How to buy a property in Moraira

Everything you need to know about pruchasing a house in Moraira, Spain

Consumer security in the purchase of real estate.


INDEX

1.- Looking for the perfect house

2.- The contract sign

3.- Tax payment

4.- Registration in the Land Registry

5.- The costs of buying a home

 

Probably the most difficult part of the home buying process is choosing the right home. To do this, it is necessary to carry out a detailed search, and thus:

• COMPARE the different possibilities offered by the market.

• RECOGNIZE in detail the physical characteristics of the house.

• FIND OUT the legal situation of the house.

The real estate agent will present us with different purchase possibilities for us to choose from. IN ANY CASE, before signing any contract or disbursing any amount of money, we must:

 

1 Examine the physical characteristics of the property

For this, it is essential to carry out a personal visit to the house that is offered for sale, going to see it, checking that it matches what is offered, the quality of its materials, the state of its facilities, its degree of conservation, luminosity, views , environment that you enjoy, noise, etc... Any anomaly do not hesitate to bring it to the attention of the real estate agent, and if you are not convinced by his explanations, have a professional accompany you (architect or quantity surveyor)

When the first information about the property comes from information brochures, it is necessary to take into account:

- That the buyer may demand from the seller the services, facilities and methods of payment that are included in the offer.

- Companies that carry out the activities of supply, promotion and advertising of dwellings must have the following information available to the public:

- The name, business name, company name and address of the seller, as well as the name and address of the seller's agent.

 

When the first information related to the home that we can buy results from information brochures, it will be necessary to take into account:

- That the buyer may demand from the seller the services, facilities and forms of payment that are included in the offer, promotion and advertising of the home, even if they are not stated in the contract that is subsequently signed.

- Companies that carry out housing supply, promotion and advertising activities must have the following information available to the public:

  • The name, business name and address, where appropriate, the registration data in the Mercantile Registry of the seller.

  • General plan of the location of the house and plan of the house itself, as well as description and layout of the electrical, water, gas, heating networks, and their guarantee, and of the fire safety measures available to the property . If the book of the building is deposited in the Property Registry, all these data can be consulted by the buyers.
  • Description of the dwelling with an expression of its useful area, and general description of the building in which it is located, of the common areas and of the accessory services.

  • Energy efficiency certificate with reference to the materials used in the construction of the house, including acoustic and thermal insulation, and of the building and common areas.

  • Certificate of Habitability conceived by the competent administration.

  • Instructions on the use and conservation of the facilities that require some type of action or special knowledge and on the evacuation of the property in case of emergency.

  • Identifying data of the property in the property registry, or expression of not having registered in it.

  • Total price of the home and accessory services and forms of payment.

 

In order to get to know the house that we are going to acquire, it is not only necessary to visit it, but it is also essential to know what its legal situation is, that is, FIND OUT:

- To whom it belongs and therefore who or who are its owners.

- If there are charges or encumbrances on it, that is, if there are mortgages, embargoes or other charges that affect it.

- If there are tenants or owners of it.

- If it is subject to a special regime, as is the case with Official Protection housing.

- In the case of an apartment in a community of owners, if you are up to date with the payment of the community fees.

- If you are up to date with the payment of the Real Estate Tax.

- In the case of homes under construction or new, if the promoter has taken out insurance that covers damages that may occur due to structural defects in the building.

- The statutes of the community. They may contain limitations on the right to property, such as not being able to allocate a home for tourist rental, the obligation to bear certain expenses or not, being able to divide the home without authorization from the board of owners, etc. To find out about such circumstances we must go to the PROPERTY REGISTRY in which the house is registered. The registration information must be delivered before delivering any monetary amount or signing any contract.

 

" In order to get to know the house that we are going to acquire, it is not only necessary to visit it, but it is also essential to know its legal situation, finding out, among other things, to whom it belongs, the encumbrances on it, if it is subject to any special regime, if is up to date with the payment of community fees and Real Estate Tax, or if there is any prohibition to dispose of it. "

 

 

2 The Contact Sign

The signing of the purchase contract signifies the formal provision of consent, and with it, on the one hand, the delivery of the property, through the handing over of the keys, and on the other hand, the payment of the price, either by the buyer or by the bank that finances the operation through the mortgage loan. Therefore, this is the moment when we can no longer back out. That is why it is advisable to give it as much formality as possible, and to take it into account:

  • That the contract can be formalised in a private document, without the intervention of a notary and with the sole intervention of the buyer and seller. This is only possible when the purchase is not financed with a mortgage loan, as this requires in any case a public deed and registration in the Land Registry. This is why the purchase of a home is generally formalised in a public deed. However, in cases of off-plan sales, the private purchase contract is usually used to formalise the delivery of amounts on account of the price, and the obligation to build and deliver. It is important to know that, by granting a private document, either of the parties may demand that the other party proceed with its elevation to a public document, and if the other party refuses, they may request judicial intervention. It should be borne in mind that in order to register the purchase in the Land Registry, it will always be necessary to execute a public deed.
  • The general rule is that the home purchase contract is formalised in a public deed, a public document authorised by the notary, who records the will of the parties, makes a judgement on their identity and capacity, draws up the document in accordance with their wishes or according to the minutes presented by them and in accordance with the legal requirements, and warns the parties of the obligations that are incumbent on each of them as a result of the conclusion of the contract.

 

" It is important to know that, by granting a private document, either party may demand that the other party proceed to the execution of a public document and, in the event that the other party refuses to do so, may request judicial intervention "

 

The intervention of the notary will give authenticity to the content of the document, so that what the buyer, the seller and, where appropriate, the bank granting the mortgage loan declare and make before the notary, will be recorded in the deed, which will serve as proof before all of the fact that motivates its execution, and of its date, and none of the parties may deny before the other that they made the declarations that are recorded in the deed.

 

The execution of the deed is equivalent to the handing over of the property, and the amount of the price is generally handed over to the seller in the presence of the notary

The notary must identify the price in the deed, stating whether it was received before or at the time of granting the deed, the amount, as well as the means of payment.

In the event that the price has been paid prior to the granting of the deed, the notary will state the date or dates on which it was made and the means of payment used in each of them. Before authorizing the deed, the Notary will ask the Land Registry for a simple note proving the ownership and charges of the property, and immediately after signing if the parties do not say otherwise, will send to the Land Registry telematics the authorized deed, thus avoiding that, once the contract has been concluded, the purchaser could be affected by any embargo or charge of the seller who accessed the Registry after the purchase.

It is important to know that the choice of the notary corresponds in principle to whoever is going to pay his fees, and if the seller is a businessman and the contract is entered into under general contracting conditions, as occurs when buying from a developer.

Finally, we must point out that whatever the way the contract was concluded, the seller is bound by the hidden vices or defects of the home, even if he was unaware of them, and the buyer can choose between withdrawing from the contract, paying the expenses he paid, or reduce a proportional amount of the price in the opinion of experts. Specifically, the seller will respond in the event that the quality objectives in the interior habitable space set by the government in accordance with current legislation are not met.

In addition, the developer, the builder and the technical management of the building are jointly and severally liable to the buyers and to third-party buyers for damages caused by structural construction defects for a period of 10 years, for damages resulting from defects that affect habitability. of the building for a period of three years, and for damages caused by finishing defects for 1 year, being also obliged to take out the corresponding insurance.

 

 

The Payment of the Tax

Before buying, it is important to take into account that the conclusion of any sales contract entails the obligation to pay taxes, so it is convenient to quantify the amount to be paid in advance. The price that appears in the deed of sale will constitute the basis on which the amount of tax to be paid is calculated, although if said amount is less than the real value, the Treasury will draw a complementary liquidation for the difference.

The taxes to be paid will be different depending on whether it is the purchase of a first home, made directly from the developer, or the purchase of second-hand homes.

 

PURCHASE OF NEW HOUSES: The buyer must pay the seller the Value Added Tax (10%) (VAT). Said tax will be paid to the seller, to whom it will be delivered together with the sale price.

In addition, the buyer must pay the Tax on Documented Legal Acts, which will be 1.5% in the Valencian Community, on the value declared in the public deed. The payment of this tax must be self-assessed on an official form, and entered into a Public Treasury account, through one of the collaborating banking entities.

 

PURCHASE OF USED HOMES: In those cases in which we buy used homes from their owners, the tax to be paid will not be the Value Added Tax (VAT), but the Property Transfer Tax, which will be paid to the Autonomous Community where it is located. Find the purchased home, by paying the amount on an official form, and paying it into a Public Treasury account through one of the collaborating banking entities. In this case, as it is a second-hand home, you do not have to pay the Tax on Documented Legal Acts, as occurs with new-build housing.

 

THE MORTGAGE LOAN DEED: It is subject to the payment of the Tax on Documented Legal Acts, and according to Royal Decree 17/2018 it is part of the lender, that is, the bank must take charge of the payment of this tax.

 

 

Registration in the Land Registry

Once we have signed the deed of sale and/or the mortgage loan, and the taxes have been paid, there is still the last step, which consists of registering the right we have acquired in the Land Registry. Such registration is necessary for:

  • That the buyer is fully protected in the right that he has acquired, because only if he registers his right in the Land Registry:

          - It will be considered as the sole and true owner until the contrary is declared in court.

          - It will be protected against the seller's creditors.

          - It will be protected against hidden charges that may affect the home.

          - You will be able to obtain judicial protection of your right in case it is disputed by others or your possession is disturbed.

          - Once you have registered your right, no one will be able to effectively acquire any right over your property without first obtaining your consent.

 

  • That the buyer can obtain a mortgage loan with which to finance the acquisition of the house, because only if the buyer registers his property right can the bank register the mortgage that guarantees the repayment of the loan.
  • In addition, once the registration in the Property Registry has been made, it notifies the Cadastre of the change of ownership of the home, so that the next Real Estate Tax (IBI) receipt is already drawn in the name of the buyer.

 

" For all of the above, it is essential, as we have already explained, that we only buy from the person who appears in the Land Registry as the owner of the house or the plot on which it is going to be built, that we check if there is any embargo, mortgage or other charge in your registration history, and that once we have signed the deed, we proceed to the registration of our right in the Property Registry. "

 

How to manage the registration in the Land Registry?

In order for the right to property to be registered in the Property Registry, it is necessary to present the following to the registry office in whose territory the acquired dwelling is located:

1.- Authorized copy of the deed of purchase
2.- Self-assessment form for the tax resulting from the fact that the self-assessed amount has been paid.
3.- Accreditation of the communication of the transmission to the corresponding Town Hall.
4.- Last IBI receipt, in order to be able to record the cadastral reference of the house in the Registry.

In any case, it is necessary to know that once the document is presented in the Registry, the registration must be made within the following 15 business days. The Registrar will verify that the contract has been carried out with all the requirements established by law so that it is fully effective and can access the Property Registry, the buyer's property right, and if it understands that the document has a defect that prevents its registration (form defects, lack of capacity of the parties, etc.) will have to notify the presenter of the document in a reliable way.
This may rectify the defects appreciated or, in the event that they do not agree with the qualification of the Registrar, file an appeal before the General Directorate of Legal Security and Public Faith, or request a review of the qualification made by the registrar that, according to a table approved by regulation, must replace the one that qualified.

 

 

Costs Generated by the Purchase of a Home

The purchase of a home generates a series of costs for the buyer, which sometimes it is not clear why or to whom they are paid, and which significantly increase the initial outlay that has to be made to acquire the home. For this reason, a distinction should be made:

 

Who should I pay?

  • To the seller. The purchase price of the property. In the event that before the granting of the title deed we have paid an amount on account of the price, or that we have paid a deposit, its amount will have to be deducted from the amount to be paid at the time of signing the contract. It may happen that in order to guarantee that the sale will be formalised, a deposit contract has been signed, and for this we have given a monetary amount to the seller. In such a case, this amount will be deducted from the price to be paid at the signing of the deed of purchase, bearing in mind that if the buyer decides not to buy, he will lose the amount, and that if the seller is the one who backs out, he will have to return the amount of money paid up to that moment, doubled.

  • To the real estate agent. It is important to bear in mind that it is the party who has contracted their services who must pay them. Therefore, if it is the seller who has contracted the agency, as is generally the case, the agency can only demand its fees from the seller, and never from the buyer. The fees payable to the agency will only be paid if the sale is completed.

  • To the notary. The Notary Public will charge the corresponding fees according to his tariff for the authorisation of the deeds of sale and mortgage loan. The seller may choose the notary of his choice.

  • To the administrative managers. The amount of their management services if they have been contracted. It is very important that we require the presentation of the original invoices issued by the notary and the registrar, as well as the tax payment letter, so that we know how much we pay for each service. 

  • To the Land Registry. We will have to pay the amount of the fees corresponding to the extension of the registration of our right. The amount of the registration fees is set out in a tariff, which is available to the user at each land registry office. Before any payment is made, please ask for the corresponding invoices, with a breakdown of the relevant items, VAT and the identity of the person issuing the invoice. 
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