Current 2024/2025 Buying property in Spain and the legal consequences
Buying property in Spain is associated with a multitude of legal, fee and tax implications, and it is crucial that only a property in perfect legal condition should be purchased and the property purchase must be legally and tax-compliant.
In the following articles we will illustrate the individual legal consequences using examples.
During the preliminary legal check, a mortgage was discovered as a burden on the land register sheet. The seller claims that he would cancel the mortgage.
The property buyer signs the so-called Arras contract with the estate agent and signs the deed of sale 30 days later at the notary. He makes the full payment to the seller. The seller declares that he will cancel the mortgage.
But in reality, the seller does nothing, and 2 years later the property buyer wants to sell the property again and notices that the mortgage burden of 100,000 euros has not been paid off and cancelled.
The property buyer has placed his trust in the broker and the notary in good faith, but neither of them has any obligation to inform the property buyer of the mortgage cancellation.
The reason is that in Spain there are indeed mortgage registrations that have not been cancelled, even though the loan has long since been repaid. However, these are exceptional cases.
TIP: As soon as a mortgage is visible in the land register extract, a law firm should be called in to carry out a proper legal check.
Attorney D. Luickhardt and his Legalium team are at your disposal for the complete real estate purchase process with legal certainty throughout Spain.
What should be done?
If a mortgage is evident, a balance certificate must be requested from the bank.
The cancellation of the mortgage must already be specified in the Arras contract (pre-purchase agreement), with the corresponding retention for the cancellation costs and the retention of the loan repayment amount.
At the notary appointment, the private pre-purchase agreement is then included in the notarial deed and the bank should be present at the notary appointment and then receives a bank check in the name of the bank to cancel the mortgage and this amount was of course deducted from the purchase price.
Furthermore, the property seller must commit to the notary in the notarial deed that he will carry out the mortgage cancellation with his bank and a deadline of 90 days must be set, optionally with contractual penalties.
This procedure varies from case to case and is managed by our law firm, which means that you are supported throughout the entire purchase process and are even personally represented at the notary appointment by attorney D. Luickhardt, or by a power of attorney if you as the property buyer cannot travel to the notary appointment. Finally, we check the mortgage cancellation so that there is no subsequent liability for the property buyer.
