Perhaps one of the main concerns of potential buyers of property in Spain is – is it safe? In this article we look at the measures you should take to make sure that it is.
It’s your dream to own a property in Spain. Perhaps as a holiday home or maybe even as your main residence. Many people have had this dream before and some have acted upon it.
The majority of these have bought safely and continue to enjoy the pleasures of home ownership in Spain. There are a few people, however, who encountered difficulties.
In the past
But why? The property market boom meant that the number of people purchasing houses in Spain escalated suddenly. This left some ground for the unscrupulous and there were property developers who made the most of a market that was hungry for land and development and perhaps not always held to account.
The result? The proper permission to build was not always obtained from all the sources it should have been. A situation that only gradually came to light.
Then came the property slump. In some cases property developers went under and took deposits with them. Unfulfilled obligations are still being chased through the courts.
The situation now
It is fair to say that the mistakes of the past have led to a more cautious market generally. Purchasers of Spanish property tend to be better informed and ask the right questions. The buying frenzy of the years 2000 – 2008 has calmed and in most cases, it’s only those with a proven track record and longevity that remain.
That doesn’t mean to say that purchasers should throw caution to the wind and imagine that it won’t happen to them. The need to have advice and representation by someone with your interests at heart is crucial. In this article we look at the precautions you should take when it comes to purchasing a property in Spain.
If you were buying a property in your own country you wouldn’t even consider going ahead without having checks completed on it. You’d want to know that it was structurally sound and that there were no major issues to do with its legality. There is the same imperative to check out a potential purchase here in Spain too.
You should have checks done on the property before you sign anything. These should include:
- The legal status of the property
- Utilities and taxes check
- Legal status of home improvements
Your solicitor should make a thorough search of the Spanish Land Registry in order to check that everything is in order. This will include a check of the nota simple which includes a description of the property, who owns it, if it conflicts with any planning laws and if there are any outstanding debts held against it.
Your solicitor should also ask for a certificate from the Catastral Registry. He/ she should check the Catastral reference and plan to see if any additional work has been done on the property that has not been registered.
Certificate of Habitation
The solicitor should also check:
- the certificate of habitation/ first occupation licence (formerly: Cedula de habitabilidad, now Licencia de primera ocupación), or
- the second occupation licence (Licencia de segunda ocupación)
Each new property in Spain must be issued with an occupancy licence by the town hall. This is an administrative document that shows that both the property as well as its urbanisation are completed and ready for habitation. It is only at this point, when the infrastructure is in place, that it is issued.
Without an occupancy licence you won’t be able to complete on a mortgage or take out a new water contract.
Checks on utilities and taxes
Any outstanding taxes must be paid before you can take ownership of a property. You will need to have checks made that electricity and water bills are up-to-date and that community fees have been paid. Your solicitor should also check that there is no outstanding council tax debt or plusvalía tax.
Nearly every significant home improvement requires a licence in Spain. This applies to even relatively minor work that might have been carried out on the property. Permission is also required from the community before building work begins.
If any alterations made have not been recorded on the Title Deed then this can cause problems on property transfer. Any differences between the property as it’s registered and how it actually is, should be rectified now.
Whilst your solicitor is hard at work completing these checks for you, there are some rudimentary checks that you should be doing of your own. Find out about the community of owners. How does it work, who’s in charge? Does it function well?
Find out more about the local area. The services and infrastructure that there is locally will make a very big difference if your are living there and even if it’s just a holiday home you may still need a health centre or post office.
Talk to people locally if you can. Are they happy living in the area? Would they recommend it? Of course, you will always have people who see the half empty side to where they’ve chosen to buy but generally people will be more than willing to share their experiences and their views.
Hopefully, you will have many years during which you can take pleasure in the Spanish property that you researched properly and engaged professionals to help you with. This is a long-term investment not only of your money but your hopes for the future. It’s worth taking the time to ensure you buy safely.