Due to the simplicity of the transfer of title procedures, many estate agents will offer to undertake the legal process involved in the property purchase; many will point to an in-house lawyer and state that he will undertake the legal work on their behalf. However, such an offer should not be confused with ‘Conveyancing’ carried out by independent UK/Spanish lawyers and will involve just the barest legal process to effect the financial transaction of sale.
A buyer should be aware of the serious conflict of interest which arises when an estate agent covers the above-mentioned legal work – even if they have their own in-house lawyer. The estate agent is principally acting on behalf of the vendor – the vendor pays his commission and therefore it is in the estate agent’s interest that the sale is completed; they will not be looking for complications. You must also remember that an in-house lawyer will also be employed by the estate agent – he is not independent and consequently, his main interest is to see the sale proceed.
There are two simple questions to ask oneself:
1. Would you buy a property in the UK and instruct the estate agent (who acts for the vendor) to also act on your behalf to undertake the conveyancing; and,
2. Would you buy a property in the UK without using a solicitor to check that:
• all the relevant planning permissions are in place;
• that there are no covenants in the title deeds to prohibit your use of the property;
• that the property actually belongs to the vendor;
• that there is not any plans to build a ‘motorway’ adjacent to your garden. etc
The simple answer is No and therefore why do any different in Spain.
Further, the most important factor is this. If a buyer uses an estate agent to undertake the legal process and it later transpires that there is a problem with a conveyancing issue, you will not be able to sue the estate agent for negligence – you did not instruct him to undertake conveyancing work. However, in the unlikely event that an independent lawyer is negligent, a claim may be made against him and he will have professional indemnity insurance which will cover any damages awarded against him.
The potential pitfalls in the conveyance are far more problematic than in the UK. Both the European Union and the Spanish Government have investigated the presence of illegal urbanisations where unwary buyers end up having to pay unpaid taxes, unregistered title deeds and difficulties in obtaining municipal services or building permission.
Similarly, the property may have been mortgaged in the past and if the mortgage has not been redeemed, the charge will remain registered against the property.
In respect of rustic property, the possible difficulties are additionally numerous. One must remember that farmers have recognised the value of their land and many will undertake development without proper permission which, may result in the house being demolished as there is no provision for retrospective planning permission in the province.
Nevertheless, the prospective purchaser should not be disheartened. With high increases in property valuation over the last 4 years, the financial attraction is immediately obvious coupled with the thrilling feature of having a second home in the sun with the additional potential of a buoyant rental market.
Further, retirement to Spain is becoming a viable proposition. Retired couples are selling their properties in Britain at premium value and finding themselves able to afford a comparable property in Spain with significant cash sums to spare to boost pensions.
In essence;
REALISE THE DREAM, ENJOY IT
but do it properly with peace of mind and confidence – use an independent lawyer.