Due to the pace of the market, an “off plan” reservation contract, is now a more commonly first step. Signing of this document will involve the paying of a small deposit – perhaps €3000 or €6000 but it has the impact of removing the property from the market.
It is vital to know and understand what these conditions apply to your purchase before you proceed.
The Contrato de Compraventa is usually a short document containing details of the vendor and the purchaser, a legal description of the property, the purchase price, means of payment, date of completion. With a new build still under construction, there may also be a preliminary supplemental deed called the Contrato de Infraestructura - later confirmed by the Notary with a second Escritura called the Escritura de Obra Nueva - that relates to finalisation of the construction of the property.
Once both parties have signed the Contrato de Compraventa and the 10% deposit has been paid, it is binding. This means that the purchasers are committed to paying the balance of the purchase price, and the seller is committed to transferring the ownership of the land/property to the purchaser. The only protection in respect of off-plan property purchases is a proper and enforceable Bank Guarantee – see above.
The time between signing the Contrato de Compraventa and the Escritura Publica de Compraventa, which completes the purchase, varies. If the villa or apartment is physically constructed and both parties are ready - with all documents and purchase money in place - completion can take place within a matter of days after exchanging contracts. However, if a new build is being purchased which has not yet been constructed, completion will take place on the signing of the Escritura – a public document - in front of the Notary and the handing over of the keys by the developer or estate agent, which may be some months away.
© The Rights Group SL 2006 (Marbella)
Mark FR Wilkins
www.therightsgroup.com (under review)
+ 34 600 343 917
Please note that the information provided in this article is of a general interest nature and intended as a basic outline only. You are well advised to contact a professional for advice specific to your circumstances. Nothing contained in this article should be seen or taken as the writer or publisher providing legal or financial advice.