What happens in Notary Office when selling

Hi,

I have just agreed to sell my property and would like help in what to expect in the Notary office.

I understand that i do not really need a lawyer as the money is just handed over to the seller.  But how is it handed over? (minus the 3% tax of course).   Do i get some form of Bankers Draft?   What are the possible pitfalls?  How can i tell if the bank draft is legitimate?

Thank you in advance for any help or advice.

 just a note...if you are not using a lawyer or gestor,who is going to do the 3% retention for you?

You will get a bankers draft with the banks name on it,falsifying a cheque is a criminal act and means prison time,i have never heard of it happening.

Ah thank you for clarifying the Bankers Draft situation.  

I thought i read somewhere that the notary automatically takes the 3% retention as part of the transaction to ensure that the Tax is paid?

We purchased last year and were given instruction by our solicitor to arrive with a Bank Cheque made payable to the seller. We also had to have the Notary fees , Tax and Solicitor fees in three separate cash amounts. Thought it a bit stange but  strange but it went through OK .

Our solicitor withheld an amount from the seller to ensure all invoices  were paid IBI Water Electric etc.

Notary checks out on the handing of a 3% check to the vendor for him to pay it into the Tax office.

Surely the 3% retention is only when the seller is a non resident or a resident who  has not been paying his taxes, for which, I assume he will be in trouble anyway?

Payment- accepting a personal cheque is not a good idea-even if cleared, in the future may be found to have come from a dodgy source, meaning the recipient is in trouble.

I know Johnx says a solicitor is not necessary when selling, but is it a good idea to have one, Maria?

Could you not meet up with the buyers, and go to the bank with them when they are getting the bankers dradt that way you will see its the real deal..

Baker's Drafts are generally consider 100% safe, that said, I did have one drawn  by National Westminster Bank in UK which bounced when I paid it into an account in Gibraltar.  I had to get it replaced.

Opps,  I must have been thinking about the wrong kind of 'dough'

If it is a simple sale with no mortgage, and no debts or leins there is absolutely no reason to use a solicitor when buying or selling a house in Spain. Ensuring it is not a new build on contested ground of course!

So why do estate agents demand you use a solicitor? Easy peasy, the solicitor will ensure that they get their cut, not the couple of % as in the UK, but thousands of euros, there is no way for them to ensure they get the money without a solicitor making it part of the deal that the notary pay them.

The seller has to have proof that all utlity bills are paid, and recently has to prove that there has been a gas safety certificate. The buyer has to have an NIE and the money plus 8% tax, plus the notary fees (usually about 80 euros)

The notary is the governments own solicitor who ensures the taxes are paid! they often reside in the twon hall or in council offices, which is handy.

When you are in his office to sign the escritura, the notario must confirm the personal details and identities of all concerned with the sales contract and he will then read the contract aloud, usually in Spanish, so you will need someone like your solicitor or a translator to be present as you must be sure the title deeds are correct. In fact, some notarios will insist that there is an English speaking lawyer or translator with you before they agree to sign the deeds. (In our village, Pruna, she doesn't give a care for that, the owner and buyer are in the room, the deeds are correct, the sums of money are pitifully small ((three bed house for 25,000 euros!)) and it is very straightforward.

He or she will have to make some legal checks, but these differ from region to region. Generally though, he should have asked for a property registry filing before the signing of the escritura to confirm that the vendor is indeed the owner of the property and that the property has no debts or tenants or other unexpected problems. 

The Spanish government set the notario’s fees and these are payable according to the declared value of the property and also the number of clauses contained in the deeds. The fees may be from 0.1 per cent to 0.4 per cent of the declared value, the lower amount for more expensive properties and the higher for those of smaller value. In addition, if you have obtained a mortgage on the property you will be required to pay the notario’s fees for the mortgage deeds.

Usually, the notario is one of the less costly aspects of property purchase in Spain and his fees for wills are around €75 if they are uncomplicated. Notarios will give you good advice on a range of matters but you should not consider him an alternative to your own lawyer.

My solicitor has quoted 500 euros , hardly thousands !

Some important questions….

• Why are notaries in some regions allowing resale of properties without legal LFO’s in place?
• Aren’t these properties unable to be recorded in the land registry as they do not have legal licences in place?
• Aren’t these properties at future risk of being unable to be legally resold, rented, or gain future mortgage provision? Are they classed as being legally owned but legally “uninhabitable”.
• How is any outstanding developer mortgage debt currently identified for properties that never had LFO’s issued and therefore were never recorded in the land registry, but have been subsequently resold?
• Is there no mandatory obligation on the part of the notary to record the sale of all properties into the land registry, thus enforcing the requirement for licences to be in place prior to any completion or resale?
• Does a developer have a legal obligation to inform the offplan purchaser (with whom they have a contract) if they hand back the property to the Bank prior to completion, and at that point will the purchaser be legally eligible for cancellation rights and return of their deposited monies?
• Would a notary be legally required to officiate this transfer of property back to the Bank and is there no mandatory obligation on the part of the notary for all such transfers to be officially recorded in any official register for subsequent viewing?

For some reason, camposol, you got a dislike for that so I liked it to balance it up. Why someone disliked the fact you've only been quoted 500 euro I've no idea, unless it was a solicitor being undercut.

We paid the same when we sold our flat, well 480 euro actually. If the buyer had used the same company it would have been shared at 240 each. Well worth the peace of mind.

I hadn't noticed the dislike!

Will the person who did it ex plain why?

Actually, I got 3 quotes, all 500-550 euros, so where do the thousands come from?

Sorry ads, but are you getting these rules mixed up a bit? I'm not questioning you but the system which, I agree, do need clarification.

I sold a flat a couple of years which, like virtually all the property in that area, never had habitation certificate due to the local town hall being useless. Many other properties in that area had been bought and sold. When we sold, the notary retained a fee (quite a high one I seem to remember) to pay for the habitation certificate when it became available.

However, the point is that it was registered at the land registry despite not having this certificate. The flat also had mains electric and water and had them for years. The utility companies did not require a habitation certificate when the new owners took over, simply changed the name on the bills. I know it was registered at the land registry because I went to Alicante in person to pay a fee to get a debt (taken out by the builders, not me) removed from the deeds to show it had no outstanding debts. And, again, the point is that it was registered at the land registry, it was connected to the utilities and it went through the notary despite not having a habitation certificate and the new owners had it recorded in the land registry as well.

I know that none of the properties in that area, despite paying all local taxes and utilities, actually have a habitation certificate but all have their deeds issued by the powers that be including the land registry where they are correctly (?) recorded.

The thousands of euros is what the estate agents charge, and the solicitor ensures this charge is taken out by the notary and paid to the estate agents. I agree the solicitor is around four or five hundred euros.

My point was that a small house with deeds in perfect order, certificates to prove there are no taxes owed, in an old house so no illegal building, dies not need a solicitor. In my village though the estate agents demand it because that is the only way they get their cut, and their cut is several thousand euros for a twenty five thousand Euro house.

Sorry if I did not make it clear. 

So many people say to me 'but you must need a solicitor because the estate agents insist on it's I was just trying to explain why.

Bobaol,

Maria recently observed

" A house with no escritura cannot be sold, mortgaged....., even rented--- if the problem is a lack of license.

Serious business

Maria"

So the concerns remain for those at risk of completing without a licence in place, in the eyes of the law....

You have observed from your own experience that at that time it was possible to record a property in the land registry without a licence in place, that the notary allowed the sale to proceed without licence in place (on the assumption that licence would be made available as they retained a fee for this process), that the utility companies made provision of water/electrics without licence in place (in other words the property was not left on developer's supply), that the deeds were made available despite there being a developer debt registered against the property (which you had to correct)....

But equally it has been reported on EOS of instances where purchasers have been left at terrible risk, in effect in legal limbo without licences in place and subjected to unpredictable provision of developer's electric supply (since the utility companies would not make provision without licence in place), of being denied legal rights to inhabit their property, of being denied legal rights to rent out their property, or gain a mortgage on the property, that town halls have been at loggerheads with regional government who retrospectively declared the build as illegal, hence no provision of licences were ultimately forthcoming, that attempts have been made to resolve the problem by suggesting they have a "stay of execution" for a number of years, denying their family inheritance rights to the property, and so it goes on!!!

There was even an instance reported of developer not paying off the mortgage debt upon purchaser completion, and even extended the developer mortgage on the property without purchaser knowledge, and to add insult to injury the Bank were demanding that the purchaser make good the developer debt when the developer subsequently could not meet their financial obligations....

So, where does this leave everyone in the eyes of the law? It appears to be a legal lottery depending on where you purchase/sell. But more importantly it appears to be a system that leaves any purchaser that does not employ a GOOD conveyancing lawyer with the requirement to have prior knowledge of these outstanding risks, and the ability to resolve them. The question then remains, how many have prior knowledge of these uncomfortable realities and how many assume that they are protected in the eyes of the law?

Perhaps Maria can clarify if I am getting these rules mixed up? Hopefully she will be able to answer the questions I posed?

I have to ask the wider question however, what sort of conveyancing system is it that even allows these compromising instances and loopholes to exist, without safeguards in place to protect and eliminate such risks via mandatory requirement to register and record property in a consistent fashion across regions with mandatory requirement for provision of all licences to be in place prior to completion or resale?

Likewise what sort of system is it that does not respect the rule of law when an existing law (Ley 57/68) that actually defines purchasers' inalienable rights, is not consistently adhered to, and does not recognise the requirement of mandatory provision of Bank guarantee to be in place (with deposited monies secured) and licence to demonstrate property is fit for purpose and meets all legal requirements prior to completion (fully in line with mutually agreed completion date as per the purchase contract).

It hardly inspires confidence when you recognise that mandatory rules are missing within a conveyancing system  that can leave purchasers at potential risk in this fashion, and that even when safeguards are defined in law in the form of inalienable rights, that this too is not consistently adhered to across regions, nor consistently respected when discriminatory retrospective time constraints are subsequently placed upon those seeking justice with major court delays and delays to judicial rulings further compromising their route to timely justice.

The problem is what do you do when you have found the Casa you want and it has no Habitation Certificate, do you refuse to buy, how many do you refuse to buy because of the lack of this HC, as far as I can see thousands don't have this HC and as we all know are bought and sold on a daily basis without any /  many problems what so ever, sure the law states otherwise but if it isn't in existence then whats the answer?

If every person declined a house sale due to the lack of HC then maybe Spain would change the law, doubtful on that though, 

All of my properties have had no HC and I bought and sold with no problems, even the two I have now, all have had no problems with supplies being turned on, all have had no debts against them, all have had taxes paid up to date and on time.

The only thing I do and never changed is use the same solicitor as always for the past many years and query and ask every question I can think of.