THE PURCHASE CONTRACT AND TITLE DEED ON COSTA BLANCA PROPERTY
The Costa Blanca is an attractive place to live and sooner or later you will be shown a property that is just what you are looking for.
The Reserve
Properties in Spain are not usually sold through single agency so it is a good idea to reserve the villa or apartment with a small payment of about € 1.500. Since legal checks still have to be carried out, and you will not yet have a mortgage approval should you want one, the reserve can specify that the payment will be returned in full in the event that the property is not in a proper legal position for sale or if mortgage approval is not given. A reserve would usually cover a period of 15 days during which time the A.P.I. agent can provide all the needed documentation which can be further verified by a lawyer.
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The Purchase Contract
Resale Properties: 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: Buying a Costa Blanca resale property is more straightforward than entering into a construction project, but if you follow that route 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.
The Public Title Deed (Escritura)
The Title Deed is signed in the notary's office with the notary as a witness. The full payment is made and you receive the keys to your new Spanish home! The original copy of the deed goes from the notary's office to the property registry and in due course you are registered as the new owner of the property. This is the final word on who owns a property and is a very secure title that every Costa Blanca owner should have. A married couple would usually put a Spanish property in both names giving a tax advantage when half the property is inherited rather that the whole of it. The notary transaction will take place in Spanish with the A.P.I. agent or lawyer providing a translation.
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