When buying an apartment, a house, a garage, a local, land, or any other property in Spain, you may need to sign a purchase private contract prior to grant the public sell purchase deed before a notary.
If this is the first time that you have faced such a process, you probably have many doubts, and you want to make sure you understand well how this document should be, in order to avoid problems and perform the operation safely.
For this reason, from VBB Abogados, we want to help you solve your doubts and queries, providing you with information about the private property sale contract below.
What does the contract for the sale of a property consist of?
The sales contract is a private document, which establishes the rights and obligations of the parties involved in the transaction. It is highly recommended to formalize it in writing. It is characterized as that by which the seller is bound to transfer the property to the purchaser, and the buyer to pay a certain price for it agreed with the seller.
It is common for a deposit contract to be signed in advance, which serves as a reservation or pre-contract for the sale of the property, and involves the payment of a certain amount of money and the settlement of the essential conditions of the sale-purchase.
Returning to the property purchase contract, it must compulsorily include a number of clauses relate below.
Essential aspects of the real estate sale contract
In the first place, it is necessary to include a detailed description of the object of sale, as well as its location, registration data and its cadastral reference, adequately reflected in said contract.
Prior to the signing of the contract of sale, a due diligence must check that the property is free of liens or encumbrances, as well as current in tax payments (such as IBI), and other expenses that apply (such as the community of owners), and such information must be clearly reflected in the contract.
The data of the buyer and the seller are another essential aspect that must be reflected, detailing the full name of each party and their address, as well as their marital status and, where appropriate, matrimonial property regime. In addition, the seller must attach all the possible information that allows proving his ownership and ability to sell the property.
It will also be necessary to establish that date when the seller will handle the possession of the property to the buyer, as well as the corresponding penalty for non-compliance with this point, along with the rest of the possible penalties for both the seller and the buyer in case of breach of contract.
On the other hand, other essential data to include are: price agreed for the purchase, means of payment (for example, bank check, transfer) and indicate how the expenses generated in the sale of the property are distributed between the parties.
If there are charges, its cancellation must be agreed and who must bear the costs of the same (normally the selling party).
Obligations of the parties involved
In summary, the seller must comply with the delivery of the property within the term and conditions stipulated in the contract, and keep said property in perfect condition until its delivery, as well as repair the hidden defects that the property may contain, and cancel the charges that may weigh on it.
The seller must also deliver to the new owner the documents that the house needs to have in order for its occupation, such as the Certificate of Energy Efficiency or the Certificate of Habitability, or the Technical Report of the Building (for example in Catalonia for buildings with an antiquity of 45 years).
For its part, the buyer is obliged to pay the price agreed for the property, and under the established terms, as well as to receive possession of the property.
Purchase contract and the Property Registry
For legal purposes, the private sales contract is a valid and fully effective document between the parties involved. However, it is absolutely recommended in all the cases to register the acquisition in the Property Register to have complete legal security about your purchase. To obtain this inscription it is necessary that, after signing the private contract, it is made public before a notary public by a public deed.
The Notary will recheck certain aspects, such as charges or the situation of the property in the registry. Also, it will be reflected how the costs of the operation are distributed between buyer and seller.
To summarize, expenses of the public deed corresponding to the buyer are: notary fees, derivatives registration and the transfer tax property or the payment of Value Added Tax (VAT) if it is a first transmission of housing (of new construction). The Municipal Capital Gains Tax corresponds to the seller. You must be aware of the consequences of signing a property sale contract, including taxes, hence the importance of understanding and reviewing the document perfectly.
The most advisable thing is that when buying or selling a home, you go to an expert lawyer in real estate law, who will help you throughout the process and who knows how to advise you on the property purchase contract.
In fact, more and more people are hiring the services of a real estate lawyer, in order to ensure the success of their sale and purchase operations. And, specifically, it is very common for foreigners, when faced with their intention to acquire a property in Spain, to request the services of lawyers who are knowledgeable about Spanish real estate law.
This is the expertise of VBB Abogados: advising on the investment or acquisition of real estate to national or foreign clients, and we also take care of managing all the necessary procedures to obtain visas and residence authorizations.
If needed, please contact with our team of professionals, and we will assist you with your purchase process. And for more information, visit our law blog , where you will find more articles about the buying and selling process.