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El blog de Maria

Your daily Spanish Law reporter. Have it with a cafe con leche. www.costaluzlawyers.es

Legal tip 719. Deposit contract: an important matter.
01 March 2012 @ 11:39


We tend to understimate the importance of the deposit contract when buying a house: it is not unfrequent that when clients come to our practise seeking our advise for conveyancing, they have already signed the deposit contract, probably under the press of agent or seller. That is not advisable at all. 

Play your part in the negotiation (with the assistance of a good lawyer) in order to have strong protection of your rights and a smooth purchase process

 

Deposit contracts must gather, in detail, the main aspects of the agreement that has been reached, such as:

1.- Full identification of seller and buyer

2.- Enough, official and clear identification of the property (Nota simple required,click here for more information)

3.- Definition of the contract which is being signed, agreed price, method of payment (expressing if any amount is delivered as a deposit or on account of the price)

4.- Who will pay the expenses and taxes

5.- Time within the public deed needs to be signed, etc…

The more in detail and tight, the more peaceful your purchase process will be. It is also important to bear in mind that there is very recent legislation on Information requirements when selling houses in Andalucia (please see: http://www.costaluzlawyers.es/eng/?p=22 and http://www.costaluzlawyers.es/eng/?p=24 )

The return of amounts handed as a deposit will depend on the fulfilment of the conditions agreed in the deposit contract. It is very advisable to have a compensation clause that will avoid further discussions on this important matter. 

On the other hand, if it is the seller who is not complying with the agreed deadline, or decides not to sell without a justified reason or to sell the house to a third party, he will have to compensate you according to what is stated in the deposit contract.

In the case that the sale is finalised within the agreed deadline, the deposit will be considered an advanced amount on account.

It is needed to pay a lot of attention to this contract as it is as important as the sales contract itself and you can be committing yourself to conditions that will determine the purchase at a very high level. 

 

 

Playa de la Barrosa

"Playa de la Barrosa", Chiclana de la Frontera, Cadiz, Spain, by Mr Weeeee, at flickr.com



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2 Comments


Anne said:
02 March 2012 @ 13:28

Brilliant Maria.
I wonder if following this logic through, whether those who deposited their monies at the law firm when making their initial deposit should have been advised of all of these aspects and had a deposit contract drawn up at that stage? Many I suspect were told that only the purchase contract would be made available, having no prior knowledge of this requirement, so many would have been left in ignorant bliss of the implications of this potential gap in legal provision.
Where would purchasers stand with regards to this (in terms of lack of due diligence?) and for instance the subsequent lack of Title Deeds, or for that matter the Bank Guarantee?
How does this align with the claim against the Bank for failure to provide a Bank Guarantee?


Maria said:
03 March 2012 @ 21:12

Indeed Anne. When buying off plan, lawyers have to provide Bank Guarantees to their clients in order to cover every euro, from those paid as a deposit.


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