Private Purchase Contract - Resale Property

Published on 5/8/2007 in Buying Process

These are some important aspects of the private sales contract:

1) If you don’t master Spanish sufficiently, ask the owner to provide translation of the contract or look for a translator yourself and pay these services 50-50.

2) Date and place of contract.

3) Check who is signing on behalf of the selling party: (The most practical and useful thing is to ask the Land Registry for an updated “Nota Simple” of the property to check the current owners and any speciality involved in the ownership. There is an English version of this service at:

  • If the transaction is between two individual parties, the document must be signed by all the owners, themselves or through sufficient proxies.
  • If a house is part of the marital community, the document must be signed by both husband and wife; they both will have to sign too if even not being part of the marital community (being an exclusive good of one of them). So, important to have an specific mention about the civil status of buyer in the headings of the contract.
  • If the seller gives power of attorney to another person to sign the private contract, the authorised person will have to present the authorised notary copy, it means, the original document signed by the Notary, not just a photocopy, the power of attorney must grant enough power for the sale, so it is very important to check, by reading the power of attorney deed, that the authorised person can sign the sale (these mentions are among the faculties stated in the deed).
  • If the seller are the heirs of the owner, it is important to make sure that they have got all the Inheritance documents in order and they are the only heirs who hold rights on the property.

4) If the hosue was rebuilt or renewed make sure this was done with the required Work License from the Town Hall and that the “ Decalaracion de Obra Nueva” has been made before a Notary and duly registered in the Land Registry. Again, ask for a Nota Simple to do so. Catastro´s descriptive and graphic note is also needed here to see how the Land Registry description of the house is equivalent to Catastro´s and to reality.

5) If you are buying a country house, check on water, phone and electricity providers. If a well is part of the contract, be sure that it has been legalised. If there is a river passing by, be sure that you have irrigation rights properly registered in the proper Confederacion hidrografica.

6) Charges on the house:  It is very important to verify which charges exist on the house, and check out if it is free of charges, loans and encumbrances.  In order to check that out, again, the most useful instrument is a Nota Simple. The mortgage can be fully paid before the transaction and be cancelled by the owner or  the buyer will have to subrogate that mortgage, which means that he will have to accept it and become the debtor of the remaining debt against the Bank which has granted the mortgage.  It is necessary then to know on interests’ rates, recovery time, and commissions and of course the amount still owed. It will be convenient to ask in the bank as the Nota simple doesn’t reflect all these details.

7)  Community of owners´ shares. If it is a resale house, you need to have information on the situation of the house regarding payments to the Community of Owners. Ask it to the Property Manager/ Administrator or the President of the Community, get  copies of the Statutes  and  internal rules of the building too.

8) Price, deposit and payment method:  The contract will specify the price of the house and the payment method. There is no VAT to be paid on resales. You will have to pay the Transfer Tax which is of 7% of the property price.

9)  There are certain kinds of houses which have official value, the Treasurey Department of the Autonomous Community has this information, check the Nota Simple to see that your house is not VPO.

10) Public deed signing date: Very important to have a determined and clear date for signing the Public deed before a Notary,  and if extensions are agreed to clearly establish the terms of these extensions which need to be always communicated,  justified and agreed between the parties.

11)  Related expenses:  Need to be mentioned  and how-who will pay them:  

  • Plusvalía (a tax over the value rise of the property from one to the next transmisión)
  • Notary Deed.
  • Registration in Land Registry.
  • Transfer taxes

If nothing is specifically mentioned or if it is agreed that expenses will be paid “according to Law” , the seller will pay Plusvalía, and most of the Notary Deed and the buyer will pay the copies of the Notary deeds, the registration of the Property in the Land Registry and the transfer tax.
Never agree, as a buyer,  about  paying the Plusvalía. 

12)  Chooing a Notary: The buyer has a right to free election of Notary.

13)  The private contrat is sufficient to link the two parties  to what is agreed in the contract clauses but it is not sufficient in order to register the property in the Land Registry or to ask for a mortgage. You need a  Notary public deed for these two.
I will write on Notary deeds in a future article.

14)  Cancellation clauses and penalties for delay (equilibrium) The contract needs to mention equivalent penalty clauses for delays (to both parties) which need to be agreed by the contracting parties and not imposed by any of them. It also needs to put the parties in balanced conditions in the event of cancellation of the contract and establish equivalent compensation for these cases of cancellation.

15) Agreement on juristiction  or  submission to arbitration.


Written by: Maria de Castro

About the author:

Maria de Castro is a Spanish Lawyer and the Director of the Law Firm

Costa Luz Lawyers are contract and consumer real estate law specialists covering all parts of Spain. You can contact Maria at

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kenco said:
Saturday, July 14, 2007 @ 5:33 PM

a very worthwhile document which clarifies what to many can be a buyers nightmare. thank you for your help

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