Yet more unlucky foreign home buyers in Spain will face losing their properties this week as the Alicante government cracks down on dwellings built without planning permission. The future of more then 1,200 homes built on green belt land on the outskirts of the quiet farming community of Catral now hangs in the balance after town hall officials allegedly granted permission for illegal builds. This is just the latest in a series of incidents where investigations have uncovered illegal building in Spain. In this case, builders will most likely be fined and home owners compensated. Buyers can never fully protect themselves against a corrupt town hall or council but due diligence will give investors the vital 'leg to stand on' if things do go wrong.
BUILDING YOUR OWN PROPERTY
Check if the land can be built upon.
If you are buying land with the intention of building a property you should first find out whether the land is located in an area where building is permitted. Land in Spain is classified as follows: Land for development (Suelo Urbano), Green zones (Zonas verdes) where no building can take place and Rural areas (Suelo Rústico) where no construction is permitted. There are also rules limiting building size in relation to plot size. If your land is in the country, you should check at the Town Hall (Ayuntamiento) where the land is registered, to see if there are encumbances attached to the plot. It is possible, for instance that a path crosses your land which would render the plot out of bounds for development.
Check for charges.
Check at the Property registry whether the land you want to buy is free of charges or not. Ask your lawyer to inspect the Town Plan and the partial plan (if you are buying a plot located within an urbanization), in order to know the developments planned for the area where your land is located and to ensure that the urbanization is registered and legal.
Sign a contract.
Once the plot is given the all clear you should sign a sales contract before a notary, taking legal advice first. Next you will need a building permit which can be obtained after you have submitted architectural plans. You will need to find a reliable builder and draw up a contract outlining payment terms, completion date and penalty clauses for late completion. Your Spanish Lawyer must check this contract before you sign it.
Build to standards.
Your building will be supervised by a clerk of works who will ensure that it complies with the construction standards. Once the house is built, it must be registered with the Spanish Property Registry, as your deed contains only the plot registration. You should make a declaration of new work (declaración de obra nueva) in order that your house appears in the deed. The building permit, the certificate of building completion and the certificate of occupancy will be also required. If you are not a Spanish resident you will need to present a bank certificate to show that you have imported the money from abroad, in order to avoid that non- residents use black money earned in Spain to build his house.
BUYING NEW OR OFF-PLAN PROPERTY
Special care must be taken when buying new property in Spain and a good lawyer is an invaluable asset in the process. The following should be checked before proceeding with the sale.
If you are buying in an urbanization in Spain, you should first check the Partial Plan (Plan Parcial). It is the plan of building plots, which must be approved by the urbanism department (town planning department) of the Town hall where the plots are recorded. This plan assures that your urbanization is legal and that there are no other developments planned nearby that could affect your new property. Ask your lawyer to check this carefully.
Conform with Coastal Law.
If your property is going to be built near the beach, make sure that it 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.
Sort out the paper work.
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 will need this in order to obtain a 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 deeds be duly finalised and notarised.
Check Builder's liability for construction defects.
A private contract must be in place between a buyer and seller until the public deed of purchase is ready. It's usually a simple document in which the seller expresses their intent to transfer the property to the buyer, and the buyer expresses their intent to buy at the price and conditions agreed upon. At this time, the buyer also gives to the seller a percentage of the agreed-upon price. The typical agreement in Spain is if the buyer backs out of the contract, they lose the deposit; if the seller backs out, they have to pay double. Sign the agreement in the presence of a notary and seek legal advice first.
SECOND HAND PROPERTY
Sort out the paperwork.
Ask for a 'Nota Simple' at the Property Registry, in order to obtain the full details of the owner, the exact size of the property, and whether the property is free of charges or is otherwise subject to mortgages, restrictions on use, or court orders for seizure. If there is a mortgage on the property, make sure that the seller confirms that the payments are updated, otherwise the bank could seize the property. Also check if the house is rented out as the Spanish rental law protects the tenants. Check the Partial Plan, if your property is located within an urbanization. If your house is near the beach, you should check if it is built in conformity with the Spanish Coastal Law. Check that the building licence, certificate of completion of the building and the certificate of occupancy have been issued.
If your property does not have a registered title...
This is often the case with country houses either because the former owners wanted to avoid paying transfer taxes and fees, because the owners of the property are various brothers whose family never had registered title, or because the original owner had died without registering the property. Your property may be already registered in the name of a person who no longer claims it because he sold it to someone on a private contract, who has never registered the sale.
If you wish to go ahead...
If you are willing to buy a property which do not have a public title deed (escritura pública de compra-venta), you may establish the title through a process called Expediente de Dominio.This is a long and complex process which requires court action, and involves publication of your claim in the National Official Gazette. You should also file a certification at the Spanish Property Registry (Registro de la Propiedad) and the Catastro office (Oficina del Catastro), describing the state of the property and that it is not legally registered. A good Spanish lawyer is essential.
