PRE-PURCHASE CHECKS

An architect’s drawing

It makes sense to have a plan of a house, particularly for a relatively new property or one bought off plan (not yet built). What is required is neither a glossy brochure, nor a three-dimensional sketch or artist’s impression, but an architect’s plan showing the dimensions of each floor and each room in square metres. With new properties this is a legal requirement with the living space in each room, the total build area and plot size all specified. The overall size of the property, again measured in square metres, determines its market price, its valuation for any mortgage, insurance premiums and an assessment for local taxes.

Plan parcial

It also makes sense, when buying land or a new property yet to be built, to have a line drawing locating the plot. This is called plan parcial, a Spanish term meaning a plan of parcels or plots of land, which is registered with the planning department at the local town hall. It ensures land or property for sale is approved and registered with the town hall and also shows other adjacent developments or roads planned close by. While a line drawing supplied by the builder’s architect will suffice on most occasions, a plan parcial from the Urbanismo Department at the Ayuntamiento (town hall) is the only approved legal source. Prospective purchasers should also be aware of developments close to the sea which need to be approved by the Jefatura de Costas as well as the town hall. Spain’s 1988 Ley de Costas, or Law of Coasts, empowers the authorities to restrict building and to control height and density within 100 metres of the high-water mark.

Nota Simple

This very important document is often overlooked. Translated it means a ‘simple note’ which is issued by the Land Registry Office and is a copy of the Property Registration details (see Registro de la Propiedad later in this chapter). For a property yet to be constructed, it is proof that the person selling is the registered owner of the land and that there are no debts on the land. For an existing property it shows details of the present owner, if the property has an outstanding mortgage or loan, or if it has any debts registered against it.

Obtaining a copy of the Nota Simple is straightforward. Firstly locate the Registry Office with jurisdiction over the property or land. This is not always in the nearest town or village. Secondly complete a request for information form and pay a small fee, then return in a few days to collect the Nota Simple.

Establishing the right to sell

While the Nota Simple will give ownership details of an existing title, it makes sense that further documents are requested to establish the person selling has the right to do so. Details in the escritura, passport or residencia number and Certificado de Empadronamiento should all agree with the facts in the Nota Simple. If not there is something wrong. An examination of property dimensions recorded in the escritura should also be the same as the actual property – if not an illegal alteration has taken place.

Quota of community charges

Buying a property in Spain, particularly on an urbanisation or in an apartment block, invariably means becoming a member of a community of property owners. A country property or a town house in a street will not have to deal with community issues.

It is advisable to at least understand approximate community costs involved prior to signing a contract, but in most situations this would not materialistically affect a buying decision. Indeed, with a very new project an overall community budget will not have been determined. Conversely with an established community the costs, constitution, chairman and committee members will all be established.

The allocation of costs will vary. On an urbanisation of 1,000 homes of equal size, each will carry a charge of 0.1 per cent of total expenditure. If however the urbanisation had 500 large and 500 small homes the allocation could be 0.125 per cent and 0.075 per cent respectively. This allocation of costs, called a quota and expressed as a percentage of total community costs, is determined at a very early stage in any new development. The information should be available upon signing a contract.

Debts

Spain’s laws carry any debt on a property over to the new owner. Prior to signing the contract a check has to be made to ensure there are no encumbrances such as mortgages, or outstanding debts such as local taxes and community charges, and all service bills have been paid in full. A mortgage or loan is repaid at the notary. The following is a process for checking this:

• A copy of the Nota Simple will tell if there are any mortgages or loans against the property. A seller is not trusted to pay off a mortgage of their own accord, so it must be paid at the time of signing the escritura.
• Enquire at the town hall to check any unpaid local taxes, Impuesto Sobre Bienes Inmuebles (IBI).
• Enquire through the Community of Owners, or their management company, to ascertain all community charges have been paid.
• Check receipts provided by the seller that all bills for electricity, water and telephone have been paid.

A first time buyer probably does not have time or local knowledge to carry out these checks. An agent should do this, but often does not. A notary will carry out some of these checks. An abogado will do a fine job as their professional reputation is at risk. But a bank manager issuing a mortgage will do it even better since the bank’s money is at risk. Remember, all unpaid debts on a property are inherited by the buyer.

Impuesto Sobre Bienes Inmuebles (IBI) and valor catastral

An IBI receipt is not available for a new property, but is available from the town hall for a resale property. The IBI receipt will show the property’s catastral reference number and the valor catastral, the official assessed value used in calculating IBI. The assessed value is usually substantially less than the real market value.

The Catastro is a second system of property registration, defining the location, physical description and boundaries of a property which unlike the Property Registry concentrates on ownership and title. Both systems should of course agree. What is in the escritura should be in the Castrol Certificate. Sometimes the boundaries of a property, or even the property itself, can differ because people have accepted descriptions made in one document but not in the other.

Although the Certificate comes in two parts, one is a description in words and the other a plan or photo; this can be bypassed by a clerk at the efficient SUMA offices (where they exist) demonstrating relevant details on a computer, avoiding the inevitable form filling, cost and delay.