Almost everyone is now aware of Spain's reputation as somewhere that is hazardous in which to buy property. Indeed, virtually every week a headline appears in the international press highlighting yet another scandal concerning Spanish property. Again and again, stories describe the plight of people who have bought property in Spain only to find, to their horror, that their properties have potentially ruinous problems. Some of these properties are not fully legal or subject to considerable liabilities, whilst others risk the compulsory loss of part of their land or, worst of all - a possible demolition order. It is enough to make anyone thinking of moving to Spain change their mind.
So, is it really dangerous to buy property in Spain?
Well, the honest answer to this question is a qualified - no. No, if you know what you are doing and no - if you are exceptionally careful and know the 'rules of the game'.
The trouble is that most people who buy property in Spain do so carelessly whilst naively imagining that the Spanish property industry operates much the same way as in the UK. It does not. Not at all! In fact, understanding this point, in its most raw and brutal form, is essential if you are to buy a property in Spain that is a safe and sound buy - both from the point of view of legality and investment.
Of course, if you are moving to Spain permanently and intend buying a property in Spain then the stakes could not be higher. Indeed, if you make an error it may be one that will cost you your life savings, turn a dream into a nightmare and risk everything that you have worked hard for over many long years. All of which is unnecessary - if you have the right knowledge.
After seven years in Spain (including working extensively within real estate), I think I have seen, one way or another, most of the problems and scams relating to Spanish property. Unfortunately, half the property problems in Spain are caused by the very nature of the Spanish property industry and half by property buyers themselves - who are frequently taken advantage of and act like 'lambs to the slaughter'.
Of course, there are guidelines to buying Spanish property safely. Some of the most important are:
1. Know the difference between 'Urbanizado', 'Fully Urbanizado' and 'Rural'. To understand these absolutely critical Spanish property terms is not 'rocket science' - but is so fundamental that you should not even be looking at property in Spain before you know what they mean and their very serious and differing implications.
2. Every Spanish property should have a Licencia de Primera Ocupación or First Occupancy Permit (sometimes known as a 'Certificado de Habitacion' or 'Cedula'). If it does not have one - do not buy it.
3. Only buy a property that is easily re-saleable - so be prepared to compromise on what you want if it means buying a re-saleable property. Obviously(!), know (objectively) what is or is not re-saleable. Guidelines are available and they are very important...
4. Never confuse a 'bargain' price with a sound buy. The two are not necessarily the same thing! This is as true of a property crash as it is of a boom.
5. Never accept the very existence of a property in Spain as evidence of its legality - even if it has been around for a long time. The property may still be illegal, semi-legal or have huge potential liabilities.
6. Be extremely wary of buying any Spanish property that is situated within less than at least 100 metres of the highest point that could be reached by the sea in a major storm.
7. Always use a Spanish lawyer for your conveyancing who:
a. Is completely independent of the seller and any estate agent.
b. A specialist in conveyancing.
c. Completely fluent in your language.
d. Fully and properly insured.
e. Is prepared (and does!!) place all advice in writing to you.
8. Always use a properly qualified, fully insured, experienced building surveyor to survey your property - even if this means using an ex-pat surveyor. (Good Spanish surveyors specialising in house survey work are very hard to find).
9. Never pay any 'black' money for a Spanish property - i.e. cash that is not shown on the Escritura (deeds) as part of the total property purchase price.
10. Never be pressured, never rush and always double check what you are told - and obtain written proof if you have the slightest doubt about the truth of some matter.
Follow the above and you will be well on your way to buying a sound property in Spain. Break the 'rules' and act without the right knowledge and you will almost certainly regret it!
Finally, I must stress that you can move to Spain and buy property in Spain safely. We did - and our property has been a sound choice on all levels. Even now, in the midst of a massive property crash, it is easily re-saleable and has preserved the essence of its value. But then we knew what we were doing and that moving to Spain to buy a property was an undertaking requiring serious preparation and planning - if it was not to end in disaster...