Undeclared land

Hi, we are in the process of  buying a property in spain.  We have recently found out that the catastro shows 265sqm and the title deeds  show 72sqm. 

Our solicitor says that we can register the original property and the new building work, on the same day by having 2 title deeds. She says that we have a valuation from bank and also have an architect draw up details and everything will be fine as the building work was done more than 4 years ago.

Is what she is saying right?  We do trust her and we have given her power of attourney but it would be nice to know that this happens a lot and we are going the right way about it.

There is no paperwork regarding the building work.

Any information you give will be much appreciated.

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Hello,

What she is telling you is correct. It happens sometimes that previous owners did not want or could not be bother applying for the buiding permission for the new constructions.

A deed reflecting and declaring the new situation can be done, and if the architect to issue the certificate declares that the construction is more than 4 years old there should not be any problems (the only difficult situations arise if a construction is against the local urban plans).

This deed and its registration has obviously an additional cost.

I hope this information can be useful for you. 

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I am a bit confused you say there is no paperwork for the building work which indicates it is not registered but there is a bank valuation so presumably this has been brought to her attention by the valuation. Do you mean that the valuation figure given is reflective of the value after registration of the whole property? In theory if the construction work is more than 4 years old it can be registered on payment of a fine but this assumes everything is acceptable to the Land Registry and the Town Hall. Ensure that she confirms with the authorities first that everything can be legally registered before agreeing to completion. It is advisable to confirm the level of fines incurred and to decide whose responsibility they will be in advance.

Rgds 

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Hi Smiley and Spanish Inquisition, There is no paperwork as we have not had valuation yet, she is saying the next step is valuation from bank and to get an architect to draw plans so we can register the building. 

A fine has not been mentioned at all, is this normally the case? We have asked if there is any unpaid bills/taxes because of this underdeclared building and she said no.

The area we are buying in is Alhama de Granada.

If this is going to be difficult and costly we may walk away.  We are already paying more than originally agreed because the vendors increased the price  3000E due to inheritance taxes, they incurred.  To be honest we can't afford any more.

We have said to the solicitor that we may ask for a reduction in the price because of registering the building and cost of plans from architect but she said it is normally the buyers responsibility, is this so?

Thanks for your help, any advice is much appreciated.

 

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Hello,

 

Let's see. Everything is subject to the agreement of tthe parties. But usually if a property is in such a legal situation (the heirs still have to accept the will and pay IHT, and they also have a different registered area) then,  they usually reduce the price to let the new purchaser sort the situation out (except the inheritance thing, since they have to be the legal owners according to the Land Registry to be able to sell).

Otherwise, the correct thing to do would be to include everything in the price (knowuing the cost that the vendors will incur) and sell the property fully registered and with the inheritance situation sorted (as I said this is a prerequisite that can be done at the same time, but obviously the sellers need to be the ones reflected in the Land Registry). 

If the construction is more than 4 years old and is not against the urban plan, then an architecct will be able to issue a certificate for that construction to be included in a notary deed for new construction, that will have to give a value on the construction, pay the stamp duty on that, and tthen take the deed to the Reggistry so the construction can be added in the Land Registry information of the property. 

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Hi,

Thanks for the information you have given me so far, it has been really helpful.  I have some more queries and I would be grateful if you could give me some advice please.

We are having survey done this week and the architect is drawing up plans to have new building properly registered.

My solicitor proposes that we register 35000E at the notary for the 1st set of deeds and 55000E for the new building deeds at the notary on at the same time, is this correct?  When I asked if this 55000E will  also be shown as going to the vendor she said no it is for the new building and it is the legal way to do it.

I am concerned about doing it like this, we are having a mortgage on the property, do you think the bank will make sure that all the details at the notary are ok?  As I said before we have given our solicitor power of attourney so we will not be present at the notary.

Does an architect only issue the certifate once everything has been authorised with the town hall?  Also, is the 1% tax on new build instead of planning permission charge?  We don't want to end up with any more bills for the new build.

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