For many aspiring expats and emigrees, buying a property in Spain represents a dream that will provide them with either the perfect holiday home or a new life in a country justifiably famous for its superb quality of life.
After all, what could be better than living in a country with a wonderfully benign climate, a friendly and tolerant population, an intact culture and an al fresco life that lasts for much of the year? Add to this a services infrastructure that is well developed, an accessible language, quick and efficient communications to Europe and political stability - and you have somewhere that is ideal for retirement or holidays.
However, there are pitfalls to buying property in Spain which can swiftly turn any dream into a nightmare!
Indeed, anyone that’s started to research buying property in Spain will most certainly come across the handfuls of international news stories of expats who have unknowingly bought illegally built houses or suffered from ‘land grab’ and the costs associated with infrastructure works.
So, the question is: how do you avoid the pitfalls inherent in buying property in Spain?
This is a question that is, arguably, more important now than ever before, as foreign buyers seek to take advantage of the collapse in Spanish property prices. These have dropped massively since the height of the boom in 2007, and have resulted in a sea of bargains, with some properties in Spain having dropped in value by as much as 40 percent.
For the first time in many years, Spanish property has become affordable again with some properties now offering truly extraordinary value for money.
The first thing to appreciate is that you can buy Spanish property safely! Most people do - although a significant number still end up with problems, partly due to their own stupidity and partly due to the ‘system’ in Spain.
The key, of course, is knowledge. Before you think of buying Spanish property, make sure you know what you are doing, and are familiar with the way to buy property in Spain.
Rules for buying property in Spain
► 1. Never think that the process of buying property in Spain is the same as for your own country.
EU law is not identical in all EU member-states, so do not come to Spain thinking that the way things are done in the UK or Denmark, for example, is same for Spain. Laws may be similar, but not the same. So be far more cautious than you would be in your own country: triple check everything, and be sceptical and disbelieving until every aspect of your intended property (such as its legality and potential liabilities) is categorically proven to your satisfaction (in writing!).
►2. Understand an outline of Spanish property law.
You must understand the distinction between Urbanizado, fully Urbanizado and Rural before you think of buying in Spain. These designations define (to a large extent) the nature of the property you intend to buy, and whether the property is likely to be legal and free of potential state-imposed liabilities.
Urbanizado crudely means building land – somewhere that can be built upon, subject to compliance with planning regulations. Fully Urbanizado is when all infrastructure works have been completed (which you may otherwise have to pay for!). Rural means agricultural land, and if land falls in this category there are very significant constraints that restrict what can and cannot be built, and the size of what can be constructed.
►3. Always use a conveyancing lawyer.
It is astonishing how many people do not use a lawyer for their purchase of Spanish property, and instead use an estate agent or other unqualified person. This course of action can have devastating consequences.
That said, if you make the informed decision of using a lawyer, then make sure that you use a lawyer who speaks your language fluently, is independent of the seller and any estate agent, is registered with the Colegio de Abogados and has significant public liability insurance (some have very low cover). Finally, make sure that all advice provided is in writing and keep a copy.
Sadly, the standard of legal practice in Spain is generally often poor, and is notable for conflicts of interest and sloppy practice. So, make sure that you spend time to obtain the best possible lawyer – before you start looking at properties.
►4. Never sign anything unless your lawyer is present and it is translated into your language.
This may seem obvious, but people repeatedly sign documents without fully understanding their meaning. So always, always go to your lawyer whether the document is an agreement with your estate agent (some can result in very severe, ‘hidden’ fees!) or a seller.
►5. Your estate agent is not your friend, he is a salesman.
Never confuse your relationship with an estate agent, and never let him become involved in the conveyancing of your intended property. Every agent is a salesman with one aim, and that is to gain a sales commission. The latter can be very high in Spain (up to 18 percent!), and so you represent a vital source of income that may result in the agent obtaining a very sizeable sum of money. Indeed, your sale may represent, in sales commission to the agent concerned, more than an average Spanish salary.
So, turn to objective professionals (such as lawyers and surveyors), for all advice and investigations.
►6. Always use a building surveyor before you buy a house.
Once again, it is amazing how few people use a building surveyor prior to buying a Spanish property. While it is certainly not common practice to solicit these services in Spain, it is still recommended that you do so, despite what people may tell you.
Needless to say, the long property boom in Spain has led to many variations of quality in property construction. While some building has been of the highest standards, this has been matched by some very poor and sub-standard building, which you should make an effort to avoid at all costs!
Oddly enough, the profession of building surveying as understood in the UK does not exist in Spain. However, there are some really excellent UK fully qualified building surveyors in Spain who will undertake a proper and rigorous building survey. Use one – but make sure that he is fully qualified, and has valid insurance to undertake a survey in Spain.
►7. Make sure that your intended property has mains water, electricity and telephone land line.
Every Spanish property in an Urbanizado area should have mains water, electricity and telephone landline (with ADSL available). If the property does not - then be very wary, as your intended property may not really be Urbanizado; and, if that is the case, it may never be connected to these services – regardless of what your agent or the seller may be claiming.
►8. Always buy as if you are going to re-sell your intended property.
A classic error of many buyers is that they buy a property in Spain that is suitable for only a tiny proportion of the buying market, thus making any re-sale very difficult. Almost by definition, any property purchase abroad may not be for ever, whether it is for a holiday or intended for permanent living.
So, look for obstacles that would ‘turn off’ future buyers. Examples are steep plots, many stairs up to or down to a property entrance, problems with parking, shade from the sunshine (common to hilly areas), too few bedrooms (a minimum of three is good), noise from nearby roads, lack of privacy, nearby electricity pylons, bars and restaurants close by, an overwhelming density of foreigners (which may put off Spanish buyers – who are the biggest buying market), etc.
►9. Location is everything.
Choose your location very carefully, particularly if you are buying a property for permanent living in Spain. Be wary about entering an expat ‘ghetto’ (however expensive), take care not to live too far from ‘civilisation’, and beware of being ‘suckered’ into buying a pretty property because it has lovely views of a glittering sea. After all, properties are immobile, and full-time life in Spain requires a location that will provide you with ‘life’: people, a community and proximity to services and amenities.
A crude guideline for buying in Spain (for permanent life) could be summarised as being somewhere that is:
Within two minutes of a village
Within 15 minutes of a major town
Within one hour to an international airport.
Preferably, the sea (for re-sale and rental purposes) should be no further than 15 to 20 minutes from your intended property.
►10. A bargain property is not the same as a good value property.
The Spanish property crash has resulted in a vast number of properties being for sale, some of which are now priced breathtakingly low. However, do not be mesmerised by low prices. There is invariably a good reason why a property has a very low price, and this may be because it is a deeply flawed property. So find out the objective reason for its pricing before buying, and be sceptical of over-cheap properties.
If you follow the rules listed above, you will buy safely in Spain, and will likely be rewarded with a property that will not only be a sound investment, but also a home that can provide you with real joy.