Buy Real Estate with entanglement in Spain
A person contacted me in the occasion that he had signed a contract with a major international brokerage firm to buy an apartment in Spain. For various reasons, began buying to be pretty rough for the completion of the purchase. He asked me to make an assessment of the case, including the possibility to terminate the contract and demand the money paid in hand on 10 % return.
Initially , I mentioned the general rule in such circumstances in recession: it is always safer to go ahead and complete the trade , but to reverse it and require hand money refunded . The reason is that in times of low sales of real estate , the liquidity of most players in this industry badly. When one requires the paid hand the amount of money back , ie at least 10 % of the purchase price , we firstly estate transactions not being completed .
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Secondly, in certain circumstances may any of hand the money has gone to cover the debts and liabilities of the property, despite this generally should not happen without the buyer’s consent , which in turn may mean that the seller simply has not money anymore. Considering the seller’s unwillingness to repay hand money and to try to avoid precious and time-consuming litigation , we decided to renegotiate .
To clarify what really happened , I agreed to meet with the local representative of this estate office in Spain. I took an inspection of the property, and hoped to get undergone some documentation . This was however not possible to see , according to the representative was everything I needed in an office that currently were closed and he had no key . On my question about what they meant by that purchaser should sign the deed without having been able to see all the important documents , he replied that the buyer had already signed a private agreement in English, and all also were in perfect order .
The deadline for the shot -up was only a few days away , and the company wanted it over with. If my client would withdraw from the deal , he would follow in the private contract losing the entire amount paid . On the other hand , the company had promised funding of 80 % of the purchase price , and my client was told that this was clear. The financing was in place, and it was just coming to Spain to sign the public deed . The company swore that it was only fee that was missing, but this was just a formality .
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When the valuation was well in place, however, it turned out that it was significantly below the purchase price , which in turn meant that the customer had to pay twice as much equity as he had predicted when he signed the agreement. Brokerage denied any guilt in this , and had promised funding, and that they had obtained. The fact that the customer did not have enough equity they had not anything . On top of it all showed a closer analysis of the various items of expenditure that there was inherent € 4,000 in fees to an external person who arranged the financing . Some had thought that as long as funding fell into place , it was just taking up sharply paid.
Buyer did not accept neither credit degree or other conditions , and it was not really blessing in disguise that this trade was not completed as it should . The customer said that the company had to find something else that had better relationship between the actual price and valuation .
Now began two weeks of daily phones , where the company threatened both the one and the other. They should have paid for the valuation, they should have accepted the loan , they should have the deed signed. But my advice to the client was not to be concerned, and by all means do not sign on anything as long as we had everything ready . The first thing we did was to get a new tariff , which confirmed that the property was worth much less than the brokers would have it.
Finally I got the company to realize that the most important thing for both parties was that a sale took place , they needed to close the deal , and my client would have an apartment in Spain. The brokers made a number of properties that were within the price was right for the buyer to pay according to the bank was now willing to finance , and he came to Spain to choose the one he liked best .
A new agreement was signed , and the new date for the extension ment was set. In good time before the extension ment I asked to get all documentation submitted . There was a part , and it seemed for a while that everything finally started to work. The same day we found out that there was a registered encumbrance on the property . Encumbrance due to an unpaid tax claims , and it was therefore taken outlays lien on the property . The bank refused to sign the loan course title to a property with an encumbrance . When I made the agents aware of this serious problem , I was told that the cancellation of the execution pledge was initiated long ago. Having insisted on seeing evidence of this , I got proof that they had started this process a few days after they had said that they had done it long ago.
We waited and waited. The client had come to sign the deed , and had to go back to Norway for the third time , still without property in Spain. When the charge is eventually removed and we agreed a new date for the extension lift, customer came back to sign the deed and take over the property . It turned out that there were two individuals who should sign on behalf of the company , and I therefore requested to broadcast authorizations to assure me that everything would go well this time . But no, this authorization was not inscribed in the trade register. Moreover , it turned out the statement that the company had a lot of representation matters were withdrawn. In the face of notary we came to a clear conclusion : an authorization in company matters is of a general power of attorney and that is not limited either in time or space , to be inscribed in the trade register in order to give the buyer the greatest possible degree of legal protection.
It is only in the way a buyer of a property belonging to the company can claim to have acted in good faith and be assured of legal protection . Thus, it was only for my customer to return home once again , after having given me the authority to sign for him when the big day should ever come . Naturally, given the company’s representatives told to submit all relevant documentation when their authority was duly inscribed .
A few days later, finally estate transaction completed . Seller’s representatives were not high in the hat , bank director was sure tired of the whole affair , and notary bubbled nor when he saw us again once more . But this time I could at least go out with a deed in hand, and my client is finally own a great holiday home in Spain.
The moral of this story is that there are a lot of resources to spare to contact a professional who examines all the legal and factual circumstances relating to a property , where before signing the reservation contract. In this contract are often already some of the important terms related to the agreement embodied . After signing this document , one can only deal with one property, even though it quickly turned out that there are many formalities that are not quite in order. A property that has legal pitfalls can give two or three times as much work as someone who has everything correct from the start.