Legal formalities concerning the purchase of property in Spain

There are also steps you can take which are legally recognised and binding but are not mandatory. The following list explains some of the usual steps that are followed.

Pre-agreement | Promesa de Compraventa

A simple agreement between buyer and seller that does not involve any deposit and is not mandatory. It is not a sales contract, but a commitment by one or both parties to buy or to sell. This contract is rarely used but is possible.

Deposit Agreement | Contrato de Arras

A simple contract that involves a deposit paid by the buyer to the seller. The contract can specify, and it is strongly recommended that it does, that if the buyer withdraws from the transaction the deposit is lost, and if the seller withdraws from the transaction double the deposit has to be returned to the buyer. This agreement is not mandatory but is very common.

Option To Buy Agreement | Contrato de Opcion de Compra

This type of agreement gives the buyer the exclusive right to buy a property within an agreed time frame. The option does not have to be exercised, but it is usually agreed that if the option is not exercised the buyer loses the money paid for the option.

Private Sales Contract | Contrato Privado de Compraventa

A contract that specifies, in as much detail as possible (price, dates, contents, etc.), the terms under which the transaction will take place. Several scenarios can be foreseen in private sale contracts. For instance the payment of an initial deposit of 10% of the price at the moment of signing of the private sale contract, and payment of the remainder at the moment of signing the public deed of sale. In this scenario, the parties may agree that the deposit of 10% is lost if the buyer fails to grant the public deed. This contract should specify when the public granting of deeds – known as Escritura – will take place. This contract is common but not mandatory.

Public Deed of Sale | Escritura Publica de Compraventa

The Escritura de Compraventa is a mandatory contract if the sale is to be registered publicly in the land registry. By law, this document must be authorised by a Spanish Notary (Notario) and must also be signed by the buyer and seller (or their representatives with power of attorney) in front of the Notary. The Notary guarantees, by virtue of his public office, the legality of the transaction, and explains to both parties the terms of the transaction. At this moment the full price or any remaining payments (should any exist) on the purchase price are made. Effectively this is the moment when the new owner takes possession of the property.

This act, know in Spanish as the Escritura Publica results in the Escritura Publica de Compraventa, or title deeds, which state who the new owners of the property are. It is impossible to inscribe property in the land registry without the Escritura Publica de Compraventa, and inscription with the land registry is the most secure form of ownership.

Certain documents should be provided by the seller, at the very latest, at the time of the Escritura. The precise documents required vary case by case, and your lawyer will be able to advise you on the documents required in your case. However, documents could include, amongst others:

Original title deeds
Proof of payment of the most recent local property tax (IBI)
Proof of up to date payment of utilities
Certificate from the administrator of the community of owners showing that payments are up to date

The title deeds to the property will be in Spanish. Always have a legal representative with you to confirm that the final deeds you sign are what you are expecting to sign, and be sure to check the details of the property and the names of the parties just before you sign. Your lawyer will need to be there with you to confirm, in your own language, what you are signing.

After signing the Notary will give the buyer both original title deeds and simple copies of the deeds. These documents are required to pay the appropriate taxes and for inscription in the land registry. Your lawyer should help you carry out these formalities.

Registering the property

Your lawyer should help you to register your new property with the land registry IMMEDIATELY after the Escritura. Once you have submitted the Escritura for registration, it may take 1 – 2 months for the process to be completed. Your lawyer should also register you as the new owner of the property with the Catastro which is the local government’s registry of property and owners. This will ensure that you receive all correspondence relating to the local property tax.

Other formalities

In some special cases, such as residents of tax havens purchasing property in Spain, or non-residents buying property for more than 3,005,061 Euros, there a number of other legal formalities to comply with.

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