Buying a property anywhere in the world always entails a degree of risk that what you actually buy isn’t what you expected.
This can be hidden problems with the building, but typically the bigger worry when buying abroad is to ensure that you fully own the property, that no-one else (governments included) has any unexpected rights over it, and that no unexpected financial liabilities come with it.
The property purchase process itself is fairly simple:
- Find then view the property that you want to make an offer on.
- Perform a series of checks on the property, the first of these giving you the information you need to haggle and agree a price.
- Sign a purchase contract and pay a deposit. The purchase contract will normally stipulate a date to complete by and also that if the seller pulls out they must refund the purchaser twice the deposit, and if the buyer pulls out they lose their deposit. The deposit is normally paid directly to the seller, but for heavily mortgaged properties this may not be advisable – see check 3 below.
- The notary prepares all the paperwork and makes necessary legal checks.
- All interested parties (buyer, seller, banks with mortgages on the property, etc.) meet in front of the notary and complete the sale.
- Registro records are updated, purchase taxes paid, and new title deeds given to the new owner.
The checks, of course, are the complicated part.
Fortunately, in Galicia the law provides good protection for property ownership and information is readily available to perform all the checks needed to give complete peace of mind for at least the legal aspects of a property purchase.
The rest of this section details what these checks are and how they are done. Using this page you may well be able to check a lot of information about properties of interest for yourself, but this is also a good place to put in a quick reminder about Galiciaproperty’s very economical search service and purchase assist service.
To provide an example of many of these checks, here is a real life case study.
The time to think about these checks is once you’ve found a property you are potentially seriously interested in but before you start to negotiate price and definitely before you sign a purchase contract and pay any deposit.
As these checks do take time and also require a catastro reference (which you can find out if you have an exact location, but it can be easier just to get it from the agent) you should at least know where the property is and ideally should have seen it or had someone see it on your behalf.
The checks are:
Check the catastro for obvious problems
The catastro is Spain’s register of properties and tells you the size and zoning of the plot and the size and designated use of all buildings on it.
The plot should have an “urbano” classificacion and the actual building should, in theory, match what is listed in the catastro. I say “in theory” because in rural Galicia virtually all properties exceed the catastro details in some way, typically by additional outbuildings and buildings or parts of buildings that have designated use recorded as garages or sheds but are actually living accommodation.
As this mismatch is so widespread the generally accepted school of thought is that if your property more or less matches what is in the catastro (ie. up to 50% bigger) you’re fine …but of course not everyone (for example, Germans) can sit comfortably with this and so it’s worth noting that most bits of unregistered building or change of use can be retrospectively legalised without any significant penalties (more about all of that later on).
So, to find the catastro record for the property:
- Go to the catastro website
- Click on “Ciudadanos, empresas y professionales -> Consulta de cartografia…”
- If you have a catastro reference number (from the agent) enter it and select “Cartografia”.
- If not you will have to find the property on the map by entering as many address details as possible, clicking on “Cartografia” and then zooming the horrible map interface in until you can make out the plot of the property you are interested in.
- Either way, when you find it, select the “i” (information) icon and click on it the plot. A little popup should appear with a long number in it – click on this.
- You should now see the catastro detail page for the property.
Now that you have this information you basically need to look for mismatches between what is recorded and what is actually there as follows:
- Confirm that the “uso” is “residencial” (assuming you’re buying a house).
- Confirm that the plot of land shown and its size matches the advertisement. If the advertisement describes a bigger plot of land it may be that a neighbouring plot of different category (normally pasture) land comes with the house, but this (and which neighbouring plots) should be confirmed with the agent.
- Where you will find the discrepancies is most often in “Elementos construidos” section. This section lists how many buildings there are on the plot, how many floors each building has, how big they are in square metres (note that in Spain the external walls are included in the measurements), and what the designated use (vivienda = living accommodation, garaje = garage, almacen = shed/storage) of each part of each building is.
Make a note of any discrepancies you find and also of the “referencia catastral”.
You may also want to browse the map in this tool with the “orthofotos” layer turned on – these are the best quality aerial photos of Galicia. And the page also gives you some very useful distance and area measuring tools.
Check the local council development plans
Most agents don’t seem to do this, but as you can see in this real life case study it’s a worthwhile check.
Every Concello (local council) is required to maintain a town plan. Many of these are massively out of date and some are more or less works of fiction, but they do, nonetheless, tell you what the development plans for the locality are, and it’s worth checking to see if there is anything in the local plan for the property you are looking at that might affect it such as new roads or large building projects nearby.
- Go to the Xunta de Galicia’s planeamiento urbanistico website
- Click on “planeamiento municipal”
- Select the relevant local concello from the list. If you don’t know which concello the property is in use the “visor cartografico” to find out.
- When the documents for the selected concello come up, select “planeamiento general”, and from under this click on the folder icon by “Plan Xeral de Ordenacion municipal” (this Plan should be there, but some concellos, probably very remote ones, may not have one).
- You can also see from the date of this plan how recent it is. In theory plans should be a maximum of 10 years old, but in practice I’ve seen 20+ year old plans still there.
- The various “Ordenacion” documents will be the maps of the various parroquias (parishes) and aldeas (villages) under the Concello. Select the appropriate one for the property you want to look at, locate the property on the map, and then look around it to see if there’s anything in the development plan which isn’t currently there and which might affect the property.
A side benefit of this tool is that these plans are made on top of high quality topographic maps, which can be an interesting thing to take a copy of for local walking, etc..
Check the Registro (and concello) details of the property
You might imagine that there would just be one place where details of a property are registered …but this would be northern European thinking!
In fact, whilst the catastro lists the sizes and designated uses of buildings all further details about them are registered in two largely separate systems.
When any modifications or additions to the building are made the permission for this must be sought from the local concello. The ever increasing plethora of planning restrictions for major building works is complied with by submitting an architect or architectural technician (depending on the scale and nature of the works) stamped “proyecto” to the concello.
Approved plans, confirmation that the 4% property improvement tax for restoration work or the relevant taxes for a new build have been paid, and certificates of completion / habitation (necessary for services connection) are stored in the concello.
Normally it is not necessary to reference these, but if the property has been denounced or for various other issues such as retrospective legalisation of unauthorised building it may be necessary to look at these for some fine detail.
Whilst the concello holds the detail of changes made to the property, the place where completed changes and also all information about the internal layout and condition of the property is held is the local Registro office.
The other vital information recorded here is all charges against the property, which is any legal right anyone else has over it. Charges against a property are typically mortgages guaranteed on the property, access rights held by other individuals, and sometimes rights held by one or more of the many other administrative bodies that are out there such as the railways authority, fishing rights authority, etcetera, etcetera.
It is vitally important to know what information the Registro holds for the property, and you can find this out from two documents.
The Nota Simple
Registro information is publically available and so for a small charge anyone can go to a property’s local Registro and request (for an admin charge of around 5€) a copy of a document called a Nota Simple. Normally, however, the agent will, if requested, give you a copy of this document when you first view the property.
The Nota Simple will normally match the catastro for the simple reason that this is where the data about the property size and use is taken from, not the Escritura which is held in the same Registro office. This should always be confirmed though.
Mainly you want to confirm from the Nota Simple that the sellers are in fact the legal owners of the building (if the sellers have inherited it from the listed owner this can be very complex due to Spain’s law of forced hereditary heirs) and that there are no rights held over the property that you haven’t been informed about by the agent.
Finally, it is worth noting that large mortgages on the property are something of a concern because in theory you could pay a deposit to buy the property, which in Spain is always paid direct to the sellers (they don’t seem to use escrow, which would be much safer), and before you were able to complete the purchase the bank with the mortgage might repossess the property, and in that case although you would have the right under law to try to reclaim your deposit from the proceeds of the bank’s sale of the house, you would come after them in the queue, so to speak.
No-one else in Galicia seems to share this concern, but I regard it as valid and would advise clients not to pay any deposit direct to a seller whose property is heavily mortgaged. Instead consider making an arrangement with the bank that holds the mortgage to hold the deposit in an account which has a private contract controlling who can withdraw the funds and under what circumstances.
The Registro holds more information about the property in a document called the Escritura, which is the deed to the property. This deed is amended (in front of a notary) following the completion of any (authorised) major building works.
Since, however, this document contains information such as the price the purchaser paid for the property (or at least what they declared they paid!) this is often not a document you are able to see prior to completing the purchase without giving a good reason.
That said, implying that you have a good reason to ask to see it can often persuade agents, who will normally have a copy of it, to show it to you even if they won’t give you your own copy.
If you can see it it’s worth doing as, again, what you are looking for is any discrepancy between the actual building and what the documentation says has permission to be there.
If you do find differences you don’t need to be unduly alarmed. In fact the vast majority of rural and even a lot of urban properties are detailed differently in the Nota Simple/Catastro and the Escritura. The normal difference is that outbuildings or extensions aren’t listed in the Escritura. If, however, they have permissions (or are provably old enough not to need them) and are listed in the Catastro and therefore have been included when calculating IBI this is so much the norm that it’s hard to see it ever becoming a serious issue.
If, however, you find more significant differences or parts of the property that are not listed in either the Escritura or the catastro then you need to investigate further and factor into any offer that to be comfortably legal some retrospective permissions may be required.
Check if other authorities are involved
As mentioned above, in Galicia there are various other authorities besides those mentioned above.
These authorities normally operate at the autonomous community (ie. Galicia) level rather than locally like the concello. Whilst occasionally you may find one referenced in a Nota Simple charge, you also need to be aware of whether you fall under their jurisdiction, especially if you are considering making major changes to the property.
If you are looking at a property near the coast, and by near I mean within 100 metres of the official demarcation of the coastline, then you need to find out whether any Costas laws affect the property.
Coastal development is, mainly as a result of building pressure in the south and east of Spain, now heavily regulated. New building within 100 metres of the coastline is no longer permitted, and existing buildings inside this limit need to be checked for legality at the Costas level as well as the above checks.
Costas laws (there have been quite a few) are fairly clearly defined and properties within this 100 metre zone are typically legal if built before 1981 and connected to mains water and electricity services.
If, however, you are looking at a property this close to the coast it is likely to be an expensive purchase and it is advisable to check out its situation as regards Costas law thoroughly using a specialist lawyer.
In addition to Costas there are many other smaller and normally less draconian authorities such as those for rivers (on a par with Costas these days), for railways, roads, and so on. Each has defined zones of interest that may include residential properties, and if any reference to one of these authorities is seen in any documents, or if the property is obviously near a river, railway, etc.. then it is advisable to make checks.
The final authority worth noting is called Patrimonio and guards buildings of historic interest. If you are looking at a property of historic interest it may be that any alterations or repairs to it require additional permissions from Patrimonio. This can also apply to property in the vicinity of something of historic interest, for example an horreo that is more than 100 years old.
Again, if any sign of this authority shows up in any of the documentation it is advisable to check what restrictions may result from it.
Check for tax and legal liabilities
Under Spanish law various debts and also rights can stay attached to a property even after a change of owner. The principle ones to look out for are:
Under the Spanish law of forced heirs any direct descendants (children, grandchildren, etc.) or ascendents (parents, grandparents, etc.) cannot be disinherited from at least part of a person’s estate, irrespective of what a will might stipulate.
People outside the direct lineage (siblings, cousins, etc.) do not have legal rights of inheritance other than in the case of their being no will, in which case many relations may acquire some right to the property.
If a property is being sold after being inherited (this is often the case) then the notary handling the sale should check all the relevant birth and death certificates to verify that the seller has the right to sell the property.
If there is a will then this normally isn’t too difficult, but if there was no will, and especially if there may be relatives in south America (very common) or similar, then the risk exists that at some future time a distant relative of the deceased previous owner could turn up and try to claim part of the property.
Liability for unpaid annual local tax bills (Impuesto sobre Bienes Inmuebles, or IBI for short) can also remain with the property after a change of owner.
This can take two forms, firstly any unpaid bill in the last 5 years (plus interest), and secondly the 5 years penalty back-payment of any unauthorised addition to the property that is subsequently legitimised.
To check this you need to look at the IBI receipt or bill for the current year. This will show the total owed and also the size and designated use of all of the parts of all buildings on the property.
If the account is paid for the current year and the building matches its description on the bill (this data is taken from the catastro) then everything is OK.
Rights of purchase
Under Spanish law owners of neighbouring properties have a right of first refusal (at the price another prospective purchaser agrees) when land is put up for sale and retain this right for up to a year after any sale of the land.
Unfortunately there doesn’t seem to be an effective system for notifying interested parties of when said land is for sale, and in addition it can happen that people who were aware the land was for sale but did nothing subsequently change their mind about wanting it after a sale to someone else.
It can sometimes arise, therefore, that some weeks or months after purchasing a property you may find someone claiming that they have the right to purchase some bit of the land you bought with your property.
If this does happen it normally comes to nothing, but it is advisable to make no comment to the claimant and to immediately contact a lawyer.
Check for any legal complexities
It may sometimes be the case that a sale has conditions or complexities attached, most commonly the payment of an inheritance or other tax bill that has to be made simultaneously with the sale.
If this situation arises it is because the inheritor of the property does not sufficient capital to pay the inheritance tax bill and therefore can’t claim the inheritance. The way out of this deadlock is to claim the inheritance, sell it and pay the inheritance tax all in the same notarised session.
Inheritance issues are the most common complexity, but in theory almost any condition can be written into a sale contract so long as both parties agree to it.
Whilst many people take the view that a lawyer is simply not necessary when the sale contract is an entirely standard one, if you find yourself in a situation with legal complexities then it is advisable to have the sale contract and the relevant legislation checked out by a specialist lawyer to assess if there is any risk above and beyond the normal.
Conduct a survey on the property
Whilst many new or recently properties should in theory (ie. according to Spanish law) come with a 10 year guarantee, in practice these guarantees often aren’t worth much either because they were built or restored privately, they are from a construction company which is now bankrupt, or because going to court over a dispute would cost more than any likely payout.
It is, therefore, advisable to get some form of survey so that you know in what condition the property you are buying is and what you may have to spend to rectify its problems.
Much like the UK, various levels of survey are available, and if you try to include any form of liability for missed issues in the contract the price rockets.
Also much like the UK, the value of the survey varies considerably based on the person conducting it.
Galiciaproperty offers a basic (ie. all liability excluded but it’s also inexpensive) visual survey under its property search service.
Additionally or alternatively, the restoration and build section tells you the major common problems to look out for and details how Galician properties are constructed allowing you to analyse a visible fault for yourself.
Whilst the checks above may turn up problems, there is a little silver lining to this in that these problems can often be used to take the price down, and many of them sound worse in theory than they actually are in practice.