For many aspiring expats and émigrés, 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, and an al fresco life that lasts for much of the year? Add to this well-developed services infrastructure, an accessible language, a quick and efficient commute to the rest of Europe and political stability – and you have somewhere ideal for retirement or holidays.
That said, there are pitfalls to buying property in Spain which can swiftly turn any dream into a nightmare!
Indeed, anyone who researches Spain's property market will most certainly come across the handfuls of international news stories of expats who have unknowingly bought illegally built houses or suffered 'land grabs' and the costs associated with infrastructure works.
So, the question is: how do you avoid the pitfalls inherent in buying property in Spain?
This question is arguably more important now than ever, as more foreign buyers seek to take advantage of the excellent quality of life and relaxed visa regulations in Spain.
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 not doing their homework and partly due to the 'system' in Spain.
The key, of course, is knowledge. Before buying Spanish property, make sure you know what you are doing and are familiar with how 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 in 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 the same in 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 purchase 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 the land falls in this category, significant constraints restrict what can and cannot be built on it 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 when purchasing Spanish property and instead use an estate agent or another unqualified person. This course of action can have devastating consequences.
That said, if you make the informed decision to use a lawyer, then make sure you employ a lawyer who speaks your language fluently. It is also imperative that the lawyer is independent of the seller and any estate agent, is registered with the Colegio de Abogados and has significant public liability insurance (some have a policy with low coverage). Finally, ensure all advice provided is in writing and keep a copy.
Sadly, the standard of legal practice in Spain is often poor and is notable for conflicts of interest and sloppy practice. So, make sure that you spend time securing the best possible legal services – 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 go to your lawyer whether the document is an agreement with your estate agent (some can result in considerable, '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: to gain a sales commission. The latter can be quite steep in Spain (up to 18 percent!), so you represent a vital source of income that may result in the agent obtaining a 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 before 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 property boom in Spain has led to varying quality standards in property construction in the country. While some buildings have been of the highest standards, this has been matched by some poor and substandard facilities, 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 excellent, fully qualified UK building surveyors in Spain who will undertake a proper and rigorous survey. Use one – but make sure they are fully qualified and have valid insurance to undertake a survey in Spain.
►7. Ensure your intended property has mains water, electricity, internet and a telephone landline.
Every Spanish property in an Urbanizado area should have mains water, electricity and a telephone landline (with ADSL available). If the property does not, be wary, as your intended property may not actually be Urbanizado. If that is the case, it may never be connected to these services – regardless of what your agent or the seller may claim.
►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 challenging. Almost by definition, any property purchased abroad may not be forever, whether 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 recommended), 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 most significant buying market), etc.
►9. Location is everything.
Choose your location carefully, particularly if you are buying a property for permanent living in Spain. Be wary of 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. Full-time life in Spain requires a location that will provide you with a 'life' with 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 central town
Within one hour of 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 one that offers good value.
Some properties in Spain are priced surprisingly low. There is invariably a good reason why a property has a low price, and this may be because it is a deeply flawed property. Find the objective reason for its pricing before buying, and be sceptical of overly 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 be a sound investment and a home that can provide you real joy.