Purchasing a Costa Blanca property: Timeline
After a property has been selected:
A reserve payment of € 3.000 is made to secure the property, fix the price and remove it from sale. A reserve will be for a stated period, usually 15 days, during which time the owners provide the required proof of their title and documentary checks are completed by the agent, especially with regard to any outstanding debts (if the property is not in a proper legal condition for sale the € 3.000 reserve is returned). The agent then prepares the sales contract that commits both parties to the sale with a 10% deposit payment (less the € 3.000 already paid) and a jointly agreed date for notary completion.
The reserve process may be extended if the property is derived from an inheritance. The inheritance needs to be accepted by the heirs in a notarial deed of acceptance. In this case the notarial sale needs to follow the registration of the inheritance, and the reserve period has to allow enough time for the process.
The Purchase Contract
The purchase contract commits both parties to the sale with a deposit payment of 10% of the purchase price (less the € 3.000 reserve already paid) and it sets out the conditions of the sale:
- The agreed price.
- The completion date.
- The obligations of the purchaser and the vendor with regard to taxes and fees.
- Included furnishings with an agreed list.
- The form and timetable for payments.
- Penalties for non-completion by either party.
- Specifying any non-declared part of the property (such as a swimming pool) with the obligation on the vendors to notarialy declare it at their cost.
- Specify the legal jurisdiction (Spain).
The Public Title Deed (Escritura)
On the contractual agreed date both parties visit the notary office with a prior appointment, and the notary checks the identities of the purchasers and the vendors (and their NIE numbers), and witnesses the signature of the Deed of Sale. The final payment is made and the purchasers receive the keys.
Prior to the notary appointment, the agent will have prepared a set of legally required documents that are delivered to the notary office as the basis for the preparation of the new deed, and the notary will check these independently in the property registry and the local tax office (SUMA).
Following European law, the notary also requires to see an Energy Certificate for the property that the agent will usually arrange on the vendors behalf.
In the event that the property includes some construction work not declared in the property registry, the required set of legalization documents (architects certificate and georeferenced plan) will be provided by the vendors, to allow the notarial declaration of the building work (Declaracion de Obra Nueva) with its subsequent inscription in the property registry. This will usually happen just prior to the signature of the title deed, with both documents being presented to the property registry together.
The After Sales and Registration process.
The purchasers will usually supply the agent with sufficient funds to pay the transfer tax (I.T.P. Impuesto de Transmisiones Patrimoniales) 10% of the purchase price and the agent will pay this to the tax office on their behalf (Modelo 600). With the payment receipt, the agent can then collect the original deed from the notary office, and and present it to the property registry - with notary and registry fees of about € 1.500. After about a month the property is registered and the agent collects the registered original deed on behalf of the new owners.
The agent will also arrange the transfer of utility contracts to the new owners along with standing orders, and advise the local tax office (SUMA) of the change of ownership. Alternatively a specialized office (Gestoria) could deal with this step.
The vendors (if they don't have Spanish tax residency) will have a 3% retention of the sales price payable to the tax office (Hacienda). The agent will hold this retention and make the payment on their behalf along with the smaller Plus Valia retention (local property transfer tax) payment. Apart from that, the vendors only need to make sure that they cancel their existing standing orders on the property and provide all copies of the keys.
The Miró Agency are happy to assist with the entire process and keep both parties fully informed.
When everything is checked and in order, the purchase contract can be signed and the deposit paid to the owner or their legal representative. The deposit is 10% of the purchase price. It is important that the completion date specified in the contract gives sufficient time to both parties to complete the mortgage procedure, arrange flights, find alternative accommodation etc.and it would usually fix a notary appointment for completion 1-2 months ahead. It will detail any mortgages that exist on the property and commit the seller to cancelling them prior to the sale and state that the property is sold free of debts and tenancy agreements. If the property is sold furnished it will say this and a furniture list should be attached. On signature of the purchase contract both parties agree to complete the sale in a Public Title Deed (Escritura) witnessed by a Spanish notary.
Option to Purchase contracts are quite common in Spanish conveyancing and serve the same purpose as the Purchase Contract in fixing a price and a notary date but with the difference that the buyer holds an option to buy a property rather than having bought it (as he would with a purchase contract) although both have a commitment to sign a Public Title Deed.
Building Contracts and New Property
If you decide on a new propety you would usually sign a building contract when you complete the purchase of your building plot. Again the contract will specify a price and completion date but it will also state at what level of construction each payment is made (e.g. 20% on finishing the roof), how many square metres are to be built and a summary of material qualities (memoria de calidades).
When the villa is finished, the builder and architect provide a set of documents that the notary checks before allowing the signature of the deed of declaration of the house (Declaracion de Obra Nueva). The most important of these is the architect's final certificate (Certificado Final de Obra) stamped by his professional college and confirming that the building has been completed in accordance with his project. Subsequent to the title deed, the builder, A.P.I. or lawyer will need to obtain a habitability certificate (Cedula de Habitabilidad) from the town hall to allow water and electricity to be contracted.