Seek guidance from a specialist in Spanish law - ensure that the lawyer you appoint is an Abogado (Solicitor) - a member of the Colegio de Abogados local Spanish Bar or Law Society. A Gestor is not a lawyer but an administrator who works in a privately run office (a Gestoria) that deals with matters related to Spanish bureaucracy, including property issues and tax declarations.
There are also Spanish based specialists, such as, The Rights Group SL (TRG), which is run by the author. I am a local resident and an English trained Solicitor and have operated TRG in Spain for the last four years. We work for clients from all over the World who are looking to or have contracted to purchase property in Southern Spain.
TRG has an established network of currently, twenty-six member companies. They are all “test driven” and bilingual providers of professional services, and include Abogados, Accountants, Surveyors, currency, insurance and mortgage brokers and more recently the suppliers of bespoke furniture packages. We introduce our clients to the service provider and the service provider, for good legal reasons enters into a direct agreement with the TRG client to provide their services.
The advantage of using TRG is that once appointed we will “drive” the client’s purchase in Spain – becoming the client’s eyes and ears, asking the right questions and getting answers. This is achieved by TRG at no additional cost to the referred TRG client.
It is equally important to check that the law firm you have instructed is adequately covered by a professional indemnity policy. Abogados have insurance provided by their local Bar Association but more conscientious lawyers usually obtain a more comprehensive Professional Indemnity policies. This should give a client added comfort.
In addition, it is important to make sure you know exactly what work is covered by the quote you receive from the law firm. Some lawyers may cut corners in the conveyancing procedure, which could potentially lead to disastrous consequences and unpleasant surprises in the future. You need to make sure that you cover a wide variety of subjects in addition to the contract and the searches. For example, you should receive advice on who should own the property as this has an impact on taxes and inheritance arrangements.
Lawyer’s fees for a purchase or sale are usually based on a percentage of the purchase price and they vary between 0.75% and 1.5% - with applicable VAT equivalent and disbursements on top - with minima also applying.
Spain has a fairly pro-consumer legal system and legislation exists to protect a purchaser of an “off plan” property against the developer’s bankruptcy, for example, during construction and pre-completion. This is called an “ Aval Bancario” or Bank Guarantee.
The law requires a developer to guarantee the amount of the deposit paid by the off plan purchaser plus 6% annualised interest. This should be achieved either through a bank guarantee of an insurance policy to the same value.
Your lawyer should ensure that evidence of the guarantee or insurance policy is obtained at the time of signing the Contrato de Compraventa (see below). A mechanism should also be agreed for the guaranteeing of additional sums paid by way of stage payments. This is a very important protection for the purchaser and without these guarantees being firmly in place your interests are obviously exposed.
© The Rights Group SL 2006 (Marbella)
Mark FR Wilkins
www.therightsgroup.com (under review)
+34 600 343 917
Please note that the information provided in this article is of a general interest nature and intended as a basic outline only. You are well advised to contact a professional for advice specific to your circumstances. Nothing contained in this article should be seen or taken as the writer or publisher providing legal or financial advice.