December 2nd, 2014
Advance preparation for the sale of a Spanish property can simplify and speed up the sale process; and minimise transaction costs.
The following is a reminder of the principal ‘paperwork’ items to attend to, before putting a property on the market for sale.
1. Title Deeds. The original Title Deed (‘escritura’) will be required- or if it cannot be located, then an official copy should be obtained from the Notary’s. The Registered Title details can be extracted from the Title Deed; and an up to date copy of the Registered Title should be obtained from the Property Registry. Sometimes there are matters which may require attending to before the property can be sold- for example, references to previous mortgages may need clearing off the Registered Title; or there may be inheritance issues which require completion; or title/ property description corrections.
2. Energy Performance Certificate. In order to market a property for sale, Spanish property owners are legally required to obtain an up to date Energy Performance Certificate. Usually, estate agents are able to recommend local authorized certificate providers.
3. Rates Information. The full rates details for the property will be required, together with proof that there are no rates arrears. Reference numbers can usually be found on the receipts for rates (IBI/ SUMA) sent out by the local Town Hall (‘Ayuntamiento’) or the paying bank. Missing information can be obtained from the ‘Catastro’- rates department of the Town Hall.
4. Planning Permission. Such evidence as is available from the time of acquisition of the property will be required, to prove compliance with planning legislation; and permission for the legal occupation of the property. For any missing documentation, official copies- or confirmation of legal compliance- can be obtained from the planning (‘urbanismo’) department of the Town Hall.
5. Community Details. Full details of the Community Administrator should be available, together with a copy of the Community statutes and (if possible) copies of the minutes of recent Community meetings. A summary of Community charges over recent years will be needed; and also details of any forthcoming charges, which have already been notified. The most recent statement/ receipt of Community charges will be needed; and before signing the sale and purchase deed (‘escritura de compraventa’) before the Notary, a Certificate by the Community Administrator confirming that there are no arrears of Community charges will be required.
6. Capital Gains Tax/ Accounting. If applicable, (check with fiscal adviser) all construction/ works invoices and other accounting paperwork should be collated to be ready to provide along with fiscal submissions relating to Capital Gains Tax liability- principally to ensure readiness for claiming any applicable deductions/ allowances.
7. Services Contracts. Receipts for the most recent payments of property outgoings (principally electricity/ water; and if applicable, gas) will be required, together with the latest contractual terms of supply- in the absence of copies, these can be obtained from the local offices of the services supply companies.
8. Power of Attorney. If the sellers do not anticipate being personally present in Spain for the legal sale process, then it will be necessary for a Power of Attorney (containing the necessary legal powers) to be signed in favour of the appointed representative/ legal adviser.
9. NIE Certificates. NIE numbers will be required for any registered owner; and up to date NIE certificates will need to be provided to the Notary on completion.
10. Mortgage. If there is an outstanding mortgage on the property, details will be required as to the arrangements / requirements of the lender as to redemption; and also any charges which will apply.
11. Bank Account. Any Spanish property seller will generally require a current bank account in Spain into which the completion monies will be paid. It is advisable to be certain in advance, as to the charges which will be applied in crediting the completion monies to the account; and for the onward transmission of the completion monies. Spanish bank charges can be surprisingly high; and the manner of payment of the purchase price; and onward transmission/ form of Foreign Exchange service used, can significantly affect the costs.
12. Legal Representative. In order to be fully protected in any Spanish property transaction, it is essential to appoint in writing a legal representative, who is independent- both from the other party to the transaction and also from the estate agent negotiating the transaction. The appointed legal representative must be duly qualified, registered with the applicable Colegio de Abogados (Law Society equivalent) and up to date with their professional practice requirements. They must also carry adequate professional indemnity insurance cover. It is also essential that all communication is in a language which both the property owner and the legal representative speak perfectly. There should be no risk of any misunderstanding.
The Legal 4 Spain team provides a full property conveyancing service (buying and/or selling) throughout Spain. We are always happy to provide a competitive cost estimate at the outset of a transaction on a no-obligation basis.