Real estate sale and purchase
The Spanish economy has been hardly affected because of the Covid-19 pandemic. Many people have lost their job, have been forced to close their business and/or have experienced a loss of income.
In front of a situation like the current one, the Real Estate market might result very affected as it is already happening.
There are several cases of people that have signed a sale & purchase contract (in Spanish: “compraventa”) concerning an apartment or a business facility, people who cannot obtain funding to pay the rest of the price, construction companies that have been forced to stop the construction process and more cases in which legal advice provided by a lawyer on time is key.
Hereinafter some examples of situations that should be avoided:
- The sellers, promoters and Real Estate agencies sometimes offer you booking contracts (in Spanish: “contratos de reserva”) that do not give you any rights in exchange for the payment of a high amount of money, or they offer you properties with many legal problems. In some other cases, these sellers do not have the mandatory legal warranties to guarantee the amounts that the purchasers pay in advance, or they are in a financial or legal situation that makes it very doubtful to recover the money.
- Some other times the Spanish law sets out a “default” rule that, if you do not expressly estipulate what you precisely want to agree on, they have the opposite effect of what you consider normal in accordance with Dutch law.
- Sometimes the heirs try to sell a property before finishing the inheritance proceedings, when they still cannot, or with unknown debts affecting the property or the inheritance.
- A purchaser may want to withdraw from a down payment (in Spanish: “arras”), try to renegotiate the contractual terms of the contract that has been signed, modify the terms of their mortgage. Maybe you would like to sell some of your properties to obtain cash, but you should protect yourself from later claims.
- You may be interested in participating in an auction of a property, but trying to participate in it when it is too late to comply with some essential formalities to participate, or you do not know which debts get transferred with the property to the new owner.
Let oneself go by fear and selling hastily is as dangerous as purchasing while thinking that it is the moment to purchase a theoretical bargain. Crisis are also lived as an opportunity. Therefore, there are people or companies interested in taking advantage of this situation to invest. Besides, before making a Real Estate investment in Spain it is nowadays necessary to comply with some requirements that might take some time as well as to prepare some documents and detailed information about the financing sources for the transaction. In Spain there are lots of rules that differ from each other according to the region in which the investment takes places concerning taxes, allowed activities, the possibilities to build or reform and even the rules and requirements of the contracts or the use of the properties.
OTIS Advocaten is a law firm based in the Netherlands and Spain. Our lawyers are experts of both the Dutch and the Spanish law and are aware of the particularities that make a sale of a property in Andalusia different from a sale in Catalonia or the Balearic Islands.