6 pitfalls to be aware of when buying a property in Spain

Moving to Spain for your new life and your new home can be a dream come true. However, there can be certain pitfalls to look out for when buying property in Spain. The good news is they’re easy to avoid with proper research, planning, and preparation. We’re here to help you overcome the most common problems when buying in Spain so your experience can be as stress-free as possible.

This blog will highlight 6 pitfalls that could be a real problem for you during the home-buying process if you don’t prepare for them in advance:

1. Buying a property without the necessary due diligence

Once you’ve found your ideal property, we’d recommend making sure that you don’t simply ask the same questions you would in your home country; the Spanish property market and legal system have some distinct nuances. Before you consider paying a deposit, you need to make sure you have all the necessary information about required registrations, licences, and permissions.

This can save you from potentially unexpected delays, additional costs (for example fines or payment of any existing debt/community fees), or in extreme circumstances, even demolition orders.

• Has the property been built legally?
• Was the property built with planning permission?
• Was the land on which the property was built registered?
• If there is a shed/garage/pool, has this been registered?
• Is the whole property legally registered?

These questions are especially important. In the past, many developers built properties in Spain illegally or without the required planning permission. Buyers have also not previously known the importance of asking these questions so have ended up buying property without the required registrations.

• Do I need to do a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis for any future work?
• If any renovation work has already been done, was it done legally and are there certificates?
• Are the urban planning records for the property available?
• Are there any existing boundary disputes with neighbours?
• Is the name of the owner different to that of the seller, on the property registry?
• Are there any existing, accrued debts by the previous owner?

These questions really help you understand the history of the property and how that affects what you can do with the property in the future. For example, a required legal SWOT analysis will present the strengths, weaknesses, opportunities, and threats relating to future planning work.

In most cases, your lawyer can help you get the answers to these questions from the Town Hall or local authority. They’ll be able to confirm if they need additional support from an architect.

Looking ahead - if you go ahead with your property purchase, review the new property deeds to confirm they are made out in your name.

If you’re looking to buy an off-plan, new-build home, there are also some specific considerations:

• Does the property development company exist?
• Is the building project registered with the land registry?
• Do you have proof that your deposit will be refunded if the property doesn’t get built?
• What obligations are offered regarding snagging?

Similarly, a good Spanish property lawyer will find out this information from the developer, the land registry, and by scrutinising contracts or any other legal paperwork provided. When it comes to snagging, it’s important to find out what obligations are offered when it comes to property snags (problems or defects) or faulty fixtures/fittings upfront. It’s difficult to rectify these issues after completion.

2. Instructing a lawyer without the necessary checks

Navigating the process of purchasing a property in a market and a language you are likely to be unfamiliar with, comes with its risks. You can definitely mitigate these risks by conducting detailed research based on your personal needs and the unique context of the property you’re hoping to purchase. What’s more - always check that your lawyer is registered with the Colegio de Abogados, or ‘local bar association’. You can do this by asking them for their registration number, which you can then verify with the Colegio. The Abogacía Española has lists of the bar associations.

When you’re dealing with another language, things can easily get lost in translation, or important information can get missed. In order to feel in control of the property purchase process, we suggest working with a lawyer who is fluent in both your native language and Spanish. You’ll come across plenty of documents and processes in Spanish, including potentially your contracts: working with a bilingual lawyer will help you avoid any mistakes or delays.

3. Underestimating how nuanced Spanish property contracts can be

A common, and understandable, pitfall here is the assumption that Spanish property law and subsequent contracts function the same as that of your home country. In fact, there can be some significant differences. A lawyer who is well-versed and certified in Spanish property law should help you avoid any errors, but here are three key things to look out for:

1. Don’t be led into thinking you have to pay notary fees; you actually only need to pay to get a copy of the deeds.
2. Be sure to check in the contract what proportion of the rates bill you’re expected to pay; you should actually only need to pay for the time that you’ve owned the property.
3. Make sure that your lawyer considers an ‘arras’; this pre-purchase contract gives you some financial protection in the case that the buyer decides to pull out of the sale.

4. Overlooking the finer details of Spanish title deeds

There are two main pitfalls to look out for here.

The first relates to inheritance. If the property is being sold by the children of the deceased and the legal process of inheritance has not yet been completed, it’s important to check that they are legally entitled to sell the property. If, in fact, permission is required from others before selling, you could face complex, time-consuming, and costly litigation.

The second pitfall to watch out for is that there could still be tenants in the property. Make sure you check this at the start of the process, as they’ll have first refusal to any offer to sell, by the owners. They may also be entitled to remain in the property for up to 5 years.

5. Doing limited research into the restrictions of a 'buy-to-let' property purchase

If you’re buying a property in Spain as a (short or long-term) 'buy-to-let' investment, there are a few pitfalls to look out for. Firstly, before deciding to purchase the property, make sure whether there are any local restrictions in the first place. You’ll likely need a tourism licence and these aren’t always possible in some areas.

Speaking of tourism, if your plan is tourism lettings like a B&B, don’t forget to apply for the appropriate licence and seek permission from the local town hall, as well as gaining confirmation from an architect that the property is fit for purpose.

6. Unforeseen estate agent fees

In nearly all cases, estate agents will only take fees or commissions from the seller of the property. However, there are a few who may charge an additional fee commission percentage. This is certainly not best practice so it’s best to clarify this with each estate agent you work with when buying a property in Spain. If you only find this out later in the process, you may find yourself having to pay additional money that you had not budgeted for.

In conclusion, some, or all, of these potential pitfalls could apply to you and your property search. But it’s definitely best to arm yourself with as much knowledge about the nuances of the Spanish property market and legal processes as possible. That way, you can avoid the stress of delays or additional costs that some of these pitfalls can cost you.