September 21st, 2015
In many cases, whether
spouse-to-spouse inheritance or passing down the family line, beneficiaries
wish quickly to sell inherited Spanish properties.
In order to complete a
Spanish property sale following the death of an owner (or co-owner), the
succession process must be completed first.
The seller or sellers
must be alive; have legal capacity demonstrated in the personal attendance at the
Notary’s on completion of the sale, or be validly represented under Power of
In many areas of Spain
(even in an active market), the process of selling a property can be fairly
There is no problem
therefore (in order to get ‘the ball rolling’), in marketing a Spanish property
for sale before completion of an inheritance case. But obviously, the legal
position must be made clear to any interested parties. Furthermore, any
contractual commitment entered into must be of a conditional nature- completion
of the sale being subject to prior completion of the inheritance.
The following is a
brief summary of the principal ‘paperwork’ and logistical items to attend to,
before putting a property on the market for sale.
Title The original Title
Deed (‘escritura’) will be needed- or if it cannot be located, then an official
copy should be obtained from the Notary’s. The Registered Title details can be
extracted from the Title Deed; and an up to date copy of the Registered Title
should be obtained from the Property Registry. In many cases, there are
discrepancies between the official Spanish property title and the position ‘on
the ground’. So, it is often necessary to get the title updated prior to a
sale. Banks (for buyers’ mortgages) and well advised buyers generally will wish
to see correct property description in the title. Discrepancies can otherwise
seriously impact on achievable value. The title rectification process can be
fairly lengthy- usually with architects’ certificates and retrospective Town
Hall approval required. So, it is always best as early as possible to be aware
of any such issues; and to ensure that they are correctly addressed.
2. Energy Performance
Certificate. In order to
market a Spanish property for sale, owners are legally required to obtain an up
to date Energy Performance Certificate. Competition in the market now for this
service means that it is generally a fairly quick and economical exercise.
3. Local Rates
Information. The rates
details for the property will be needed, together with proof that there are no
rates arrears. Reference numbers can usually be found on the receipts for rates
(IBI/ SUMA) sent out by the local Town Hall (‘Ayuntamiento’) or the paying
bank. Missing information can be obtained from the ‘Catastro’- rates department
of the Town Hall.
Permission. Such evidence as
is available from the time of acquisition of the property will be required, to
prove compliance with planning legislation; and permission for the legal
occupation of the property. For any missing documentation, official copies- or
confirmation of legal compliance- can be obtained from the planning
(‘urbanismo’) department of the Town Hall.
5. Community Details. Full details of the Community
Administrator should be available, together with a copy of the Community
statutes and (if possible) copies of the minutes of recent Community meetings.
A summary of Community charges over recent years will be needed; and also
details of any forthcoming charges, which have already been notified. The most
recent statement/ receipt of Community charges will be needed; and before
signing the sale and purchase deed (‘escritura de compraventa’) before the
Notary, a Certificate by the Community Administrator confirming that there are
no arrears of Community charges will be required.
6. Tax Issues. Capital Gains Tax liability will need to be considered; and also for
non-Spanish resident sellers, a tax retention of 3% of the sale price is made
on completion; and fairly stringent conditions apply to reclaims, even in the
event of a sale at nil gain.
7. Services Contracts. Receipts for the most recent payments of
property outgoings (principally electricity/ water; and if applicable, gas)
will be required, together with the latest contractual terms of supply- in the
absence of copies, these can be obtained from the local offices of the services
supply companies. Apportionment between seller and buyer needs to be addressed
following completion of the sale.
8. Power of Attorney. If the sellers do not anticipate being
personally present in Spain for the legal sale process, then it will be
necessary for a Power of Attorney (containing the necessary legal powers to sell
and carry out associated administrative tasks) to be signed in favour of the
appointed representative/ legal adviser. A well prepared Power of Attorney for
the inheritance case should include the relevant provisions, to save
9. NIE Certificates. NIE (Spanish fiscal) numbers will be
required for any registered owner; and up to date NIE certificates will need to
be provided to the Notary on completion. These are also required for
beneficiaries anyway, so will be available from the inheritance documentation.
10. Mortgage. If there is an outstanding mortgage on
the property, details will be required as to the arrangements / requirements of
the lender as to redemption; and also any charges which will apply. A mortgagee
representative also needs to be available at the Notary’s on completion. So,
often this dictates the timing and location of completion.
11. Bank Account. Any Spanish property seller will require
a current bank account in Spain into which the completion monies can be paid.
Usually a lawyer’s client account will have been opened for the inheritance
case and can be used for this. It is advisable to be certain in advance, as to
the charges which will be applied in crediting the completion monies to the
account; and for the onward transmission of the completion monies. Spanish bank
charges can be surprisingly high; and the manner of payment of the purchase
price; and onward transmission/ form of Foreign Exchange service used, can
significantly affect the costs.
Representative. In order to be
fully protected in any Spanish property transaction, it is essential to appoint
in writing a legal representative, who is independent- both from the other
party to the transaction; and also from the estate agent negotiating the
transaction. The appointed legal representative must be duly qualified,
registered with the applicable Colegio de Abogados (Law Society equivalent);
and up to date with their professional practice requirements. They must also
carry adequate professional indemnity insurance cover. It is also essential
that all communication is in a language which both the property owner and the
legal representative speak perfectly. There should be no risk of any
misunderstanding. Usually a specialist lawyer will have been engaged for the inheritance
case; so they are generally the logical choice for handling the legal aspects
of the sale.
13. Estate Agent
Appointment. The issue of
estate agent appointment in Spain can be something of a potential minefield;
and is worthy of an entire separate article! Suffice to say for now that it is
an area which needs to be extremely carefully handled and documented.
The above is a
non-exhaustive checklist- really just the bare minimum.
The Legal 4 Spain team
is always available to provide preliminary advice on a no-obligation basis in
relation to probate and/or a sale or purchase of a Spanish property.