Although the offers of the banks can appear so attractive that they can make us forget the need to ensure the legal guarantees of the purchase, let’s not make same mistakes of the past and be sensible and careful when it comes to buying a â€˜bargain’ property being sold by a bank. They will always be looking after their own interests and you must look after yours.
–Â Deposit contract:
Remember to treat it as aÂ true deposit contract,Â and therefore that the penalty clauses that apply, if the sale is finally not concluded, areÂ balanced, reciprocal, equivalentÂ for buyer and seller. Obtain a clear statement that the rule governing the deposit is that ofÂ 1454 of the Civil Code. Verify that the Bank is the owner of the property (and not a third party investment fund) and that the registration of your ownership of the property at the Land Registry will be problem free.Â
–Â Local Taxes, Community of Owners, Energy Efficiency and First Occupation Licence:
Make it clear in the deposit contract that you will not sign the purchase deeds without certifiedÂ proof of payment by the bank of these obligations and being shown the First Occupation Licence. Also, before marketing the property, the bank should have obtained and paid for the Energy Certificate. Â Do not renounce these items or the bank having responsibility for their costs.
–Â Defects:Â Â
A good survey report is very advisable, so you can avoid buying a property with defects.Â The law governing defects lasts just for the first 10 years after the architect confirming completion of construction of the property (Not the First Occupation Licence, which could be many months or even years later) and according to these rules:
a)Â For 10 years,Â for material damages caused only in the structure of the building due to defects that affect the foundations, supports, beams, floor structure, supporting wall or other structural elements, that directly compromise the stability of the building.
b)Â For 3 years,Â for material damages of the building caused by defects of the building construction, materials or the installations that produce the breach of the habitability requirements of the provision 3,1,c. of the appropriate Law. Mostly relating to the failure of services and water penetration.
c) For 1 year: material damages due to any defects in the construction of the building, including any that affect the elements of finishing of the works
d) For 6 months: Consumer law allows for compensation or cancellation of the sale if defects have been deliberately hidden, but become apparent in the first 6 months.
According to Law:
*Notary expenses are paid by seller less one copy of the deeds
*Registry Expenses are paid by the buyer
*PlusvalÃa (local Capital Gains Tax) is to be paid by the seller.
Guest Blog by MarÃa Luisa de Castro of CostaLuz Lawyers Â Â https://www.costaluzlawyers.es