The aim of this section is to explain the various terms for documents etc used in the purchase of a property. There are many papers involved in a house purchase and the Spanish are masterful bureaucrats.
Everything has its paper and most things have three papers. While we hope this will help you to understand the papers and the course they take it is in no way intended to replace the services of a good solicitor. Many documents are open to interpretation and tell a story in the greater picture but to rely on them individually can lead you into troubled waters.
COMPRA VENTA - This is a document you sign to say that you are interested in buying a property and it is usually accompanied by a small holding deposit maybe around 2,000 euros. This payment is only to keep the property until the Private Contract can be drawn up and signed.
SEÑAL - Another name for the document and also for the deposit paid.
NIE - This is a national identification number. You can obtain an NIE through your solicitor or direct from the appropriate Police Office. They are also available on line. You will require your passport and a copy of the photo and data page. An NIE number is yours for life and you will be asked for it when buying a car or house, when making an electricity, water or gas connection and for some purchases.
NOTA SIMPLE - This is a short informative note obtained from the Property Register (Registro de la Propiedad) which gives the name of the owner and details about the property, including the current owners names, the square meters of the property for both the dwelling and the land, the boundaries, a classification, whether it is rustic land or urbanized or if it can be urbanized in the future, what rights other people may have public footpaths, communal pipes etc and finally if there are any debts against the property. Debts shown on the nota simple can be for unpaid taxes, mortgage arrears or fines.
PODER - this is a power of attorney which can be made by you so you do not have to be present in Spain to sign the various documents. It can be in the name of a relative, friend or representative for instance your solicitor. A Poder can be used for buying a house, selling a house, opening a bank account, transferring money, singing for a mortgage. This is a powerful document and you should only give this power to someone you trust to carry out their duties in your best interests.
PRIVATE CONTRACT - this is a formal agreement where the details of the sale are laid out. It will also show the terms of the sale, the price and the (arras), which is when the buyer pays a larger deposit for the house. A normal deposit would be 10% of the house sale price but it is negotiable and can be up to 20%. If he fails to buy the house then the seller keeps his money. However, if the seller finds another buyer the purchaser is entitled to have his deposit returned at double the amount paid.
HIPOTECA - the mortgage. When negotiating a mortgage with a bank remember that in Spain all things are negotiable. There is normally an opening percentage for you to pay, a closing percentage if you decide to pay off the loan before the natural end of the loan period and a percentage if you decide to vary the mortgage i.e. pay off part of the loan. Make sure you haggle for the best rates on these. A mortgage can be a variable or fixed rate and again you need to haggle. The amount you pay per month is normally a percentage over the EURIBOR (The Euro Interbank Offered Rate).
TASACION - The Tasador (Surveyor) comes to the house and does a survey. This is normally arranged by a bank to establish a value for the property. A survey in Spain is not the same as a survey in the UK. The surveyor will not make a full structural survey of the house. His only aim is to put a value on the property. If you want a full structural survey then you will need to ask for this and pay for it. This can be expensive so always ask for a price before you commit yourself.
ESCRITURAS - these are the title deeds. However in Spain they generally are not the large tome of paper we are used to seeing in the UK and rather than the solicitors keeping them they are returned to you with an account showing what your expenses were for the purchase of the house. It is vital that you keep your Escrituras safe and in good order as you will undoubtedly need them in the future.
NOTARIO - The Notary is basically a public witness. They are responsible for drawing up the deeds (Escrituras) and for the tax due to the Registro Catastral and for having the names of the new house owners inscripted in the Registro de la Propiedad. They charge fees to both the purchaser and seller according to a scale set by the government. Their function is not to safeguard you against a bad buy, that is the responsibility of your solicitor.
SEGUN LEY - is a term you may hear at the Notary. It means according to the law. This term applies to the division of expenses for the sale of a property. There are certain expenses which are normally paid by either the seller or the buyer. As with most things these can be negotiated but generally they are dealt with segun ley (according to the law).
LIBRE DE CARGAS - you my also hear this term at the Notary office it means free of charges. This means that there are no debts on the property. These Cargas would show up on the Nota Simple. Unpaid cargas can be levied against a house by the council for unpaid community charges or local taxes or for things like unpaid mortgage arrears.
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