Mj Carrillo Lawyers. Spain

New
Properties

New Properties

The purchase contract

We anticipate you a list of the essential provisions that the contract should contain:

  1. Seller and buyer identification.
  2. Seller and buyer legal capacity to make a contract.
  3. Description of the property, details of the useful surface, common zones and accessory services, and its location.
  4. The selling price and taxes levied on the property to be paid.
  5. That in case of dispute, both parties agree to submit to the exclusive competence of the Spanish Courts from the location of the property.
  6. Signature of the parties to the purchase contract.
  7. Payments terms while the apartment is under construction, up to its completion.
  8. Bank account details where advanced payments are to be paid in.
  9. Reference to the penalties to be applied either in case the buyer does not accomplish the payment term agreed, or the seller does not provide the qualities promised.
  10. Possession date: the date when the buyer will take possession of the house. The contract shall also contain the penalty applicable in case the developer does not complete the construction of the property on time.
  11. Plan of the property and its description and specifications (memoria de calidades)

Documentation the developer must provide you together with the private contract:

  1. Description of the property and the building where it is located, the common areas and accessory services.
  2. Plans of the property and its location.
  3. Construction details: electric wire, fire protection measures...
  4. Reference to the materials used in the construction of the property.
  5. Details of registration of the building in the Property registry (Registro de la Propiedad), or mention to the non registration of it.
  6. Copy of the building permit.
  1. Advanced payments and precautions:

    Some basic ideas:

    • The minimum content of the contract which oblige the buyer to deliver the advanced payments to the seller, should include:
      1. The developer obligation to refund you the advanced payments and its interest in case of the delay in starting the building or in the completion of the property or even in case they don not get the cedula de habitabilidad (certificate of occupancy)
      2. Reference to the bank guarantee or insurance contract, identifying the guarantor.
      3. Specification of the Bank and also the bank account in which the buyer should deposit the advanced payments.
      4. Since the very beginning the developer should give the buyer the document with the guarantees to the amounts deposited as advanced payments.
    • The guaranteed quantities are not only the advanced payments but also the interests until the complete refund of the money.
    • That guarantee is just destined to the advanced payments and not to other matters as building defects or the apparition of charges and liens.
    • The obligation of the developer to have a separated bank account destined only to the funds from the purchase.

  2. Precautions and expenses

    Traditionally, the seller has paid the notary fees and the plusvalia tax, as he is the one making the profit on the increase in the land’s value, while the buyer pays the impuesto de transmisiones and the registry fee, as he is the one who is interested in making sure the property is truly registered to his name. Spanish consumer regulations state that this should be the normal division of costs.

    It is a frequent practice; however, for the contract to state that the buyer will pay all the expenses arising (todos los gastos). There is nothing illegal about this. Remember that the two parties are free to make any contract they choose.

    This practice, which may seem unfair to the buyer, has come about because tax bills, especially the plusvalía, have often gone unpaid, especially by non-resident sellers. By the time the new purchaser realised this, the seller was gone and the buyer stuck with the taxes anyway, as they were billed to the owner with all the taxes is least straightforward and avoids complications.

    Nevertheless, you can use this point in negotiating your final price. If the contract you are offered states that you as the purchaser must pay all taxes and fees, you could suggest that the seller take something off the price.




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