Before purchasing a house, it is essential to consider various aspects to ensure a successful investment and avoid future problems. When acquiring a property, you are not only acquiring a physical space but also responsibilities and rights that require careful evaluation.
In this informative article, we present some key points to consider. However, we strongly recommend always seeking the assistance of a specialized lawyer to review the documentation and relevant legal aspects. The lawyer will provide you with security and help avoid potential setbacks in the buying process.
Property Description.
Before delving into the purchase of a property, it is of utmost importance to thoroughly examine its description in the Property Registry through the request of a “nota simple” (property report) and the Cadastre record. The “nota simple” will provide valuable information about the description of the dwelling and its annexes, such as a pool or a garage, as well as details regarding ownership and any potential encumbrances that may affect the property. It is crucial to ensure that both the description in the “nota simple” and the Cadastre record align with reality, as the property as described in the Property Registry will be the only one considered in the buying process.
For instance, if you are interested in purchasing an apartment that includes a storage room and a parking space, but only the dwelling is mentioned in the “nota simple,” you should take into account that the storage room and parking space may have their own deeds and be registered as separate properties. It is essential to review this additional information and ensure that they are included in the new deed of sale to avoid the risk of acquiring only the dwelling.
Ownership of the Property.
Before proceeding with the purchase of a property, it is essential to ensure the legitimate ownership of the seller. This step is crucial to guarantee that the seller holds a valid property title that establishes them as the rightful owner of the property being sold.
The most common way to verify ownership is by requesting a “nota simple” (property report) from the Property Registry. This report provides detailed information about the legal status of the property, including ownership, encumbrances, and limitations that may affect it. However, it’s important to note that the information in the “nota simple” may not be up to date in some cases. This can occur if the seller has not yet registered their property title, and the name of the previous owner still appears in the records. In such cases, it is crucial to request the seller to provide additional documents that substantiate their legitimate ownership and take the necessary steps to regularize the registration before proceeding with the purchase.
It is important to keep in mind that only the registered owner or a person duly authorized by them has the legal capacity to sell a property.
If the transaction will be completed at a notary’s office, the notary will also conduct a thorough verification of ownership. Therefore, before signing any preliminary documents such as a deposit contract or a purchase option, it is of utmost importance to rigorously verify the seller’s ownership. This will not only help avoid legal issues but also ensure a secure and smooth transaction.
Charges and encumbrances.
Charge and encumbrances refer to rights or responsibilities that are imposed on a property and granted to third parties, such as mortgages, liens, easements, among others. Most of these charge or encumbrances can be identified in the “nota simple” obtained from the Property Registry. However, it is possible that there may be additional unregistered charge or encumbrances.
If it is discovered that a property has mortgages or liens, it implies that the property is responsible for paying off the outstanding debts. If these charge or encumbrances are not cleared before acquiring the property, the limitations imposed by them can affect the new buyer.
It is crucial to conduct a thorough analysis of the charge and encumbrances associated with a property before purchasing it. This involves obtaining updated information from the “nota simple” from the Property Registry and, if necessary, seeking specialized legal advice to ensure a full understanding of the financial and legal implications of these encumbrances.
Community of owners.
If you are considering the purchase of a flat or premises in a building subject to the horizontal property regime, it is essential that you verify some key aspects before making the purchase. Here are the most important ones:
- Payment status of the community fees: It is essential to ask the owner for an updated certificate of debt with the community, issued by the administrator of the property or the secretary of the community with the approval of the president. Checking this document before the purchase is of vital importance, as the owner is responsible for paying the community fees for the current year and the three previous years. In addition, during the signing of the title deed, the notary will request the certificate to make sure of any outstanding dues.
- Extraordinary contributions: It is crucial to check if there are any previous agreements of the owners’ meeting that have approved extraordinary contributions pending payment. Once you become an owner, these fees will affect you directly and you will be responsible for their payment, even if you did not participate in the vote.
- Building Bylaws: Carefully review the building’s bylaws to identify any special limitations that may affect you as an owner. These restrictions could include rules for the use of common elements, limitations, regulations for the installation of elements, works, among other relevant aspects.
Municipal tax (IBI)
The Impuesto de Bienes Inmuebles (IBI) is a tax that is applied to properties and has a “real affectation”, which means that the property is subject to the payment of this tax. Generally, the last four annual payments and the current year must be considered. However, it is important to bear in mind that if the Town Hall has taken steps for collection, this will have interrupted the prescription periods, which could result in previous debts affecting the property.
It is therefore essential to check that the IBI corresponding to the property has been paid in full during the non-prescribed years, in order to avoid future problems.
If you want to know the IBI payment history, you should ask the seller to provide copies of the original receipts. In case the seller does not have them, he/she can ask for a copy at his/her bank, where the payment of the tax is normally paid by direct debit. If this option is not feasible, he/she can ask the Town Hall to issue a certificate indicating the IBI payment status.
It is important to bear in mind that, if there are debts corresponding to that period, the buyer could be responsible for paying them, as otherwise, the Tax Administration could proceed to the sale of the property in order to recover the amounts owed.
Urban situation
Before purchasing a property, it is essential to ensure its urban planning status, especially if it is a villa, semi-detached/attached house or a country house. In addition to applying for and verifying the cédula de habitabilidad, it is necessary to carry out a thorough check of the urban planning situation.
The licence of first occupation, also known as cédula de habitabilidad, certifies that the dwelling is fit for habitation, but does not guarantee that all constructions are legal. Therefore, it is essential to verify the urban planning situation of the property to determine whether it is possible to carry out works, extensions or additional constructions in the future, in compliance with the current regulations.
If the seller does not have the documentation proving the legality of the existing constructions, it is possible to request information on the corresponding licences at the relevant Town Hall. However, it is necessary to obtain the owner’s permission to carry out this procedure.
It is essential to be sure of the planning status of the property in order to avoid potential legal problems and to ensure that any future modifications or expansions can be approved by the relevant Town Hall.
Conclusion
Before drafting and signing a private contract, whether it is a deposit contract or an option to purchase, it is highly recommended that you carry out an exhaustive review of the physical and legal situation of the property.
It is important to bear in mind that this type of contract sets out the obligations and commitments of both the buyer and the seller, and usually involves a significant outlay of money by the buyer. Signing this document carries important legal implications, and if the necessary precautions are not taken when drawing up the contract, you could be committing yourself to acquiring a problematic property. Therefore, having the legal advice of a specialist lawyer is crucial in this process.
A specialist lawyer will be able to thoroughly review the contract, assess the physical and legal situation of the property, and provide you with proper legal guidance to ensure that you are making an informed and protected decision. Their experience will help you to identify possible clauses or conditions that need to be included or modified in the contract, as well as to prevent possible legal risks.
For this reason, at Real Estate Balear, we value the importance of providing a transparent and secure buying and selling experience to our clients by collaborating with the real estate law firm DeSalvador, renowned for their extensive experience and professionalism in the field.
The collaboration with DeSalvador allows us to have the necessary legal backing to ensure that each real estate transaction is carried out properly, protecting the interests of our clients.
