Is a Spanish notary necessary ?
If you are going to carry out an important transaction in Spain, it is recommended that you do it in front of a notary. The notary is one of the important figures in Spanish culture. Notaries continue to enjoy a prominent position in Spanish society not to mention a privileged income flow guaranteed by law.
Essentially, notaries are public officials who play a neutral role in drafting and witnessing all types of important business deal in Spain. Their job is to ensure that both parties within an
agreement understand the terms of the contract, they make sure that the terms of the contract do not contravene any Spanish laws, and ensure that the appropriate taxes generated by the
transaction are paid.
Is it necessary to have your deeds witnessed by a notary?
When you buy a property in the UK you exchange contracts, pay the vendor, get the keys and the property is yours, after which you are free to register your title in the land register. The big difference in Spain is that you can’t inscribe your title in the "registro de la Propiedad" property register unless a Spanish notary witnesses the deeds of sale. Under Spanish law a notary’s signature is required to present the private contract in the land register, so to make it clear "no notary signature.... no inscription in the property registers".
Next question we may ask ourselves is: is inscription of the deeds in the land register really necessary? In theory no, no one will force you to do so as a private contract between buyer and seller is fully binding on both parties. In fact some Spaniards, especially in rural areas, own property that is not inscribed in the register, thus saving on the hassle and expense of notary fees, registry fees and taxes of inscription etc. Strangely there is much more property inscribed in the property register than exists in all of Spain, the reason for that is that nobody declares any building that has collapse or have turn into a ruin.
For Expat buyers, however, it is crucial to inscribe their title in the property register, as it is the only truly secure form of property ownership in Spain. The first person to inscribe title to a property gets to keep it independent of any other private contract that may be around, which is a good reason for you to do so. There are other advantages too, for instance protection from the vendor’s creditors and the ability to take out a mortgage against your property. So all buyers need to complete their purchase in the presence of a notary if they are to enjoy the security of inscription in the property register.
Sign now or later?
It depends upon whether you are buying a resale property that already exists, or a new property from a developer that is under construction or off-plan.
When buying a resale property you can sign the deeds before notary at the first convenient time for you and the vendor. This should be between 1 and 3 months after signing a private contract. Be careful when buying resale properties from foreign vendors as there may be is a risk that they will take your deposit and leave the country, after which the mortgage lender will sell the property to pay off the mortgage and you may be left with nothing. When the vendor is a foreigner with a mortgage you should avoid private contracts and sign the public deeds before notary as soon as possible.
When buying a newly built property from a developer you can sign the escritura and make the final payment once the property has been certified as duly completed by the architect. Unless you have agreed to sign deeds for a property under construction, you are not obliged to sign the escritura until the developer can produce the final certificate "certificado de final de obras" signed by the architect to be able to obtain the "Licencia de Primera Ocupación" First Occupation Certificate" from the local Town Hall. (See other article about in this web about the importance of the First Occupation Certificate.
Preparing for signing.
One important piece of advice; you should only sign the deeds once your lawyer has carried out all the legal checks, on the vendor’s title, debts and architects certificate, etc.
You also need to agree a payment method with the vendor before you turn up at the notary. Bank-guaranteed cheques issued by a branch in Spain are the preferred method, though it should also be possible to transfer funds to the notary’s escrow account. Banker’s draughts from banks outside of Spain are likely to be rejected. To avoid a crisis in the notary’s office just make sure the vendor is aware of your proposed payment method, an only then get all your funds in place.
Also make sure you have the necessary documents with you when you go to the signing. In most cases you only need your passport although the NIE is requested by most notaries now days, you should always have your lawyer clarify what the notary requires before you attend.
Though it is always best to attend the signing in person you can also have someone sign on your behalf by granting them a power of attorney. The easiest way to grant power of attorney is to sign one before a notary in Spain, though at greater expense one can also be arranged through the Spanish consulates in the UK or through a British notary public and Hague Apostille. Everyone involved in the transaction all the vendors, buyers, and mortgage lenders have to be present in person or represented by powers of attorney at the signing of the deeds.
What is the protocol at the notary's office?
Upon arrival you are shown into an office with all the parties involved to wait for the Notary. You may pass an uncomfortable half hour or more while the staffs prepare de deeds with the vendor, who you may also be meeting for the first time. The Notary who always emanates importance will then breeze into the office, take a seat at the head of the table and start the proceedings.
The notary will confirm the identity and other personal details of all the buyers and sellers present, and then read the deeds out loud. Some notary’s like to show off their English by giving a partial translation, though most will just read them out in Spanish. Whatever the case you need to be sure the deeds are correct before you sign them, which means having a translator present or relying on your lawyer. Some notaries will refuse to sign the deeds unless a foreign buyer has a lawyer or translator present.
The notary will also make certain legal checks, though these vary by autonomous region. As a minimum they should have request a property registry filing just before the signing to confirm the vendor’s title, and that the property is free of any (unexpected) encumbrances. This leads some estate agents to claim that buyers are perfectly well protected by the Notary and don’t need a lawyer. This is not so. In reality the Notary gives you little protection so you must be accompanied by an experienced and qualified professional when signing the deeds.
If nobody objects to the content of the deeds the notary will pass them around for signing by all parties, and confirm the payment of any outstanding amounts by the buyer before the keys are handed over. This is when you produce payments such as bank drafts for any outstanding amounts on the declared price (the price stated in the deeds less any deposits or down payments already paid). But now comes a very important point of etiquette: if you have agreed to pay a part of the price under the table, which you are strongly advised not to do, then never produce this cash in the presence of the Notary. Always wait until the deeds have been signed and the Notary has left the room before you bring out the envelope stuffed with cash. The vendor will then count out the cash in front of you.
After signing the deeds
After signing the deeds the property is all yours, though the taxes still need to be paid and your title inscribed in the property register.
You will be given a copy"copia simple" of the deeds to take away after the signing. Each copy costs around 30 Euros so you should decide how many copies you want in advance. You can use the copia simple to do most things, such as set up utility contracts and pay taxes. A few days later your lawyer will be able to collect the original deeds signed by the notary (copia autorizada), which are needed to inscribe your title in the property register. In the meantime the notary should have faxed notification of your purchase to the property registry immediately after the sale, thus blocking the register for 10 days and preventing anyone else from inscribing a claim to the same property during this period.
Notary fees are set by the government according to the number of clauses in the deeds and the declared value of the property. As an approximate guide they range from 0.1% of the declared price of a property (for properties of 400,000 Euros or more) to around 0.4% (for properties of under 100,000 Euros). If you use a mortgage then you will have to pay Notary fees on the mortgage deeds as well.