In general, a real estate purchase contract in Spain does not have a legally binding form. In Germany, a purchase contract for a property, a plot of land or an apartment must be drawn up and notarized by a notary public. This is not the case in Spain. As a result, private real estate purchase contracts are concluded so that buyers secure a property first.
A so-called preliminary contract on a real estate purchase in Spain (contrato de arras) is therefore not uncommon, but often leads to disputes if neither liability nor obligations are recorded. Until the notarization, which becomes necessary for the land register entry, both contracting parties can withdraw from the preliminary contract with some consequences.
Even verbally, a real estate purchase contract in Spain can be concluded. In this article we take a closer look at the real estate purchase contract in Spain.
What does private real estate purchase contract mean in Spain?
Spanish law does not require real estate buyers and sellers to enter into a real estate purchase agreement in Spain that must be notarized beforehand. A private real estate purchase contract in Spain or even the verbal agreement is sufficient for the "purchase". This becomes effective by the fact that both parties agree with the contract conditions such as purchase price and object. Usually a written documentation follows, which is legally binding and is accompanied by a down payment after closing. This amounts to approx. 10% of the sales price, which can be retained by the seller in the event of withdrawal due to failure to sign the notarized purchase contract in due time and if new contractual conditions are included in the "real" real estate purchase contract in Spain.
Because such a real estate purchase agreement in Spain not infrequently leads to legal disputes, it is therefore important not to sign them without the assistance of a lawyer, especially since even the notary only subjects the real estate purchase agreement in Spain to marginal scrutiny when it is notarized.
Attention for German contracting parties: Even if the "model purchase agreement" of a property in Spain
legally binding, this does not have to be the case in principle. If, as a German citizen, you buy a property from a seller in Germany who is also a German citizen, a private purchase contract can be declared null and void. This is the case if the court applies German purchase law, as the notarial form must always be observed here.
What provisions must be made in a preliminary contract of the purchase of real estate in Spain?
In a preliminary contract for the purchase of real estate in Spain, some important regulations between seller and buyer should be recorded. Basically, these include the subject of the contract, i.e. the property, the contracting parties, the monetary value, the conditions and the precisely defined time of handover. At the same time, the down payment (usually 10% of the purchase price) is collected, which is usually paid directly to the seller. If this is not paid directly to the seller, this must also be stated in the preliminary contract. Cash payment is to be avoided here.
In any case, a sample purchase contract for a property in Spain should include a date for the signing of the notarized purchase contract. Through the private real estate purchase contract in Spain, depending on how it is formulated, the buyer is obliged to meet the deadline, as failure to do so may result in the loss of the entire deposit. Also a penalty with an increase of the down payment is possible. It is therefore important to pay attention to the right of withdrawal as well as definitions that do not necessarily result in the loss of the deposit even if the deadline is missed.
The notarial real estate purchase contract in Spain
A notarized purchase contract ("escritura pública de compra venta") is mandatory for the entry in the Spanish land register ("registro de la propriedad"). The private written contract of sale, which was carefully drawn up in cooperation with a lawyer, serves as the basis. After both parties have had the real estate purchase contract in Spain notarized by the notary, they receive several copies of the deed (copia simple), which make the land register entry possible.
Our tip: Should it come to the notarial certification that the seller, despite invitation, does not keep the appointment in time, but the buyer does, a certificate should be provided by the notary about the presence and payment of the remaining price.
Why have a private real estate purchase contract in Spain reviewed by a lawyer?
With the legal examination of the real estate purchase contract in Spain you play it safe and avoid disputes and consequential costs in case of emergency. It is not only about securing the purchase, but also about making the right decisions in the purchase phase. The latter thus represents an advisory authority for the client and supports him with further possibilities and options. In any case, the examination of the property on the basis of the excerpt from the land register is part of the process. Questions such as security of ownership, freedom from encumbrances, tax levies or compliance with statutory provisions during construction must be clarified. It should also be ascertained whether building extensions or conversions are possible subject to the legal regulations and, if the objective is to purchase, whether a vacation rental permit is available. The lawyer should also consider resale options.
In the case of the real estate purchase contract in Spain, a lawyer assists the buyer in practice in the review of the private purchase contract or takes over the drafting, prepares the notarial purchase contract and selects a notary, ensures the timely retention of the date and handles all processes until finally the real estate purchase has been transferred to the land register.
At Neptunus International Real Estate we have an extensive network of partners and work with professional lawyers and notaries in the case of a real estate purchase contract in Spain. With us you can be sure of quality support in any real estate purchase and you can look forward to your dream property without worries from the very beginning. If you have any questions or suggestions, please feel free to contact us at any time.