Steps involved in the purchase of a property
Text: Anja Sämann-Gutschick and Armin Gutschick
Here we will address the main steps that must be followed when buying a property – from drawing up a private contract to the public deed of sale and its inclusion in the Property Registry – in order to offer buyers in Ibiza a general overview of the process.
A contract for buying and selling a property can be carried out privately, and then made public with a deed before a notary. In Spain, such private contracts are legally valid because Spanish law allows both parties to choose freely how they wish to execute this type of legal business. In practice, a private contract is generally signed, which is then made public. In many European countries, laws about this differ. In Germany, for example, it is compulsory to legalise the sale of a property with a notary deed, meaning that private contracts have no legal value.
In Spain, however, the obligations established in private purchasing contracts are binding for both sides and must be strictly complied with. However, the legal effects of such a private contract only involve the relationship between both parties, and should not in principle have any effect on third parties. This means that the ownership of a property does not affect the rights of third parties, until it is included in the Property Registry. Therefore, in order for a property purchasing contract to be effective regarding third parties, and in order to guarantee the exercise of good faith, it is necessary to include it in the Property Registry, which must be done with public deeds.
Before authorising the sale deed, the notary will collect information from the Property Registry regarding the property that is being sold. When the request for information sent by the notary is received by the registrar, the latter is obliged to immediately declare any modifications regarding the property and any requests presented by other notaries. As a consequence of this request, any later requests by other notaries will be “blocked”, so to speak. The notary will testify the declarations of both parties and will make the necessary legal warnings. Once the deed has been drawn up, the notary will immediately notify the Property Registry of the sale.
Notaries are not obliged to verify what the sellers declare regarding the properties that are sold. Therefore, the buyer should check that the description of the boundaries of the property is correct, that the buildings within it are not rented out and that the square metres that are declared coincide with the actual size of the building. The original deed, signed by both parties and the notary, is called a matrix. It remains in the notary’s archives and will be added to his book of minutes.
A few days after authorising the deed, the notary will give the buyer the first authorised copy of the deed, signed and stamped, which must be presented to the Property Registry in order to be registered. In this process, it will be dressed with the official stamps and notes that verify the payment of the tax on property transfers. In Spain, registering a deed at the Property Registry is not part of a notary’s responsibilities.
The buyer should keep this first authorized copy safely, with its stamps, proofs of payment and registry inscription details, as proof of purchase of the property.
Anyone who presents before the Property Registry a legitimate cause of interest in knowing the legal status of a property can access this information by requesting it from the corresponding registry. In this request, the name of the owner of the property and its registration data (volume, book, page and property number) must be clearly indicated. The Property Registry will issue a “Simple informative note” that provides concise information of the current status of the property, its ownership, and any burdens it may bear. In many cases, this simple note is enough to find out the most important details regarding a property in order to begin the negotiations to buy. A certificate from the Property Registry will allow you to verify whether the declarations of the seller are true and what burdens the property bears. •