietor, provided that the defect arose
during the guarantee period described
above.
The different agents will be personally and
individually liable for property damages to the
buildings caused by their own acts as well as
by the acts of others for whom they are legally
responsible.They will be jointly liable when
the responsibility for the damages cannot be
attributed to any one individual or entity.
These are only general guidelines and not
definitive statements of the law, all questions
about the law's applications to individual
cases shall be directed to a Spanish Lawyer.
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