Can you buy a home without first signing a deposit agreement?
Yes, it is possible to go directly to the signature of the final purchase before the Notary, although, the usual thing is to sign a previous contract, which is the so-called “deposit contract” (or “Contrato de arras”) that serves to give payment on account or signal to the seller for the purchase-sale commitment.
It is a very important contract, and it is necessary to leave “well tied” all the steps that will happen later, to avoid problems.
What are the types of deposit/arras contracts that exist?
There are two types:
Confirmatory deposits, which are delivered on account of the price of the sale, that is, as a sign of conclusion, and in case of breach of the seller can be required to fulfill the contract and forced to grant the purchase deed.
And, penitential, that must always be agreed expressly, and that allows the buyer and the seller to desist (back out) from the contract. In the first case, the buyer would lose the quantities delivered and if the buyer desists, the seller would be obliged to return them duplicated.
What happens if I sign the deposit contract, pay the corresponding percentage, and then I back out and I do not want to buy the apartment anymore?
You would lose the amounts delivered to the seller.
Unless it is expressly agreed in the contract that the buyer expects to obtain a mortgage and justifies that the Bank has not granted it. In this case, the buyer could withdraw from the contract and recover the amounts delivered, provided there was no negligence of the buyer, for example, when submitting the documentation in the Bank.
What kind of documentation do I need to sign a contract?
The seller has the “duty of information” and is obliged to provide the buyer with all the documentation of the property.
The documentation to be provided by the seller depends on whether it is a new build or a used/second-hand dwelling.
In both cases: certificate of habitability, energy efficiency certificate, the note of the property registry updated (to check if the farm has loads, mortgages or encumbrances), certificate of being up-to-date with the payment of expenses of the community of owners, last receipts of local taxes.
In the cases of houses built longer than 45 years ago: certificate of aptitude and technical inspection report of the building.
And in the case of new construction houses: bank guarantee of all amounts received on account of future buyers, housing plan, the memory of qualities, housing guarantees (ten-year insurance), building book, necessary documentation to contract the housing supplies, and the statutes of the community of owners.
It is important to be well informed about the charges that affect the property that are registered in the Property Registry and how to cancel them: Current mortgages, judicial liens, rights of first refusal, easements, or in the case of officially protected housing the limitations of disposition entailed to this type of dwelling.
Also, inquire about the cadastral description (if the cadastre and registration match) and the urban planning effects that may apply to the area.
At the time of signing the deposit agreement, do I already have to have the mortgage applied for?What it is done first?
It is highly recommended at least to have already confirmed with a bank that the economic situation of the buyer will allow obtaining financing for the amount that is needed.
What facilities exist for the buyer at the time of signing the contract? Are there negotiable clauses, or the conditions are set by the seller?
There are clauses in the purchase agreement that are non-negotiable and that are stated by law, such as those relating to the vendor providing the habitability certificate of the dwelling and the energy efficiency certificate, or that the expenses of granting the deed of purchase and registration in the Property Registry correspond to the buyer and the municipal gain tax to the seller.
Regarding the price, a form of payment, terms of the deed, delivery of possession, repairs to be made in the property, if furniture or appliances are included, … can be negotiated freely between the parties. Although in cities or areas of the same with high demand, it will depend on the market situation, the possibility of negotiating the price downward.
Why is the lawyer’s role important at the time of buying a flat?
When dealing with the purchase of a home it can be the most important investment that you will normally make in your life, you must not sign standard contracts and have them reviewed by a lawyer to ensure that they adapt to the specific circumstances of the case and the needs of each buyer and seller.
BOLTAS BOYE Abogados has extensive experience in advising in the real estate sector.