Reserve the property
If you wish to reserve a property and take it off the market one can usually make a first deposit of around 3000 euros if the seller agrees. Typically the agreement is that the property will be reserved for one month. This reduces the risk for the buyer and allows some time to sort out finances before committing to a full deposit.
Step 1 – Contrato de Arras Penitenciales
The next step is to make a deposit (Arras) to reserve the right to buy the property and thus take it off the market.
In Spain, a legally binding contract Contrato de Arras Penitenciales is drawn up by a solicitor/lawyer and signed by both the buyer and the seller. This contract exists to protect both buyer and seller.
The Contrato de Arras Penitenciales outlines details of the agreement, such as details of the property, the agreed sale price, the agreed deposit amount, the method of payment (typically Bank Draft), the timescale for the close of sale, etc.
Prior to signing the Contrato de Arras Penitenciales, your solicitor will verify the details of the property as held by the land registry, confirm the seller is the owner, and check whether there are outstanding debts on the property.
The amount of the deposit (arras) is deducted from the final payment on sale of the property.
What happens if the buyer pulls out?
In general, if the buyer pulls out after signing the Contrato de Arras Penitenciales, the buyer must pay double the deposit amount to the seller (or the amount agreed in the Contrato de Arras Penitenciales).
What happens if the seller pulls out?
In general where the seller breaks the agreement to buy the property after signing the Contrato de Arras Penitenciales, the seller loses the deposit.
Step 2 – Escritura de Compraventa del Inmueble
In order for the solicitor to draft the Deed of Sale (Escritura de Compraventa del Inmbueble) both parties are required to bring their identification (NIE document if you are a foreigner, DNI documentation for Spanish nationals).
If there is any outstanding debts on the property (e.g. mortgage, community charges etc) this should be cancelled prior to or on signing the Deeds.
The seller must provide, amongst other, the following documentation:
- Energy Certificate (Certifcado Energético)
- Certificate from the community of owners (Certificado de la Communidad de Propietarios) if appropriate.
- The last council tax bill (IBI – Impuesos sobre Bienes Inmuebles)
- Certificate specifying the property is legally habitable (Cédula de habitabilidad de primera y segunda ocupación) if appropriate.
The deed must be signed by a notary (chosen by the buyer) and the cost of the notary is split equally between the buyer and seller unless agreed otherwise. However, it is common practice in Spain for the buyer to pay the notary fees. The buyer pays the cost of registering the property with the land registry.
It’s then a case for the solicitor to communicate the sale to the appropriate Spanish authorities (land registry, town hall etc).