Spain is experiencing a strong growth in demand by foreign investors in the real estate sector. The lowering of prices during 2013 has made investment more attractive and has created a larger number of investors.
To this end, it is beneficial for the foreign investor to become familiar with the procedure involved in the purchasing of real estate in Spain. In this Article, we will focus on the notary figure because of the critical role he or she plays in the foreign investor’s purchasing experience. We will also refer to the intervention of the lawyer during the foreign investor’s purchasing real estate in Spain.
The Notary’s Role
NOTE: this article does not aim to reflect in a comprehensive manner all the roles that a notary can adopt.
- According to the Spanish Legal System, only public documents, among which we can find notary deeds, can have access to the Land Registry. This access to the Registry grants legal protection to the owner of the property against third parties, and this is why it is so advisable to register them. The usual occurrence for the purchase title of property is that it is a public deed.
- Moreover, the notary validates the identities and legal capacities of the involved parties, which is another guarantee and legal protection that the Spanish Legal System offers.
- It is important to keep in mind that there exist some legal acts, such as a mortgage, that require registration for validity. This means that the signing of a public deed for a mortgage must occur before a notary to register and validate the mortgage in the Land Registry.
- On the other hand, the Spanish Legal System has a special communication procedure established between the notary and the Land Registry by which the latter must inform the notary about any deed relating to the property that a buyer will purchase. To protect a buyer effectively, any deed relating to the property is presented before the signing of the corresponding public deed of purchase.
The Lawyer’s Role
In any case, the vast majority of real estate transactions in Spain involve private documents, and the notary does not take part in this process.
The lawyer is also responsible for initially reviewing the status of ownership of the property, the encumbrances attached to it, and the licenses associated with it (among other questions). In this role, the lawyer usually serves as a negotiator and intermediary during the purchasing procedure, and he or she may represent the client in the signing of the public deed so that the client does not have to go to a notary. Normally, a real estate lawyer also takes on other roles such as coordinating the preparation of the public deed and its revision and providing tax advice during the purchasing process.
The notary and the lawyer both have important roles to play to carry out the real estate purchasing procedure in the best possible conditions. Indeed, they are different, but they complement each other throughout the real estate purchasing process.
This article is not considered as legal advice