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Purchase a Property in Spain

Purchase a Property in Spain

3. The Contrato de Compraventa (Contract for Purchase and Sale)

The contrato de compraventa is a legally binding private contract which sets out the parties to it, the description of the property and what is included and excluded, and the conditions of the transaction - price, deposit, balance and how this is to be paid, date of the sale, warranties, who pays the costs and taxes etc.

The contrato de compraventa is only valid if it is signed by both , vendor and purchaser. Other parties, such as the vendor's estate agent, can only sign it if they have a notarised power of attorney (poder).

The private contract is very useful as it largely eliminates the problem experienced in the UK of “gazumping”, especially if there is some time between the signing of this contract and the eventual completion date.

But if the buyer has the full purchase monies available, is sure there are no legal problems, and both parties wish to complete immediately, it is possible to go directly to a notary and ask him to make an escritura de compraventa, which is the public document that is registered at the property Register, to recognise the owner’s legal rights of ownership.

The contrato de compraventa is a private contract effecting a valid sale of the property to the buyer, which is valid between the parties to it, and obliges them to fulfil the terms contained in it. However as a private contract it cannot be inscribed in the Property Register and may not be accepted by third parties as proof of ownership of the property. As well as protecting the new owner against the registration of prior charges, an inscription in the Register is advisable to prove ownership and conformity with the rules (such as payment of the transaction taxes), and for example, without a Nota Simple (an extract of the Register entry) it is not possible to obtain a mortgage.

To register the property it is necessary to convert this private contract into a public deed: this is done by the Escritura Notarial (notarial act) usually called the escritura de compraventa (deed of conveyance) (more on the escritura de compraventa in the next section), which - to be valid - must be signed by both the vendor and the buyer in the presence of the Spanish notary when it becomes an escritura publica (public deed).

 

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