Escritura And Beyond
Harry King retired from corporate life in Britain to live in Spain. He would do so all over again if faced with the same decision, and now lives in Alicante. He is the author of a number of books including Going to Live in Spain, Buying a Property in Spain and Buy to Let in Spain.
ESCRITURA AND BEYOND
Power of attorney
This simple mechanism is useful if a purchaser cannot be in Spain when the legal paperwork requires completion. If the property is in joint names and one person cannot attend, then a power of attorney is essential. People on holiday can avoid weary queues at the notario by delegating the power of attorney to a legal representative.
- A special power of attorney can only deal with the buying or selling of property.
- A general power of attorney can deal with almost anything but is likely to embrace loans, mortgages and bank accounts.
To draw up a power of attorney, visit the local notary’s office with your passport, and details of who the power of attorney is ‘for’ and who it is given ‘to’, together with a payment of approximately 50 euros. A few days later the document will be ready for signature.
If a power of attorney is required it does make sense to have it drawn up at the onset of a purchase, but of course it is possible to conclude such an authorisation at any time. The Spanish Consulate will assist too in giving details of solicitors who are authorised to prepare a power of attorney in any country. Signing the document in a Spanish Consulate in the UK is regarded as if it had been signed in Spain.
The end product of a visit to the notario is the escritura. It is a hard backed copy, covered in official stamps, signatures and writing. It is typed on thick, numbered paper. It is an impressive document produced to a standard format. All escrituras start with the date, the name of the notary and the Protocal number which is effectively the filing reference should another copy be required. The escritura is the deed for a property. It is a record of the property at a point in time.
There are three versions of the escritura.
- The Copia Simple (not to be confused with Nota Simple) is a copy of the escritura, less the signatures, which is sufficient to prove ownership. It is available on the day of signing at the notary and is recognised as suitable for most legal purposes. It is normal for the purchaser to hold a copy of this document.
- The Escritura de Compraventa is the main document signed in the notary’s office.
- The Escritura Publica is the Escritura de Compraventa complete with its many official stamps from the Property Resister, which converts it into a public document.
An authorised abogado, or the property owner, or in the case of a mortgage a bank, can hold the escritura, but irrespective of who holds it someone has to collect the finished document from the notary. Thousands of escrituras lie gathering dust in notaries’ offices, uncollected or unregistered because of some minor technicality. In the latter case the property will remain unregistered until the ‘problem’ has been rectified.
The document itself is written in legalised Spanish making literal translation almost impossible. The owner never holds the original deed, but only the first authorised copy. The original is always held at the notary’s office. A second authorised copy can be requested in the event of the first being lost.
No one can doubt the necessity of having a comprehensive document, particularly one which clearly states debts or mortgages, or indeed the transparency of having this document made public. But there is considerable ceremony associated with its preparation and signing which many people believe to be unnecessary. It certainly legalises a situation but it does not alter or undo anything that may have been agreed previously at the contract stage.
Registro de la Propiedad
This is the last piece of paper in the buying cycle. Strangely it is not the Escritura Publica that is the final step, as it is registered with the Property Register being over-stamped Registro de la Propiedad. This simple, one-page document simply closes the loop to the Nota Simple which was considered at the start of the buying cycle. What does all this mean? The Registro de la Propiedad registers the property in a public place, giving details of who has the title, which notary was responsible for the escritura and listing details of mortgages or loans.
Licencia de Obras
Let us assume that a property built to a correct specification requires a small modification such as a dividing wall between an adjacent property and perhaps a shed to hold some tools.
Do you need permission to do this? The answer is yes. In fact permission is usually quite straightforward. A visit to the town hall, the completion of a paper entitled Solicitud de Licencia de Obras, clearly marked minor, and the payment of a small fee, will result in the necessary approval. That is of course provided the modification fits in with the overall urbanisation design, style and specification.
Further information on licences and builders are contained in Chapter 8.
BUYING WITHOUT AN ESCRITURA
There are situations where a property can be purchased without an escritura for perfectly legitimate reasons. However, this is not a permanent situation.
Fast-track conveyancing is one such situation. In some areas of Spain, especially around the southern end of the Costa Blanca, the whole infrastructure is devoted to marketing new property yet to be constructed – buying off plan. Here procedures involving the purchase of new properties have been speeded up. Fast-track conveyancing is different from the standard procedure as time is important and no one wishes to be held up waiting for legal matters to be completed. So the final payment is made direct to the builder, possession taken immediately and the parties to the purchase sort out the paperwork (escritura) at a later date.
A second common situation arises when a nota simple states the property is owned by ‘Heirs of Senor ...’ Or the owners of rural land are brothers and sisters whose family has owned the land for years without a written document. A solution for property with no registered title is to obtain from the Property Registry a ‘negative certificate’ which means the Registry has no recorded owner of the property. The buyer requests the property be registered in their name and the seller justifies their title by any documentary evidence possible. The proceedings are published in case anyone wishes to protest. If not, in one year the escritura is finalised.
A more complex process, involving investigation and court action, is called the Expediente de Dominio, which is used to establish a title when a property is registered, but in the name of a person who no longer claims it, perhaps because the original owner has died. The claim is published and evidence taken to a court for it to rule on ownership.
Yet another reason for buying without an escritura is holding an off plan property on a private contract. In this case a purchaser buys a partly built property on a private contract from a developer and sells it on at a profit before completion, thus avoiding taxes. In a fast moving property market, where properties are bought for investment, they can change hands quickly and are not registered. Investors wait for the next buyer to come along and complete in the normal way. Owning a property on a private contract without an escritura means a property cannot be seized by a court in order to pay a debt, it avoids taxes and conceals an asset from any interested parties.
While conveyancing procedures in some countries have one solicitor representing the buyer and another solicitor representing the seller, it is not necessary in Spain to have two abogados. It is accepted that only one is necessary, as a contract drawn up by an abogado can be assumed to be correct. After all, the final legal safeguard, a notary, is still to come. But here in lies a contradiction!
An agent selling a property normally appoints the abogado. The agent knows the area, who is available and who they have worked with before. The contract may be perfectly legal but it is possible it will contain clauses more favourable to the seller than the buyer. If an abogado is dealing with hundreds of contracts on behalf of a builder or agent, where will their loyalties lie?
Conversely a person buying a property may be new to the district, probably does not know an abogado and can easily go along with this arrangement. But who pays the bill? The buyer. So it is wise for a buyer rather than the agent to appoint the abogado who draws up the contract. If that is not practicable then a buyer should take additional independent legal advice from another abogado prior to signing the contract. So we are back to having two lawyers!
The importance of legal advice
It cannot be emphasised too strongly that anyone planning to buy a property in Spain should take legal advice in a language in which they are fluent, from a lawyer experienced in Spanish property law. Always deal with professionals and do not assume that by dealing with a fellow countryman the advice is better, cheaper or even unbiased. Consult an abogado to check draft documents. Does the person have the right to sell? Have all the permissions been granted? Are there any debts? Is the Contract in order or does it contain non-standard clauses? What are the payment schedules? Do penalty clauses exist for a builder failing to complete a new property on time?
Problems associated with purchasing a property abroad have been highlighted many times in the popular press. From a legal viewpoint Spain has not always been the safest place to buy. Most horror stories come at the start of the buying process. It is at the contract and deposit stage that things go wrong, where insufficient checks have been made, or inadequate procedures followed. Among the myriad of problems experienced by buyers in Spain the most prominent are:
- unscrupulous agents;
- people absconding with the deposit;
- properties bought without legal title;
- issues surrounding developers and builders, such as lack of planning permission or bankruptcy;
- undischarged loans or mortgage from the previous owner;
- off plan properties not being completed on time;
- an altered property bearing no resemblance to that described in the escritura.
Do not sign anything, or pay a deposit, until legal advice has been sought. Once the advice is given – take it. Do not assume it is someone dotting the I’s and crossing the T’s. One of the most common phrases heard in Spain is about buyers ‘leaving their brains behind at the airport’. It is true! The rush to buy a dream home, or a pressurised selling trip, or even the euphoria of a moment often make people do incredibly stupid things, literally handing over cash deposits to agents or owners with little or no security.
Harry King, Buying a Property in Spain. Oxford: How to Books, endorsed by the Daily Telegraph.
Rider, Holtom and Howell, Buying a Property in Spain. London: Cadogan Guides, endorsed by the Sunday Times.
David Hampshire, Buying a Home in Spain. London: Survival Guides.